What to do with insurance when selling a car

What to do with insurance when selling a car?

Car insurance is convenient for vehicle owners, as it allows them to compensate for unplanned expenses. The only disadvantage of car insurance is the cost of this service. When using the car, the cost of purchasing insurance pays off. But what to do if the vehicle is sold, but the policy is still valid?

For car owners who are faced with this situation for the first time, the question is quite difficult. But in practice, solving this problem is not difficult; the remaining funds will not be lost if you follow a certain algorithm of actions.

What to do with the MTPL policy when selling a car?

The MTPL insurance policy is issued by the car owner when purchasing a car. In the future, it is extended until the vehicle is disposed of or sold to another owner.

It is quite problematic to predict the time of sale by the end of the policy.

Usually the reason for the sale is due to certain circumstances that have nothing to do with insurance.

In accordance with paragraph 8 of Article 15 of Federal Law No. 40-FZ “On Compulsory Motor Liability Insurance” dated April 25, 2002, the insured driver is obliged to notify the policyholder of changes in essential information specified in the insurance contract. Such information, in particular, includes information about the owner of the car.

When selling a vehicle, the MTPL insurance policy can be:

• re-registered to a new owner;
• terminated with the return of the unused portion of the funds.

The policyholder should be contacted as soon as possible after the official transfer of ownership.

When returning funds, the calculation is made from the date of the written request to the policyholder, and not from the moment the purchase and sale agreement is concluded.

Can the policyholder keep the compulsory motor liability insurance?

When selling a car, the car insurance loses its relevance. The policy is registered on a specific car and it is impossible to use it on another car without notifying the policyholder. But OSAGO is very loyal to a change of owner or early termination of contractual relations.

After signing the purchase and sale agreement, the owner must decide on the priority of his actions. If he wants to keep the policy for himself, then this can be done by re-issuing documents for another car. This procedure occurs quite often when the sale of one vehicle entails the purchase of another.

Theoretically, the seller can keep the insurance for himself just like that, but this entails a loss of funds and does not make any reasonable sense. You cannot use a policy that has not been renewed.

How to transfer insurance to a new owner?

Renewal of insurance is carried out in one stage. The procedure is simple, but has its own mandatory steps. To enter the details of the new owner, the seller and buyer must visit the office where the original insurance contract was concluded. If the OSAGO remains with the same owner, but he changes the car, then only the owner of the policy comes to the office.

When visiting the office you will need to present the following package of documents:

1. OSAGO policy.
2. Vehicle purchase and sale agreement.
3. PTS of a sold car and PTS of a new car, if we are talking about changing the car in the papers.
4. Identification card of the new owner when the owner of the policy changes.

Re-registration may entail a recalculation of the cost of insurance. This is possible in two cases - the new driver has less experience, and a car with more power fits in.

Do you need insurance when selling a car?

The process of transferring a car from the seller to the buyer does not require an insurance policy. A vehicle may not have a valid vehicle license at all, but still be sold.

Insurance may only be needed if the car is sold without re-registration of the document.

You can sell a car by signing a general power of attorney. In this case, the rights to the car nominally remain with the previous owner, and the new owner has the opportunity to freely use the vehicle. The two parties can go to the policyholder's company and add the trustee's details to the policy. When entering data for a new user into OSAGO, its validity period does not change.

How is the new owner’s data entered into the contract?

A new owner can be included in the insurance document by terminating the old one and concluding a new policy, or by making additions to an existing contract.

In the first option, the data entry process looks like this:

• a written application for termination of the contract is drawn up;
• a package of mandatory documents is provided, which includes, among other things, the vehicle’s DCP;
• a new insurance contract is concluded with information about the buyer and owner of the car. If necessary, the cost of services is recalculated.

When entering data into a valid insurance document, the procedure is performed as follows:

1. Discuss with the buyer the terms of the transfer of compulsory motor liability insurance. It is recommended to enter into an agreement to pay the full cost of the policy to the seller.
2. Write an application to make adjustments to the vehicle registration certificate.
3. Visit the policyholder together - the seller and the buyer.

Typically, insurance companies have nothing against such changes and freely introduce new information.

