MTPL insurance is issued for a period of several months to a year, and the cost of the policy increased noticeably in 2014-2015. Many drivers are concerned about the question of how to return part of the insurance premium if the car is sold and the insurance period has not expired? The answer can be found in the “Rules of compulsory civil liability insurance”. This document was approved back in 2003, and since then several amendments have been made to it.
In the document on compulsory motor liability insurance, Section VI, paragraphs 33-36 are entirely devoted to the issues of early termination of the contract. In clause 33.1, subclause “b”, we read that the policyholder has the right to terminate the MTPL agreement if the owner of the car changes.
Below, in paragraph 34, the following is stated:
- part of the insurance premium is returned to the policyholder in the event of early termination of the MTPL contract.
- death of the policyholder;
- destruction of the vehicle;
- change of owner;
- other cases provided for by law.
According to the same document, money may not be returned if it is found that the policyholder provided false information. The procedure for returning funds itself is not described in detail, only in paragraph 34, the last paragraph, we read:
- within 14 days after the IC receives the application for termination of the contract, part of the amount must be reimbursed.
That is, based on these data, we come to the conclusion that in any case we have the right to return part of the funds that were spent on registration of compulsory motor liability insurance. Please note that since April 2015, the base rate has increased from 1980 rubles to 4118, and, for example, the cost of compulsory motor liability insurance for a Moscow resident who has a car with an engine power of 100-120 hp will be in the range of 8-12 thousand .
Agree, it would be a shame if you paid for insurance and sold the car three months later. There is no desire to give ROSGOSSTRAKH 8-10 thousand.
How to get your money back for compulsory motor liability insurance - step-by-step instructions
Each individual insurance company has its own procedure. We will focus on ROSGOSSTRAKH, as the largest insurance company in the Russian Federation.
So, first of all, after selling the vehicle, you need to keep photocopies of the registration certificate with the new owner included in it, as well as a copy of the purchase and sale agreement. You will need them to confirm the transfer of the vehicle to a new owner.
Then you need to go to the nearest IC office, pick up an application form there and fill it out. This form can also be downloaded on the Internet, but it is better to fill it out in the office to avoid mistakes and not waste time on rewriting. It may also be that managers will want to send you to the main office, saying that they don’t do that kind of stuff. However, you have every right to insist, since termination of the contract is one of the functions that should be performed in any office - main, subsidiary, regional.
In addition, they may begin to persuade you to transfer this amount towards future insurance. Remember also that the date of termination of compulsory motor liability insurance is the moment of filing the application, that is, the sooner you write it and submit it, the more money you will receive in the end.
In addition to the above photocopies, you need to have with you:
- original MTPL policy;
- your passport as a citizen of the Russian Federation.
When you hand in all the documents, request that they put a mark on your copies that the documents have been accepted. That's it - now you can count down 14 days until you receive the remaining amount of the cost of compulsory motor liability insurance.
Money is usually transferred to a bank card - you must have it with you to make a photocopy - or transferred to bank details. If the money is not credited, you have the right to go to court, although it is better to clarify everything on the spot.
From time to time, situations arise when drivers want to return the money invested in the purchase of car insurance. The most common reason is selling a car. Indeed, why not get a thousand or two rubles back, if such an opportunity is provided for by law. It’s not that difficult to get your money back for compulsory motor liability insurance. It only takes a few simple steps, as well as the fulfillment of a number of conditions.
To return the cost of compulsory motor liability insurance when selling a car, you must rely on the following documents:
- Federal Law dated 04.25.02 in the current version dated 05.2016 “On compulsory insurance of civil liability of vehicle owners” (Article 10);
- MTPL rules developed by the Central Bank of the Russian Federation and the Regulations of the Bank of Russia (No. 431).
In what cases is early termination of the MTPL agreement provided:
- The policyholder has the right to terminate the MTPL contract if the car has been sold and the owner has changed, which is confirmed by the re-registration of the vehicle.
- The owner of the vehicle has passed away (you don’t even have to enter into inheritance rights to receive funds).
- The car is stolen or otherwise lost (including as a result of force majeure).
- Liquidation of the legal entity-insurer. Please note, it is the policyholder, not the insurance company.
- Liquidation of the insurer.
- The policyholder has the right to terminate the contract if the insurer's license is revoked.
- The insurer has the right to terminate the MTPL contract if it has identified false or incomplete information provided by the policyholder when concluding the contract. Moreover, this information was of significant importance when calculating the insurance premium (policy price). For example, this could be an underestimation of the car’s horsepower or an increase in the length of service in order to reduce the cost of the policy.
