How to get your car insurance back when selling your car

How to get money back for compulsory motor liability insurance when selling a car

Many drivers are not aware that by selling a car, they can get back part of the money for insurance under compulsory motor liability insurance. There are also those who neglect the procedure, fearing paperwork. Autocode will tell you how to get your insurance back when selling a car without wasting a lot of time.

When can you terminate your relationship with an insurance company early?

According to the rules of compulsory motor liability insurance, the policyholder has the right to terminate the contract with the insurance company in the following situations:

• The car was in a serious accident and cannot be repaired;

• The owner of the vehicle is no longer alive (the heir receives the money for unused compulsory motor liability insurance);

• The company where the owner of the car is insured has had its license revoked (we recommend contacting the Russian Union of Auto Insurers (RUA);

Let's consider the last point in more detail, since the return of insurance when selling a car is the most common reason why a compulsory insurance contract is terminated early.

Please note that you can sell your car profitably using the Autocode service. In a couple of minutes, the service will tell you everything about the car: mileage, traffic police restrictions, fines, deposits, technical inspections, insurance and much more. A car checked in this way will inspire more confidence in a potential buyer. And the visit of a specialist will convince you of the seller’s honesty and the serviceability of the car.

Refund of the amount for compulsory motor liability insurance when selling a car

If OSAGO is not used, the money will be refunded to you. But only if the new owner is registered with the traffic police. Cases where vehicles are sold under a general power of attorney have nothing to do with them.

So, to terminate the MTPL agreement when registering the sale of a car, you will need:

• Passport of the owner for whom the insurance is issued;
• OSAGO policy;
• A copy of the car purchase and sale agreement;
• Account (debit card) details for transferring money.

With this list, go to the insurance office where you issued the policy.

How much money will be charged?

Termination of compulsory motor liability insurance when selling a car is a simple procedure, but it has some nuances. Thus, the calculation of unused days under insurance is made not from the date noted in the policy, but from the day when the policyholder wrote an application for early termination of the compulsory motor liability insurance policy. That is why we do not recommend delaying this procedure.

After a visit to the insurance company within 14 days, the company will credit you with 77% of the amount calculated in proportion to the unused days under insurance. Sometimes money is given in cash immediately after application.

As you can see, it’s easy to calculate the amount due yourself.

Why is 77% of the amount charged?

In 2014, the Central Bank established guidelines according to which insurers withhold 23% of the amount remaining until the end of the compulsory motor liability insurance contract. Ten percent of this amount is the agent's commission. Another 10% goes to the needs of the insurance company: opening offices, purchasing policies, paying employees, and the remaining 3% goes to contributions to the RSA.

Some car owners consider these deductions illegal and go to court. There were times when he took their side. Also, in 2016, insurance when selling a car became the reason for contacting the Prosecutor General’s Office. Social activist Viktor Travin asked to check the legality of the initiative. But the supervisory agency sided with the Central Bank.

If the insurance company refuses to terminate

Sometimes insurers refuse to terminate the contract until the owner shows them the title with the new owner of the car, or they require some other documents. Please be aware that this is illegal.

Maxim Sedov, Insurance Disputes Agency:

“The first thing that needs to be done when disputes arise with the insurance company is to put them in writing. Write your demands to the insurer; your copy must be marked with a date, signature with a transcript and the position of the person who accepted the document. The form is arbitrary: “Due to the fact that I, Ivan Ivanovich Ivanov, sold a car that belongs to me on March 06, 2018, I ask that the compulsory MTPL insurance contract (policy SSS No.) be terminated from the date of sale of the car and return the unused part of the insurance premium. I am attaching the details for enrollment."

Attach a copy of the DCP to the application, include the date, signature and current address for correspondence. Practice shows that just one such action sobers up insurers. If this measure does not help, file a complaint with the Central Bank, which supervises insurance companies, as well as with the regional branch of the RSA. Send there your complaint in any form and a copy of the application submitted to the insurance company.

A favorite trick of insurers is refusal to accept documents. This is not a problem, because the application can be sent by mail. To reduce mailing time, hand in the letter to the branch where the insurance company is located. It is better to send documents by a valuable letter with a detailed list of the attachments.”