How to terminate the agreement?

The MTPL insurance contract can be terminated at any stage of cooperation. Selling the machine is also a valid reason to terminate service. If the relationship is broken, the car owner has the right to receive back those funds that were paid for the unspent period.

The refund amount is calculated as the difference between the elapsed period and the remaining period. In this case, the client receives not 100% of the difference received, but only 77%. The remaining 23% goes to the following needs:

• 20% to cover the costs of the insurance company;
• 3% is transferred to the Union of Russian Insurers.

Each insurance company has its own algorithm for terminating contractual relations, but, in general, it consists of three stages:

1. The car owner contacts the policyholder and writes a written statement.
2. A package of documents is provided.
3. The balance is calculated.

At the last stage, the insured receives the cash difference in his hands.

Where to go?

To terminate the car insurance contract and receive the remaining amount, you must contact the policyholder directly. Contractual obligations can only be terminated by the company where the contract was concluded.

What documents will need to be provided?

To terminate cooperation, the car owner will need to submit an application. The form indicates the reason for termination of the contract, information about the owner and information about the car. The application records the date of application, which is the point for calculating the remaining difference. The following documents are attached to the application:

• original insurance contract;
• document on the purchase and sale of a car;
• passport of the insured.

You should also have receipts for payment of insurance premiums with you.

OSAGO can be terminated due to the sale of a car at any time. If necessary, the existing agreement can be renewed for a new owner or for another car. The insurer has the right to establish its own rules for the procedure for terminating contractual obligations.

Insurance when selling a car: is it necessary and what to do with the policy when drawing up a contract?

Buying a car second-hand is not a rare occurrence. However, often both the seller and the buyer have questions regarding car insurance.

The new owner is interested in whether it is necessary to re-conclude a car title agreement and when to do this, whether it is possible to purchase it along with the car. And for someone who sells a car, it is important to be able to get the money back if the insurance is not used.

This has become especially relevant in recent years, since the cost of compulsory motor insurance has increased significantly. And if a CASCO agreement was also issued for the vehicle, then the amount returned by the insurance company can be quite significant.

Is compulsory motor liability insurance necessary or can the car be sold without it?

According to paragraph 1 of Art. 4 No. 40-FZ, the obligation to enter into a car insurance agreement arises with the owner only if the car is used . Moreover, the frequency of use is not important, even if the owner or another trusted driver gets behind the wheel once a year, the law obliges him to enter into an agreement. However, in order to sell a car, a compulsory motor liability insurance policy is not required.

Thus, if a car passes to a new owner, which the previous owner did not drive, then there may be no compulsory motor liability insurance policy, and this is not an obstacle to concluding a purchase and sale agreement. But if the vehicle was regularly used, then a motor vehicle license agreement for it must be concluded.

The obligation to conclude an agreement occurs immediately after the emergence of ownership, that is, after the conclusion of a purchase and sale agreement and the transfer of money to the old owner.

What to do with the policy during a transaction?

When selling a car, the previous owner reasonably has the question of what to do with the MTPL policy, because the money has already been paid for it, and he no longer owns the car that appears in the contract.

There are several options: terminate the auto insurance contract and receive the money, reissue the policy for a new owner or for a new car if you plan to purchase one. In this case, you will have to contact the insurer's office and spend a certain amount of time.

However, if the unused period of insurance is significant, or if the car has a CASCO agreement, the funds received may justify all the efforts.

Re-register for a new car

If the seller plans to purchase a new car, then he may not transfer the old policy to the buyer and not terminate it, but renew it for a new car. There are no legislative obstacles to this, because civil liability insurance is provided to the owner of the car, and not to the property itself .

However, in practice this method is rarely encountered. There are several reasons for this:

1. Obstacles on the part of the insurance company, for whose employees this is extra paperwork without payment for the sale, because the contract is not newly concluded.
2. Buying a new car often does not happen at the same time as selling the old one, and it is more profitable to first return the money and then buy a policy for the new vehicle.

If the power of the new car is higher, you will have to pay extra when renewing your policy. In the opposite situation, the money is not returned.