- Other cases provided for by the legislation of the Russian Federation.
In all of the above cases, reimbursement of money for termination of compulsory motor liability insurance is provided. In this case, the remaining policy period is calculated based on the date of occurrence of the event that caused the early termination of the contract, namely from the next day (applicable to clauses 2, 3, 4, 5).
In what cases is the money for the policy not returned?
So, the return of money for termination of compulsory motor liability insurance is not prohibited in any way, and a wide range of people can count on it. We are all familiar with one common phenomenon - the liquidation of a legal entity (the policyholder). This may be due to impending bankruptcy and the inability to fulfill their obligations. The rules regulating the procedure for compulsory civil liability insurance state that in this case the policyholder will not be reimbursed. There will be no compensation even when the MTPL contract is terminated at the initiative of the insurer due to incompleteness and unreliability of the information provided. If the owner of the car is going to leave for a long period of time and will not use transport, then this is not a valid reason for returning money for insurance. If he contacts the company, he will most likely be denied compensation.
How much of the money will be returned? Formula for calculating the refund under compulsory motor liability insurance.
D = (P - 23%) x (N ː 12)
- D- refund amount
- P- full cost of the policy
- N- number of months until the end of the policy term
- 23% - standard insurance policy indicator (implies certain expenses of the insurer).
They are distributed as follows:
The insurer's expenses include a 3% contribution to the RSA. For what?
This amount is transferred to reserve accounts from which compensation is paid. Moreover, 2% is the current reserve, and one is guaranteed.
20% remain in the company. They go towards operating expenses and managing client affairs. This includes servicing the policyholder, maintaining the insurance policy, its production, the use of various equipment, wages for employees preparing documents, etc.
That is, the basis for calculation is the remaining 77%.
So, the remainder, that is, 77%, is multiplied by the number of days during which the policy will be valid, divided by 365. Thus, the return of compulsory motor liability insurance when selling a car is advisable only if there are six months or more left before the expiration of the contract. If we are talking about 2-3 months, then the gamble is hardly worth the candle: the cost of travel to the insurance company may be higher. The due portion of the insurance premium is returned within 14 days from the date following the day of the written request to the company.
Documents required for a refund:- MTPL insurance policy (original);
- Application for refund of money for the policy indicating the reason;
- Identity document (passport or its equivalent);
- A receipt confirming the transfer of funds for compulsory motor liability insurance;
- A copy of the registration certificate (if the car is sold, then with a note about the new owner);
- A copy of the death certificate (if the refund under MTPL is carried out in connection with the death of the owner of the vehicle);
- A copy of the purchase and sale agreement (if the car was sold and the owner changed);
- Power of attorney from the new owner of the vehicle (after the sale of the car, if the latter does not want to be present when the insurance is returned);
- Disposal certificate (in case of destruction of the vehicle);
- A document confirming the inspection of the loss of the car (theft, death in emergency circumstances) or other evidence.
Drivers often face a problem such as the reluctance of the car insurer to accept a claim for a refund. It is worth noting that the regulatory legal acts do not contain an approved list of documents, and we are talking rather about established practice. If they don’t want to take the documents from you, you can send them by mail in a certified letter, with acknowledgment of receipt. In this case, the insurer will have to give an official response in writing, which can then be appealed in the prescribed manner. Now it’s clear how to return the MTPL: you just need to contact the company with which the contract was concluded by filling out an application in the appropriate form. If one of the above cases occurs, do not delay going to the car insurer: they periodically lose their license, and after that it will be impossible to get your money back.
Today's reality is difficult to imagine without car insurance. Having a good understanding of the obligations and rights of insurance agents, it will not be difficult to obtain compensation for compulsory motor liability insurance when selling a car. Therefore, let’s try to understand in more detail what car sellers are hiding from citizens.
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Russian legislation provides for compulsory vehicle insurance. OSAGO is an insurance policy that every car owner must take out. The object of insurance is any damaged property of third parties that may suffer as a result of a traffic accident.
Concluding an agreement with an insurance company implies that in the event of an accident on the road where the insured is at fault, the insurer will compensate for all material damage caused to the injured persons. This is what ensures civil liability.
Federal Law No. 40-FZ dated April 25, 2002 regulates the relationship between the insurer and the owner of the vehicle. It specifies actions in the event of a change in the owner of the vehicle. The former owner of the car must notify the insurance agency about its re-registration. The new owner is obliged to take out civil liability insurance for his vehicle before registering it or within ten days from the date of its acquisition (Article 4 of Federal Law No. 40-FZ of April 25, 2002).