How to get money back for an unused OSAGO policy

A previously issued OSAGO policy may, under certain conditions, become unnecessary for the owner. It is possible to return the remainder of the fee for the unused insurance period, but not all drivers are aware of this.

The article will describe in detail the conditions and procedure for returning money for compulsory motor liability insurance.

Conditions under which you can return money for unused MTPL insurance

All information about the conditions for refunding money for insurance is specified in the “Regulations on the Rules...” No. 431-P dated 09.19.2014. It also states that compensation is provided only for the unexpired term of the compulsory insurance contract or seasonal use of the vehicle.

Is it possible to get money back for selling a car?

The money can be returned, since the sale of the car is included in the list of conditions suitable for the owner to receive a refund.

In this case, in order to receive a refund for unused insurance, in addition to the main documents, you will also need to provide a car purchase and sale agreement and a copy of the title to the insurance company to confirm the change of owner.

When selling a car, it is not necessary to terminate the MTPL agreement and demand a refund from the company. You can simply sell the car along with the existing insurance and, in order not to remain in the red, include the amount of unused insurance in the price of the vehicle.

Is it possible to return the money just because you won’t use the car?

If a citizen simply does not want to use the car for some time, then, according to the law, this is not a reason to return the money paid for compulsory motor liability insurance. After all, it is almost impossible to prove that the car was really idle during a specific period of time.

All other cases

There are several other conditions regarding refunds:

• loss of a car: theft, large-scale irreparable damage, disposal;
• death of the policyholder, in connection with which the insurer company is obliged to terminate the contract;
• death of the owner of the vehicle, entailing a change of owner, as in the case of sale;
• liquidation of a legal entity that is the owner of the insured vehicle;
• The insurance company lost its license, so the rest of the money must be returned.

If an insurer loses its license due to impending bankruptcy, you should hurry, otherwise you may not get your money back at all.

When the money is not returned: reasons

It also happens that the car owner cannot get his money back for the remaining insurance period upon termination of the contract.

The policyholder will not receive money if:

• the contract is terminated at the initiative of the insurer due to incorrect data provided by the vehicle owner himself when completing the paperwork or incomplete payment for compulsory motor liability insurance;
• the car was transferred to another person by proxy, since in fact it was sold, but according to the law the owner remained the same;
• the owner terminates the contractual relationship with the insurer only because he does not plan to use the vehicle for some time;
• his driver's license was revoked;
• the insurer is declared bankrupt;
• 2 months have passed since the sale of the car, which means it is too late to submit documents for termination of the contract and refund;
• The insurance company may refuse to return funds due to previously paid indemnities, but this is unlawful, and such a decision must be challenged in court.

Step-by-step algorithm for terminating a contract

To terminate the MTPL agreement, you must adhere to the following procedure:

1. Contact the insurance company with which you have a contractual relationship.
2. Write a statement of desire to terminate the contract. It is written in free form, but you can also use a sample from the company’s stand. Be sure to indicate the bank details where the insurance company can return the money.
3. Provide along with the application the following package of papers: the original insurance policy, a receipt for payment of the insurance premium, a purchase and sale agreement, pages of the owner’s passport, documents confirming the need to terminate the contract (on the liquidation of a legal entity - the owner of the vehicle, the death of the insured, etc. ).
4. Wait for the insurance company's decision within 10 days.
5. If the answer is yes, then take a certificate of the terminated MTPL policy for future insurance.
6. In case of refusal to terminate the MTPL agreement and the corresponding payments, you can contact the judicial authorities or the Union of Auto Insurers.

You must provide original documents along with their copies.

Termination of contractual relations is regulated by Federal Law No. 40 “On Compulsory Insurance” and Regulation No. 431-P.

In what case is it possible to get a full refund?

Initially, when purchasing an MTPL policy, the car owner pays its full cost. Moreover, when the question arises of terminating the contract and returning the amount remaining for unused months, the insurance company takes 23%.

Is it possible to take away this 23% from the insurance company and thus receive a full refund?