The period of use of the new car will begin when the application was submitted , and will end simultaneously with the expiration of the policy, unless otherwise provided in the old contract. Therefore, if a significant amount of time passes between the sale of an old car and the purchase of a new one, it will be more profitable to terminate the existing policy and then conclude a new one.

Re-register to new owner

This requires prior agreement between the seller and the buyer. The policy can be transferred either free of charge or for payment of the remaining amount of insurance.

This possibility is legally regulated by Art. 960 of the Civil Code, which states that when ownership of the insured property is transferred to a new person, the rights and obligations under the insurance contract also pass to this person. This can be documented in the form of an additional agreement to the purchase and sale agreement or reflected in the agreement itself.

This method is inconvenient because the old owner remains the policyholder, so his personal presence will be required both when re-issuing the contract and when making any changes during the validity period.

Refund money for unused policy

To do this, you will need to contact the insurer's office as soon as possible, since the calculation of the refunded funds is made from the moment the application is submitted. Required documents:

• application for termination of the contract and refund of money;
• original policy and payment receipt;
• policyholder's passport;
• car purchase and sale agreement (copy);
• bank account details if the transfer is planned by non-cash method.

This method is used most often because it does not bind the new and previous owner of the vehicle, and allows you to receive fair compensation for unused insurance.

How to get your money back for MTPL insurance when selling a car is discussed in a separate article, and how to write an application for termination of a contract and a refund and what documents need to be attached to it, read here.

What documents will be needed?

The package of documents provided is standard ; the insurance company has no right to request anything else. When contacting the company's office, you must have with you:

1. Application for amendments (usually completed at the insurer’s office on its letterhead according to a specific template).
2. Original policy and payment receipt.
3. A copy of the purchase and sale agreement.
4. Documents for a new car:

• PTS;
• registration certificate;
• diagnostic card - if the policyholder wants to renew the policy for his new car.

Policyholder's passport.

Passport and driver's license of the new owner, as well as driver's licenses of all persons whom he plans to allow to drive - if the MTPL agreement is reissued to the new owner of the car.

It should be borne in mind that an additional payment may be required, but only if the risk increases : a change in the region of registration, the admission of young and inexperienced drivers or an unlimited number of people. In all other cases, attempts by insurer employees to charge a fee “for processing documents” are illegal.

Can the insurance company refuse?

There are no legal grounds for refusal, but in practice this occurs quite often. Employees do not want to waste their time re-issuing documentation, pushing drivers to enter into a compulsory motor liability insurance agreement again.

In this case, you should refer to the relevant regulations, provide the entire package of necessary documents and be persistent.

What to do with CASCO?

If the car has a CASCO policy, which costs much more than compulsory motor liability insurance, the previous owner is also interested in returning part of the funds for unused protection. However, in this case it is impossible to say unambiguously whether such an option is possible. Art. 958 of the Civil Code of the Russian Federation states that in case of early termination of the contract at the initiative of the policyholder, the amount of the paid premium is not returned, unless otherwise provided by the contract.

Most large insurers still provide a similar option, while reserving the right to pay not all the money for the remaining period, but minus a certain penalty.

It remains possible to renew the contract for the new owner, if this is provided for by its terms. At the same time, the insurer may require additional payment if the risk increases : new drivers with less experience and experience are allowed to drive.

When selling a vehicle, the old owner must weigh all the options and decide what is most profitable for him to do with the MTPL and/or CASCO policy.

Termination of the contract will not always be the best option: for motor insurance, the insurer will return only 77% of the amount for the period remaining after filing the application, and for CASCO, the owner may be left with nothing or lose a significant part of the money - it all depends on the terms of the contract.

It is possible to transfer the policy to the new owner - free of charge or by receiving payment from him for this. In this case, the policyholder must personally visit the company’s office to make changes to the policy. An additional payment may be required when adding new drivers with less experience and experience to the contract, when allowing an unlimited number of people to drive, or when changing the region of registration of the car.

Read about whether you can get your money back for CASCO when selling a car and how to do it here.

Re-registration for a new car is possible only for an MTPL policy. However, if the new car is more powerful, the insurer will also take an additional payment for the increased risk.