Selling a car can be a planned event or a spontaneous decision. Some citizens, when carrying out a purchase and sale transaction, also transfer insurance to the new owner of the car. However, not everyone understands whether this is correct and how the MTPL refund is carried out when selling a car. The policy is essentially a contract that is signed by the insurance agent and the owner of the car under certain conditions. The document is concluded for a certain period of time.
The agreement is not tied to the vehicle, but to a specific policyholder. When purchasing a car, a citizen receives only the vehicle and everything that is in it: a radio, tools, additional accessories. The previous owner's insurance contract has nothing to do with it, since it is not registered there. In the event of an insured event, if the culprit is the new owner of the car, the insurance company under the old policy is not liable.
This is explained by three points:
- the owner of the car changes during the sale;
- when the vehicle is re-registered, it will be assigned a new number;
- The state registration mark may change.
The new owner, using the car for its intended purpose, is obliged to insure his civil liability (Article 4 of the Federal Law No. 40-FZ of April 25, 2002).
Failure to comply with this requirement under Article 12.3 of the Code of Administrative Offenses of the Russian Federation provides for administrative liability in the form of a fine. Its size is 500 rubles.
To reissue a policy, it is necessary to responsibly select an insurance company that will represent the interests of the policyholder. The preference will increase or decrease the possible chances of receiving compensation under compulsory motor liability insurance.
There are two options:
- Entrust the re-registration procedure to the previous insurer with whom an insurance agreement has already been concluded. This way there will be more chances to protect your interests.
- Find a new insurance institution that will resolve the dispute between the seller and the buyer.
When choosing an insurance agent, you need to pay special attention to his reliability. It is worth assessing the company's previous performance. Independent experts and insurance brokers can provide good advice. Independent agencies compile ratings of companies in the insurance market. The information obtained will help you form a definite opinion about the insurer. Of no small importance is the cost of the services provided by a legal institution, since prices are not constant. Some agents have tempting offers, discounts, and bonuses.
When selling a car, a citizen will have to choose one of the options to transfer his rights to the policy:
- Enter the future owner into the MTPL policy (Article 960 of the Civil Code of the Russian Federation). Thus, transfer the contract to him. The purchaser shall reimburse the amount of damage.
- Renew the contract with the insurer for the new owner of the car to cover upcoming payments.
- Terminate the concluded agreement with the insurance company. In this case, the insurer undertakes to pay a compensation amount for the unused period under the insurance policy.
Each of the listed methods must be discussed individually. It is advisable to make the decision in writing and certify it with the signature and seal of a notary. Let's consider the possible options separately.
The absence or presence of insurance payments does not affect the procedure for early termination of the contract (Article 10 of the Federal Law No. 40-FZ of April 25, 2002). They also do not affect the amount to be reimbursed by the buyer to the owner for the temporary use of his insurance policy.
In the package of papers for re-registration of civil liability, it is necessary to add a notarized agreement on compensation for the cost of insurance to the seller. This point can be included in the car purchase and sale agreement. You will also need a statement from the buyer containing a request to be included in the insurance policy.
Re-registration to a new owner
To transfer the insurance rights to another person and receive the funds spent on the policy, the seller will need to provide documents on ownership of the vehicle.
List of documentation:
- an application from the previous owner addressed to the insurance company regarding the return of the amount of unused insurance;
- a copy of the contract evidencing the sale of the car;
- photocopy of the technical passport for the car;
- insurance;
- receipts for the transfer of insurance amounts.
The above documents are not subject to notarization. For an insurance specialist, important documents are the insurance policy and payment receipts. Copies of the remaining papers substantiate the seller's demands. The buyer will only need a passport with Russian citizenship and a copy of the completed car purchase and sale agreement.
The contract with the insurance agent is subject to termination only if the owner of the vehicle changes (Article 10 of the Federal Law No. 40-FZ dated 04.25.02, clause 33.1 of Regulations No. 431-P dated 09.19.14).
Termination of the contract is preceded by several stages:
- The policyholder submits a written application for termination of civil liability insurance.
- The agent is provided with a copy of the purchase and sale agreement.
- Based on the received papers, the company employees cancel the previously concluded agreement.
- The seller is reimbursed for unused policy time.
- A commission is charged in the amount of 20-23% for legal support of termination of the insurance agreement.
In some cases, when selling a car, the previous owner can count on a decent amount of compensation. It is important to apply for early termination of the agreement in advance and find out if you can get a refund for unused time according to insurance.