Until 2014, it was possible through the court to regain 23% retained by the insurer. Car owners won the case without any problems and received their money. This court decision was based on the fact that this contradicts the rules of OSAGO, the Federal Law “On OSAGO”, as well as the Civil Code of the Russian Federation.

Since 2014, the rules of OSAGO and the Federal Law “On OSAGO” have stipulated that only 77% of the amount is refundable. At the same time, a record was left in the Civil Code stating that the entire amount is due for payment. But during legal proceedings in this matter, preference is given to the Federal Law “On Compulsory Motor Liability Insurance”, so recently, even through the court, it will not be possible to take away the remaining 23% from the insurance company.

In what case will the funds be partially returned? How is the payment amount calculated and what does it depend on?

According to clause 1.16 of the Rules of Compulsory Insurance and Art. 958 of the Civil Code of the Russian Federation, the owner has the right to return the unused portion of the policy amount. To do this, you just need to provide the company with documentation confirming the legal reason: a purchase and sale agreement, a death certificate of the policyholder, papers on the liquidation of a legal entity, loss of a car.

Formula for calculating the return of insurance premiums under compulsory motor liability insurance

The final amount that the policyholder can receive back depends on:

• number of remaining months;
• the initial cost of the insurance policy.

To determine specifically how many unspent months are left, you should clearly define the date of termination of the contract, which may coincide with the date of death of the owner, the date of theft, or deprivation of the license.

The calculation formula is as follows:

SV = (PSP - 23%) x (n/12), where:

• SV - refund amount;
• PSP - the total cost of the policy;
• n is the number of months remaining until the end of the insurance period.

• 3% are transferred to RSA;
• 20% goes to pay various expenses for conducting the process of termination of the contract.

Calculation example

Let's say the vehicle was insured in December and sold in mid-June, and the original policy cost RUB 4,200.

The calculation based on this data will look like this:

CB = (4200-23%) x (5/12) = 3234 x 0.42 = 1358.

The total refund amount will be 1,358 rubles.

Within what time period after termination of the contract must the money be returned? Where are they being returned?

According to the rules of MTPL insurance, a refund must be made no later than 14 days from the date of filing the application.

Sometimes money is returned through the cash desk in cash almost immediately after the application.

When transferring to the bank account indicated in the application, you will have to wait, but not longer than the specified time.

What to do if money is not transferred on time

If more than 14 days have passed and the money has still not been paid, you need to do the following:

1. Contact the insurance company and find out the reason.
2. If they claim that they have transferred everything, then you need to take the transfer number and go to the bank, where they can easily check the availability of money.
3. If the insurer violates the terms, transferred the wrong amount or refuses compensation altogether, it is worth going to the company management and the RSA, providing a copy of the policy and a statement of termination.
4. If the issue is not resolved, go to court.

For each day of delay, a 1% penalty is added to the refund amount.

Conclusion

Every car owner who demands a refund for unused insurance has every right to receive it, even if there have been insurance payments in the past period. If the insurance company prevents this, you should not retreat immediately, you need to resolve the issue to the end.

Grounds for refunding money for compulsory motor third party insurance (MTPL) insurance and the time frame within which the funds can be returned

The validity period of a standard compulsory vehicle insurance contract is 1 year. Of course, if this is temporary insurance, the validity period is reduced, but cannot be less than 3 months.

Sometimes the situation develops in such a way that the policyholder has to terminate the insurance contract before the policy expires. To close an insurance transaction, an appropriate procedure is provided for. In this case, such a concept as the return of compulsory motor liability insurance arises.

Dear readers! Our articles talk about typical ways to resolve legal issues, but each case is unique.

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What is it about?

The legislation does not limit the right of the vehicle owner to terminate the MTPL agreement before the expiration of the coverage period . The policyholder has the right to do this even without explaining the reasons. Unfortunately, not every driver knows that under certain circumstances, in the event of termination of the policy, he may qualify for the return of part of the insurance funds that remained unused.

The procedure for canceling the agreement is carried out in accordance with Bank of Russia Regulation No. 431-P dated September 19, 2014. The right to terminate the current policy belongs to the policyholder who owns the vehicle, the policyholder who has a power of attorney to accept the owner's return amount, and the owner of the car. The owner's heirs also have the right to receive a refund under compulsory motor liability insurance.