What to do with an MTPL policy when selling a car

Each car purchase and sale transaction is associated with the issue of further use of the MTPL policy. As a rule, at the time of selling a car, the validity of the insurance contract remains valid for several months. Depending on the intentions of the seller, in this situation there are several acceptable options for disposing of the policy.

Can the new owner take advantage of the MTPL policy?

The Law “On Compulsory Motor Liability Insurance” (Federal Law No. 40-FZ of April 25, 2002) provides clear clarifications on the issue of the rights of the new car owner to use the policy. The buyer of the car will be able to use the “motor citizen” when entering information about him into the insurance agreement. The following options for resolving the situation are acceptable here:

• complete re-issuance of the current MTPL policy when selling a car - the powers of the owner and the insured are transferred in favor of the buyer;
• closure of the policy and return of part of the funds;
• entering information about the new owner of the vehicle into the current auto insurance policy.

The concepts of “insured” and “owner” of a car are not identical to each other.

Changing the owner’s data in the insurance contract does not eliminate the need for the participation of the policyholder (seller) in resolving all material disputes upon the occurrence of an insured event.

What should the previous owner do?

When re-registering a car title to a new person, the previous owner must contact the insurance company with a corresponding application. If the car is sold to a stranger, it is recommended to completely re-register the rights of the policyholder and the owner in the MTPL agreement.

Entering data about the new owner into the current contract without changing the policyholder is only appropriate if the rights are transferred to a close relative. At the same time, the previous owner of the car continues to operate it.

If the parties to the transaction do not wish to reissue the MTPL policy, the previous owner has the right to terminate the current contract.

Why is it important to close your MTPL policy?

The current MTPL Rules clearly state : refund of payments for the remaining insurance period is possible if there are compelling reasons for taking this action. Re-registration of rights to a car in favor of another person is included in the list of legislative grounds for terminating a contract with an insurer. Without cancellation of the agreement, the previous owner will not be able to claim any financial compensation.

How to get part of the insurance amount back

Refunds of compensation for an unused insurance policy are carried out on the basis of a written application from the previous owner of the car. The package of accompanying documents includes:

• a copy of the policyholder's passport;
• contract of sale;
• insurance contract subject to cancellation;
• Bank details of the recipient of the insurance premium.

Sample application for termination of the MTPL policy

Refunds for compulsory motor liability insurance when selling a car are carried out from the date following the submission of the request to the insurance company. The insurance premium calculation scheme looks like this:

Policy cost*number of remaining days in the insurance period/365 – 23% = amount to be refunded.

23% is calculated by default for various costs (payments to the insurance fund, RSA, etc.).

When are payments made?

Payment of compensation for an unused auto insurance policy is carried out within 14 days from the date of acceptance of the application from the policyholder. If the specified period is overdue, the insurance company must pay a penalty in the amount of 1% of the due amount for each day of debt to the client.

In what case does this not work?

According to the MTPL Rules, it will not be possible to return money for an insurance policy upon termination of the contract in a number of cases:

• if the policyholder resorts to fraud and provides deliberately false information about himself and the vehicle in the documents;
• if the insurance agreement is canceled due to the owner’s lack of need to operate the car;
• if the MTPL policy was purchased in installments and payment has not been completed;
• if the insurance company declared itself bankrupt.

Is it possible to reissue an existing MTPL policy?

The car seller can re-register the current vehicle license for another car. These actions are appropriate when selling an old car and buying a new one. The insurance will be reissued for the remaining validity period of the auto insurance policy.

The procedure is carried out on the basis of a written request to the insurance company, supported by a package of documents. The applicant will need:

• a copy of your general passport,
• a copy of the purchase and sale agreement of the previous car;
• insurance agreement;
• registration certificate for a new vehicle;
• driver's license.

The condition for recalculating the cost of the policy is increased engine power in the new car.

FAQ

Is it possible to insure a car without being its owner?

The law allows for auto insurance rights for every driver who has a license and legal access to a vehicle. In this case, the person will act as the official insurer of the car. In addition to the basic documents, you will need to provide a power of attorney from the owner of the car for the procedure for issuing an MTPL policy.

