From Car Loan Wiki

Credit insurance is the insurance policy that covers a specific type of credit, like a car loan. With credit insurance, should the borrower die, the insurance company pays off the remaining balance of the loan and the vehicle will be handed down, free of charge, to the heir of the borrowers estate. In the event the borrower dies and does not have credit insurance, the vehicle is repossessed but the heir of the borrowers estate is not liable for anything.