Is it possible to return insurance and get money back?

It is possible to return funds for the unused insurance period. To do this, you need to go to the office of the insurance organization, having with you the appropriate package of documents. They must contain confirmation that the reasons for termination were sufficiently significant. The list of documents provided will differ depending on the reason for canceling the insurance contract.

If the reason was the death of the owner of the vehicle, the list of documents will include:

• original policy;
• a receipt confirming payment;
• death certificate of the insurance holder;
• confirmation that the right of inheritance has come into force.

• passport;
• insurance;
• contract of sale;
• payment recipient's current account number.

In other cases, the list of documents will be different. If the reason for canceling the insurance is justified, you can expect a refund . If the contract is terminated without any explanation, you should not hope for the return of part of the insurance premium.

To return the policy and money, the client writes a return application. It states:

1. Name of the insurance organization.
2. Full name of the policyholder.
3. Details of the MTPL agreement.
4. Reason for early termination.
5. A method of accepting part of an insurance premium from an insurer.
6. List of documents.

The date of acceptance of the application is the date of termination of the contract . After the policy termination procedure has been completed, the insurer is obliged to issue the client a certificate containing complete information about insured events, payments, the vehicle and its owner.

Then a refund is made for the remaining non-insurance period.

Cases and reasons

Valid reasons for returning part of the invested funds are:

• Change of vehicle owner. The money is returned if there is a purchase and sale agreement. If the owner changes by proxy, the opportunity to receive a refund is lost.
• Total loss or theft of a vehicle. Such grounds are classified as causes that cannot be eliminated. When the vehicle is disposed of, the funds are returned.
• Death of the owner or policyholder. In such situations, a change of owner is expected, which means the contract will lose force.
• Liquidation of a legal entity. If the vehicle was owned by a company that has ceased to exist, the main participant in the transaction disappears. The contract becomes invalid.
• Insurer bankruptcy. In such situations, it is necessary to have time to formalize the termination and receive a refund before the bankruptcy procedure begins, otherwise there simply will not be enough funds for compensation.

As mentioned above, a refund is not possible if the contract is terminated at the initiative of the insurer in the event of false information provided by the client . Money is also not refundable if the policyholder terminates the policy due to long-term departure during which the vehicle will not be used. Of course, you can ask for a refund, but almost no one receives a positive response.

How much will they return?

1. They return part of the premium, which is intended for insurance compensation.
2. They return an amount proportional to the unused period of MTPL coverage.

77% of the total cost of insurance is intended for organizing compensation payments. The remainder, namely 23%, goes to other purposes and is not refundable.

To calculate the amount proportional to the remaining time under the policy, it is determined with the date of termination of the contract. It could be:

• date of death of the person presenting the contract;
• date of theft or destruction of the vehicle;
• if there is a change of owner - the date of submission of the application to the insurer;
• if the company is deprived of its license - the date the insurance organization received the application.

When returning funds for compulsory motor liability insurance when selling a vehicle, the amount of the return depends on how quickly after the purchase and sale transaction the previous owner contacted the insurer . The best option is to carry out the termination procedure on the day of sale of the vehicle.

Then they calculate how many days are left until the expiration of the policy. If, when concluding a standard annual contract, the policyholder did not use 100 days, he will receive 100/365 = 27.3% of the invested funds. But since it is necessary to deduct another 23% for additional expenses, the calculation results in 0.273 * 0.77 = 0.21, which means 21% of the insurance price.

If the contract was concluded not for a whole year, but for a certain period, then this is taken into account in the calculation. In the case when the policy was purchased for 4 months and the same 100 days were not used, the refund amount is calculated as follows: 100/(31+31+30+31) = 81.3%. But after deducting 23%, the balance will be 62.6% of the full contract price.

The policyholder can also calculate the amount due using the formula:

• B – return amount;
• PS – insurance price;
• n – the number of months remaining until the end of the policy period.

According to the MTPL Rules, the client must return the funds invested in the purchase of insurance:

1. on the date of termination of the policy, if settlement is made in cash;
2. before the expiration of two weeks from the date of submission of the application, if non-cash payment is intended.