How many people can be included in the policy?

Insurance companies allow the possibility of specifying any number of people in the insurance contract. You can specify the owner of the car, the policyholder, and other persons who have access to driving the vehicle. Each driver can be assigned a separate insurance class, which can affect the reduction in the cost of “car insurance” in the future.

Is it possible to avoid costs of 20% of the premium amount when refunding money for an unused policy?

There is no requirement in the legislation to realize costs when compensating the insurance amount. Such a rule may not be specified in the insurance contract itself. These regulations are not legal, which means that the car owner has every chance to defend his material rights in litigation. At the same time, the costs of litigation will be higher than the insurance fee of 20% of the policy value.

Let's sum it up

When selling a vehicle, the owner has four options for disposing of the MTPL policy. He can initiate a complete re-registration of the car title to the new owner, or enter his data into the current insurance agreement. The contract can be canceled by refunding money for the unused insurance period. The law also allows for the possibility of re-issuing a valid policy from an old vehicle to a new one, provided that the engine power in the purchased vehicle is increased.

Issues relating to motorists' rights are often more important than they appear at first glance. A driver may lose his license or suffer other severe penalties due to ignorance or misinterpretation of laws and regulations. Do not be lazy to dive deeply into the essence of the issue being studied, do not hesitate to ask advice from professionals.

How to deal with insurance when selling a car

In our country, a lot of transactions for buying or selling cars are concluded every day. To do this, the parties draw up a DCT so that the car can be re-registered to the new owner. Often a car is sold before the insurance policy expires, so a reasonable question arises - what to do and what to do with insurance when selling a used car.

OSAGO remains with the policyholder

The most logical and fair option is to leave the policy with the car owner who paid money for it. In itself, this paper has no value for the buyer, since insurance is issued in the name of the owner of the car, which has already become the property of another person. But the former owner has the opportunity to receive compensation for unused insurance time.

After the transaction is concluded, the policy does not need to be destroyed or thrown away, as it is needed to receive compensation. To do this, you need to contact the insurance company and write a corresponding application. The sooner this is done, the more money can be received for the unused period of insurance, since the compensation period begins to be calculated from the date of drawing up the specified application. Within two weeks, the insurer is obliged to pay the amount due.

Renewal of insurance to the new owner

It should be said right away that this option is very burdensome for the initial owner of the insurance. But if, nevertheless, an agreement is concluded between the buyer and the seller of the car on the transfer of compulsory motor liability insurance when purchasing a car, then it is necessary to obtain permission from the insurer and correctly reissue the insurance.

Insurance companies are not very willing to engage in such “fraud” with documents. But if you act persistently and refer to paragraph 22 of Resolution No. 263 “On approval of the rules of compulsory insurance for vehicle owners,” then usually they have no choice and they meet halfway.

Decree of the Government of the Russian Federation dated 05/07/2003 N 263 (as amended on 08/26/2013) “On approval of the Rules for compulsory insurance of civil liability of vehicle owners”

22. During the period of validity of the compulsory insurance contract, the policyholder is obliged to immediately notify the insurer in writing of changes in the information specified in the application for concluding a compulsory insurance contract.
If the compulsory insurance contract specifies the limited use of the vehicle, the policyholder is obliged to inform the insurer in writing, before transferring control of the vehicle to a driver not specified in the compulsory insurance policy, about his acquisition of the right to drive this vehicle, as well as about a change in the period use of the vehicle compared to the period specified in the compulsory insurance contract. The policyholder is obliged to inform the insurer about the increase in the period of use of the vehicle before the expiration of the period of use of the vehicle specified in the compulsory insurance contract.

But based on paragraph 23 of the same Rules, they have the right to demand that the policyholder pay an additional premium (based on the established coefficients) for the increased risk. And it is really increasing. After all, it turns out that the policy still remains issued to the former owner of the car, and the new owner will now be able to drive the vehicle.