Companies themselves choose how it is convenient for them to issue the required balance of funds. If the return is delayed, the client must write a letter of claim to the insurance company. If the insurer does not respond, the client has the right to use the services of the court.

Persons selling their cars should remember that the amount to be returned is calculated from the day the application is written, and not the date of conclusion of the purchase and sale agreement. Therefore, such policyholders should not delay contacting the insurer, otherwise they risk losing part of the money they are entitled to.

Company insurance agents often face some difficulties when canceling insurance. These difficulties relate to delays in the transfer of funds. Such situations arise not only through the fault of insurers; sometimes policyholders themselves make mistakes in writing their current account number and it turns out that the money goes to a completely different person.

Delays in collecting documents also affect receipt of payment. And drawing up an application requires increased care; any mistake can significantly increase the time it takes to receive the refund amount. When submitting an application, the client should make a copy of it for himself, in case of unforeseen circumstances.

If the insurer assures that the money was transferred, but it never arrived in the account, you need to find out the payment order number and go to the bank. Using the bank number it is easy to check whether the transfer has been received into the account. It happens that money gets stuck in the bank, and it is not the fault of the insurance company.

Returning OSAGO is a simple procedure that allows motorists to receive money from the total amount spent on the purchase of the policy. This can become a problem when the insurance company does not consider the reason for termination to be valid.

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Is it possible to get money back for MTPL insurance when selling a car and how to do it? General points and nuances

Having an MTPL insurance policy is a mandatory condition for operating a vehicle. It often happens that a car owner decides to sell his car before the policy expires.

What to do if you have already sold the car, but the insurance remains, and how to return the remaining money under the insurance policy, regular and electronic? This article will help you figure out how to correctly complete this procedure, what documents are needed for this, and what amount you can expect when returning.

Is it possible to get money back for a car title if I sell the car?

The current insurance upon sale of the vehicle is automatically canceled due to the impossibility of use by the new owner. In this case, the previous owner must contact his insurance company in order to terminate the MTPL policy early and return its cost.

The main legal reasons for early termination of an MTPL agreement and the return of part of its cost are:

• sale of a car and subsequent change of its owner;
• inability to restore the vehicle as a result of an accident;
• car recycling according to the state program;
• death of the owner of the vehicle - relatives can receive funds upon return.

The owner of the car has the right to close the insurance contract at any time during its validity period, but if the decision for this is not for legal reasons, but only the desire of the owner (for example, during a long departure and the car is idle), a refund in this case is not provided.

How to get money back for an insurance policy after selling a car?

The process of returning funds for an unused period of compulsory motor insurance is not complicated; the main thing is to correctly collect all the necessary documentation and act in accordance with the rules of the law.

What documents are needed to return the balance?

In order to begin the procedure for returning funds for the unused period of the MTPL policy, it is necessary to collect a certain package of documents. These include:

• identification document of the applicant (passport);
• MTPL insurance policy;
• vehicle purchase and sale agreement;
• vehicle passport with the details of the new owner (optional document, provided upon request of the insurer);
• a certificate with a bank account number for transferring funds by bank transfer;
• receipt for payment of insurance payments.

Depending on the nuances of the situation, you may need:

• notarized power of attorney for a representative;
• documents confirming the disposal of the car.

Submitting an application for termination of the contract

After the documents have been collected, you must personally contact the office of the insurance company. On the spot, you must draw up an application for early termination of the MTPL agreement. Key points of the statement:

1. full name, address, contact information of the insurance company;
2. passport and contact details of the applicant;
3. OSAGO data – date of issue, number and series;
4. reason for early closure of the contract;
5. method of receiving funds;
6. list of documents provided;
7. date of writing and signature of the applicant with transcript.

• Download the application form for termination of the MTPL agreement
• Download a sample application for termination of the MTPL agreement

After writing the application, the insurer must make photocopies of the documents and mark the document acceptance certificate with a signature and seal on the application. Also, the insurance representative is required to put the date and signature on the application, thereby confirming its acceptance.

Insurance premium calculations

In the previously mentioned paragraph 4 of Art. 10 Federal Law stipulates 2 conditions for the refunded amount:

Only the part of the insurance policy necessary for payment of insurance payments is subject to return. As a rule, only 77% of the cost comes from insurance premiums and is taken into account when returning. The remaining 23% is non-refundable and is distributed to other needs, namely:

• 3% is transferred to the Russian Union of Auto Insurers;
• 20% falls on payment for the transaction.

The refunded amount must be proportional to the unused period. The period is calculated from the moment the car is sold and the application for return is submitted. The sooner the former owner contacts the insurance company, the greater the amount he will be able to return upon return.

Now let's figure out how to calculate the balance of insurance funds. In order to independently understand how much you can expect when returning, you can use the following formulas:

• BC – return value;
• 77% – cost of insurance payments;
• n – number of unused days;
• 365 – number of days in a year;
• PS – the initial cost of the policy.

For example, the cost of purchasing a MTPL policy for 1 year cost the owner 5,900 rubles. After 45 days, the owner decided to sell his car and return the unused insurance portion. Based on the above formula, we will make the calculation:

(0.77 * (320/365)) * 5900 = 3982.9 rubles can be returned by the former owner of the sold car, subject to timely contact with the insurance company.

Termination of the contract with the insurance company and the deadline for returning the remaining funds

After collecting documents, writing an application and calculating the amount to be returned, the insurer operator must draw up an act of acceptance of the application for the return of the unused insurance portion.

Within 14 days, the insurance company reviews this application and, if the basis for the return is legal, transfers funds to the applicant’s account.

If after two weeks the money has not been received into the account, you must first contact the bank to check the receipt of funds. If the money has not been received by the bank, you must contact the central office of the insurer and request a report on sending the money.

What to do if the insurance company refuses to pay?

The insurance company has the right to refuse to return part of the insurance payment in case of premature termination of compulsory motor liability insurance in the following cases:

• when filling out the application, false information was provided, and the documents provided were forged;
• loss of the insurance company's license to carry out insurance.

If all the specified data is correct, and the insurance company has a license to carry out its activities, but refuses to pay part of the funds, you must first contact the Russian Union of Auto Insurers. You must have a copy of your MTPL insurance policy and an application for early termination with you.

RSA controls and audits the activities of insurance organizations, so the likelihood of a refund after contacting this organization is quite high. If the Russian Union of Auto Insurers did not influence the decision of the insurance company and the money was not paid, you must go to court to assert your rights.

Many people change their car quite often when the insurance policy is still valid. In this case, after selling the vehicle, the owner can return the unused insurance. To do this, just collect the necessary documents and contact the insurer’s office. As a rule, this procedure does not cause difficulties and is resolved within two weeks.

If you find an error, please select a piece of text and press Ctrl+Enter .

Early repayment of OSAGO: how to get money back when selling a car

​Terminating a contract with a car insurer may be necessary in different cases, but most often the MTPL policy becomes unnecessary when the car is sold and the insurance period has not yet expired. Unlike the CASCO agreement, which can be terminated at any time without explanation and receive part of the money back, early termination of the OSAGO agreement requires valid reasons, such as the sale of a car. There are no difficulties in this procedure, so do not be afraid to apply for a refund. Today we will talk in detail about how to get your money back for compulsory motor insurance when selling a car.

What circumstances allow you to terminate the contract?

Russian legislation gives the motorist every right to contact the insurer in order to terminate the MTPL insurance contract. In return, the insurer is obliged to make calculations and return to the policyholder the unused portion of the amount, taking into account deductions in its favor.