So, how to re-register compulsory motor liability insurance for a car buyer? After receiving consent from the insurance company, it is necessary to indicate the full name of the new owner in the insurance document itself in the “Owner” column. The column “Persons authorized to drive a vehicle” is also changing. In the “Insured” column, the full name of the person paying the money for the insurance remains. Changes can only be made in the presence of a representative of the insurer.

The following package of documents should be provided to the insurance company:

• application for re-registration;
• PTS;
• vehicle purchase and sale agreement;
• policy;
• receipts for payment of payments under compulsory motor liability insurance.

The buyer only needs a civil passport. There is no need to notarize documents. Insurers are mainly interested in the policy itself and receipts for payments under it.

In order to somehow interest the vehicle seller in dealing with this paperwork, the car buyer must pay him the amount of compensation for the unused insurance period. This agreement can be drawn up in writing as a separate agreement or can be included as a separate clause in the car purchase and sale agreement. It is best to notarize such agreements.

If the original owner simply transfers the MTPL car to the buyer, then without violating the law, he will only be able to drive the sold car for 10 days. After this time, any inspector who stops the vehicle for inspection will issue a fine for driving without insurance.

There are a lot of disadvantages to this method of transferring compulsory motor liability insurance, and they consist in the need for a number of actions, such as, for example:

• attracting a vehicle seller;
• making an additional insurance contribution;
• notifying the original owner of the vehicle about the occurrence of an insured event, since he will remain the main insured.

Renewal of the policy for another car

This option is quite rare in practice, but it has a number of significant advantages. So, the essence of this method is that the policyholder does not transfer the policy to anyone and does not receive compensation for it, but proceeds along one of the indicated paths:

1. Renews OSAGO for another car of his own, the insurance of which was carried out by the same company. Another variation is that a new car was purchased recently and there is no insurance for it yet. Then, in agreement with the insurer, the old policy can be reissued for a new car.
2. Unlimited insurance is frozen for some time. That is, if you plan to purchase a new vehicle in the future, you can not terminate the contract with the insurer, but freeze this agreement until you purchase a new car.

This route is good because you don’t have to break off relations with the insurance company, which means you can maintain your status as a reliable policyholder. You can also save the bonus-malus coefficient accrued for this year. If there are no accidents on the road due to the client’s fault and the length of the relationship, next year they will provide a more significant discount when taking out a car policy.

So, if there is an agreement between the seller and the buyer of the vehicle on the transfer of the insurance policy, then you should contact the company and reissue all documents in the prescribed manner. If the former owner decides to receive compensation or leave OSAGO for his future car, then the new owner must go through the registration and insurance procedure in full. He will also have to undergo a vehicle inspection.

Sold a car - what to do with the MTPL policy

Buying and selling used cars is a common occurrence among motorists. When parting with the sold product, a problem arises with MTPL insurance when selling the car, because often its validity period does not expire soon.

There are several options for disposing of the policy, depending on whether the seller needs a new MTPL or whether it is more important to return part of the amount.

What to do with MTPL when selling a car

Law No. 40-FZ (Clause 8, Article 15) specifies that in the event of any changes in relation to the object of insurance, drivers, policyholders, it is necessary to notify your company in a timely manner. When transferring a car to a new owner, the following options may be available:

1. Termination of the insurance contract before its expiration date and submission of an application for a refund of part of the funds for the remaining period.
2. Renewal of the policy for a new owner or expansion of insurance by adding a new person.
3. Transferring insurance to a new vehicle.

In the first case, the car owner simply returns the money due to the lack of need for further services. Sometimes the seller and buyer independently determine the conditions for transferring the car, including the possibility of re-issuing the policy. In the latter situation, when after the sale it is planned to purchase another vehicle, the policyholder can initiate the procedure for renewing insurance services for a new car.

Re-registration to another car

When the alienation of a car is associated with the subsequent purchase of transport, the possibility of re-registration for a new purchased vehicle may be in demand. In this case, the policyholder does not receive money for unused services, but at the same time, a certain amount is saved for insuring a new car.

The condition for transferring services to another vehicle is to contact the same insurer where the car was previously insured, or the insurance services are transferred to a new car purchased after sale. If the policy was issued without restriction of admission, it is possible to freeze the insurance without terminating the agreement until a new vehicle becomes available, but this measure is agreed upon individually between the parties.