In what cases is the contract terminated with the subsequent return of unused funds to the client:

1. Selling a car . The most common case. The new owner of the car will no longer be able to use the insurance issued to the previous car owner; he will have to draw up a new document. Accordingly, the previous insurance, even if it has not expired, becomes effectively cancelled. When selling a car, a person is not obliged to inform the insurer that he no longer needs the policy; he can at least throw it away. But since insurance costs a lot of money, it is better to contact the insurer for a refund of the unspent amount. Naturally, the more days before the end of the contract, the greater the refund amount. Attention : the amount of payments depends on the efficiency of the driver, since the calculation is carried out from the moment the application is submitted, and not from the day the car changes hands.
2. The vehicle cannot be restored . This is also a fairly common reason for contract termination. This usually happens after a serious accident or if the owner decides to dispose of his car under a government program.
3. The insurance company lost its license . For those people who are faced with such a situation, it is already quite difficult to return unspent funds; this may have to be done through the courts. In this case, it will be much easier for many to wait until the end of the contract, and until then, calmly drive their car. If a company loses its license, many of its obligations are assumed by the Russian Union of Auto Insurers, which will make payments in the event of an accident that occurred due to the fault of clients of an organization with a revoked license. In this case, it is necessary to separate the revocation of a license and the limitation of the validity of a license. In the latter case, the company will lose the right to enter into new contracts, but it will remain the executor of obligations under previous contracts.
4. Death of the vehicle owner and policyholder . In this case, the heirs of the deceased will be able to receive the funds.

You can terminate the contract without explaining these reasons, but in this case you cannot count on the insurer returning unused funds.

Procedure

If the reason for terminating the contract is one of the first two possible reasons from the list in the previous section, you should contact directly the company with which the MTPL agreement was concluded. To receive a refund, submit an application accompanied by the necessary documents. The list of such may vary depending on the requirements of the insurer and the reasons for termination of the contract. May require:

• copy of passport and original;
• the original MTPL policy (it remains with the insurer, but just in case it is better to keep a copy of the policy, which may be needed, for example, in the event of litigation in court);
• a copy and original of the car purchase and sale agreement;
• a copy of the vehicle passport indicating the first and last name of its new owner;
• a receipt for payment of insurance premiums (it is also advisable to keep copies of the receipts for yourself; on the contrary, you can give copies to the insurer, leaving the originals with you);
• vehicle disposal certificate.

Not all companies practice issuing cash, so you will additionally need to take a certificate from the bank indicating the details of your current account.

The application itself is quite simple. In the main text, you need to indicate the reasons for terminating the contract, demand the return of the unused amount (in fact, two types of amounts : the redemption amount directly, which the driver did not manage to spend completely, and funds that were paid as insurance premiums) and indicate to which account money needs to be transferred. The application must be drawn up in two copies. You need to keep one document after the insurance company specialist has written the incoming number and date of receipt on it.

Not only the policyholder himself, but also his authorized representative can submit an application. Although if you do this personally, there is a greater likelihood that the funds will be returned as soon as possible.

Sample application for the return of compulsory motor liability insurance when selling a car

To the company (name of organization

insurer and legal address)

from the insurer Ivanov Ivan Ivanovich,

residing at the address: (specify the exact

address and telephone number for contact)

APPLICATION FOR EARLY REPAYMENT OF MTPL AGREEMENT

In June 2016, between me, Ivan Ivanovich Ivanov, and your company, an agreement was concluded for compulsory motor third-party liability insurance when using a vehicle (we indicate the make of your car and its model, state registration marks, policy number and expiration dates). According to the Civil Code of the Russian Federation (Article 958), I, as the policyholder, have the right to cancel the contract at any time. Based on the rules of Decree of the Government of the Russian Federation No. 263, adopted on May 7, 2003 (taking into account subsequent amendments), I inform you that in case of early termination of the contract for the reasons specified in this Decree, the insurer is obliged to return to the policyholder the funds for the unused period of validity of the MTPL policy.

Based on the above, I ask you to terminate the MTPL contract (indicate the number and validity period) from the moment of filing the application and return to me a proportional part of the insurance premium for the unused period of the contract. The reason for termination is the sale of the car.

Please transfer the funds to my bank account using the specified details (enter the bank details below).

Attachments (hereinafter we list all additional documents that we attach to the application, for example, in this case, a mandatory document, in addition to a copy of the passport and the original OSAGO policy, will be a copy of the car’s passport, the purchase and sale agreement).

On the left we indicate the date of submission of the application, and on the right we put our signature and write our last name, first name and patronymic.