This option ensures the preservation of the KBM coefficient, which affects the cost of compulsory motor liability insurance.

Termination and refund

The policyholder has the right to early termination and refund of funds for the remainder of the time before the end of the contract. If the policy is canceled due to other circumstances, funds will not be returned. To find out about the likelihood of receiving money for the unused period, you should be guided by clauses 33, 33.1 of the current OSAGO Rules, which directly establish the right to return funds upon sale. If the right to dispose of a car is transferred under a general power of attorney, early termination of the contract does not lead to a refund of funds, because legally the owner of the vehicle has not changed.

To receive the remaining unused funds, an application is submitted to the company. To confirm delivery of the application, it is written in 2 copies - the second remains with the policyholder, with a note indicating that the insurance company manager has accepted it for consideration. The mark must include the registration number of the incoming document, the position and name of the insurance employee. In the future, this mark will make it possible to prove the fact of the appeal when drawing up a complaint to supervisory and regulatory organizations (RSA and the court).

The application is addressed to the head of the Investigative Committee, to the department at the place of application. The client provides his own information and contact phone number. It formulates a request for termination of contractual obligations, indicating the number and date of the agreement in connection with the alienation of property on a reimbursable basis, reimbursement of the cost of unused services according to the details provided. The application is signed, dated and supporting documents are attached (policy, payment document for the purchase of compulsory motor insurance, transaction documents, for the car and the applicant). Before handing in the original, it is recommended to keep a copy in hand, as well as copy payment confirmation checks and receipts.

The unused period is counted from the moment the application is delivered to the insurer, so you need to contact the insurance company with a request to terminate cooperation as early as possible. According to clause 1 of Bank of Russia Directive No. 3854-U dated November 20, 2015 “On minimum (standard) requirements for the conditions and procedure for implementing certain types of voluntary insurance,” funds are returned within the next 2 weeks.

The calculation of funds to be returned is made minus 23% (20% of which represents compensation for the company’s expenses, 3% – funds paid to RSA). The issue of the legality of reducing the amount returned to the policyholder's account is often considered by the courts in favor of motorists, but there is no uniform practice.

Entering the new owner's data into the contract

By agreement of the parties, an agreement is concluded between the seller and the buyer to enter information about the new owner into the current policy. To reissue insurance to the buyer, a standard package of papers is prepared. The first step is to present a valid diagnostic card, and when the validity period expires, a new inspection at a service station is required. Next, the insurance company where the policy was previously issued provides the following documentation:

• passport;
• diagnostic card;
• driver's license;
• documentation for the vehicle.

In the re-registration procedure, it is important that the buyer is indicated as the new owner, because otherwise it will not be possible to register the car with the State Traffic Inspectorate. When changing the policyholder, it is important that the previous car owner is present during the procedure. The new owner signs the contract, receives a policy, accident notification forms, and a list of insurance company branches that can be contacted in the event of an insured event. An important condition of the process is maintaining the previous validity period; extension during re-registration is unacceptable.

It should be noted that sometimes the rules of the insurance company do not allow you to go through the re-registration procedure. Before applying, you should clarify in advance the possibility of changing ownership in your existing policy.

Do you need insurance if you are selling a car?

Sometimes a car is sold because it is no longer needed. In this case, expired insurance is not a basis for prohibiting the upcoming transaction. The legislation and rules for operating a car require that driving be carried out with a valid policy, however, with regard to other questions, what to do with the policy when selling, the problem is solved based on the further plans of the car owner.

If the seller does not intend to continue using another vehicle, the sale is carried out without a policy. There is no need to specifically renew the previous MTPL agreement. The only condition is that the car does not leave the garage or parking lot, as otherwise it will not be possible to avoid a fine and denial of compensation in the event of an accident.

If the seller intends to sell the vehicle immediately after the previous policy expires, new costs for the policy and subsequent return or reissue seem unreasonable. It should be taken into account that after signing the deed of sale, the new owner is legally given a 10-day period to re-register the papers and change the registration information about the owner.