Let us remind you that the application must be written in two copies (or a copy made), give one to the company, and ask for a mark on the acceptance of the document on the second. You can also use the option of sending the application by registered mail with acknowledgment of receipt.

How much can you expect?

How to calculate the refund amount under compulsory motor liability insurance upon termination? Before submitting your application, it would be a good idea to calculate the amount that should be returned to you after termination of the contract. It does not need to be indicated in the application; usually companies carry out the calculation correctly, taking into account, however, in their favor the maximum possible deduction amount. It is 23 percent - the organization takes 20 percent for business management (for the production of forms, use of equipment, payments to employees, etc.), and transfers three percent to the Russian Union of Auto Insurers (from this money a fund is formed for paying compensation).

The calculations are quite simple using the following formula:

Refund amount = (A-23%)/365*B (where A is the annual cost of the policy, B is the number of unused days).

Let's say the cost of the policy was 20 thousand rubles. We subtract 23 percent from this amount. 16 thousand 400 rubles remain. One day of insurance in this case will cost 44 rubles 93 kopecks. You decided to terminate the contract exactly 215 days after the conclusion of the transaction, you have an unused period of 150 days, which means that the unused portion of the funds is 6 thousand 739 rubles. This is exactly the amount the insurer must return to you, but only if the contract was terminated for the reasons specified in the MTPL rules.

How quickly will the company return the funds?

According to the law, no more than 14 days after registration of the application. During this period, the company is obliged to transfer money to its former client to the bank account specified in the application. It’s even easier if the organization practices issuing funds in cash. You need to find out this in advance so that in your application you can indicate another method of refund instead of bank details. In this case, the waiting time is reduced to a minimum, and the driver will most likely be able to receive the money right on the day of application.

If the insurer does not fulfill its obligations and does not return the amount in due time, the policyholder can write a written complaint addressed to the head of the organization, and also, if the case does not move for a long time, contact the prosecutor’s office, the Russian Union of Auto Insurers and the judicial authorities. For violations, the company may be deprived of its license.

What to pay attention to

Every holder of an MTPL policy needs to know that when selling a car that was specified in the policy, not only the policyholder himself, but also the new owner of the vehicle has the right to receive unused funds. It is unlikely that the new owner will immediately run to the insurer with a request to pay him the amount unused by the previous owner of the car, but this option is still possible.

Previously, experts advised that when selling a car, first settle the issues with the insurer, and then sign a sales contract (in this case, a certificate-invoice would serve as confirmation of the transaction), but now it is unreasonable to do so, since the re-registration of rights to a car has an extremely short time frame, only 10 days, and it’s better to spend time on this procedure.

The easiest way is to get a receipt from the new owner that he will have to pay compensation to the former owner of the car for the insurance policy. Better yet, include in the price of the car the amount due under insurance for return.

Another important point: some policyholders are not satisfied that the company returns the amount taking into account the deduction of 23 percent. In principle, such disturbances are justified. The Civil Code of the Russian Federation (Article No. 958) states that upon termination of an insurance contract, the organization retains an insurance premium equal to the period of validity of the document. There is nothing mentioned there about deductions. There is no mention of withholding in the current MTPL rules approved by the Government. The problem is that today there is no law on the termination of an MTPL policy, and therefore there are no clear and strict instructions regarding this operation. In practice, there is just such a return scheme taking into account deductions; its inappropriateness can be proven only through the court, which is not always justified.

But there is a way out . With minimal losses, the contract can be terminated by transferring the balance to a new MTPL policy, for example, if the policyholder has already bought a new car, or to a CASCO contract issued by the same company. However, the recommendation does not always work, since companies may evaluate their work differently.

Please also note that the policyholder requires that you apply for unused funds no later than two months after the sale of the car. If this point is not met, you may well be denied payments. The shorter the unused contract period, the lower the payment amount. And indeed, if there is a week or a month left before the expiration of the policy, the amount will be small; perhaps the person will spend more money on traveling to the policyholder than he will receive later. But if the policy expires after 3 months or more, then it is better to apply for a refund.

If you do not get your money back for compulsory motor liability insurance when selling a car, or you have any other questions, then our on-duty lawyer online is ready to answer them promptly.