The share of insurance compensation depends on when the documents are submitted (Article 10 of the Federal Law No. 40-FZ dated 04.25.02, clause 34 of Regulations No. 431-P dated 09.19.14). The date of termination of the document will coincide with the date of filing the application. Having visited the company’s office empty-handed, there is no point in expecting to receive funds.
You should definitely take the following documents with you:
- an application for the return of the amount for unused months of insurance (a sample will be provided by the insurer's inspector) indicating the reason;
- copy and original ID;
- OSAGO policy;
- vehicle purchase and sale agreement;
- receipts confirming payment of fees;
- certificate-invoice on deregistration of the vehicle (issued by traffic police officers);
- a copy and original of the technical passport for the car containing information about the change of owner;
- bank account details for funds transfer.
The insurer is given two weeks by regulations to transfer compensation payments.
In practice, the required amount is often issued from the company’s cash desk to the applicant within a few hours after submitting the relevant application. Funds transactions may take up to five business days. Of the amount calculated for payment, 23% is subject to withholding (Article 451 of the Civil Code of the Russian Federation).
They are spent as follows:
- 3% intended for a distributed control system - RSA;
- 20% go to cover the costs of paperwork, payment for the work of insurance company employees (in other words, the formation of an insurance reserve).
Interest deductions are not a whim of the insurance authorities, but a legislative norm (Decree of the Bank of Russia No. 3384-U dated September 19, 2014).
P = (SP – 23%) * (ND/12),
Where: P – premium compensation according to the contract,
SP – the price of the issued policy,
ND – unused days,
23% – formation of an insurance fund.
It is also worth considering the following points:
- All vehicle owners can apply for early termination of a contract with the MTPL insurance company, regardless of the reasons.
- The return of the paid insurance amount to the policyholder is provided only in the event of a change of owner of the vehicle, destruction of the car, or death of the owner.
- Long-term termination of the agreement leaves the coefficient unchanged.
Application for refund
Below is a sample application that is submitted to the insurance company for a refund of the amount for the unused period of the policy. Receipt of compensation payments under compulsory motor liability insurance when selling a car is regulated by Federal Law No. 40-FZ of April 25, 2002 and the Civil Code of the Russian Federation. The documents contain the rules and grounds for refunding funds. Consequently, the question of whether the money can be returned disappears by itself.
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Insurance is an irreplaceable document and an important part of the process of driving a car, allowing you not to worry about your financial situation in the event of an accident. However, it costs a very large amount, which is noticeable when calculating costs over a long period of time. Therefore, it is not surprising that many motorists want to return this amount when selling a car, when part of the insurance premium was not used. But is this possible? This is what this article will discuss.
What is OSAGO insurance?
OSAGO insurance is an agreement between the car owner and the insurance company. It involves a regular cash contribution from the motorist to the company, in exchange for which it will compensate for his financial losses in the event of an accident. Losses are paid for all insured events during the contract period.
In other words, the insurance is valid until the client has paid for it. But he suddenly sells his car, as a result of which he no longer needs compensation for the damage, there is nothing to compensate. In this case, he will want to return the overpayment for the remaining days of using the insurance.
In what cases can you get your money back?
It is possible to get a refund for the unused period of insurance. But you can’t just come and break the contract in the hope of getting a refund. There are only a few cases described in the contract when a refund of the amount followed by termination of the contract is possible. The owner of the car may terminate the contractual relationship with a subsequent refund of money for the unused period in the following cases:
It is also possible to return the amount if the insurance company goes bankrupt, but this option is unlikely. Based on these points, the car owner or a trusted person can submit a request to terminate the contract and further reimbursement of unused insurance funds.
To better familiarize yourself with the insurance conditions and refund cases, it is recommended to re-read the contract. It specifies all the cases in which the client can terminate the contract and demand the return of untouched funds. However, the set of necessary documents should be checked with the insurance company, because such information is not indicated in the contract.
Refundable amount
The amount to be refunded by the insurance company is calculated based on the unused insurance period. However, it is defined differently, depending on the cause. If the contract is terminated by the client, then the countdown of the returned days will begin from the day the application is submitted to the insurer. At the same time, the date of sale of the car to the insurance company is indifferent, because the sale does not cancel insurance services. The money will be returned only from the day the application is submitted.
Therefore, the sooner an application to terminate the contract and return the money is submitted, the more the insurance company will return. Do not hesitate to apply, this will significantly reduce the amount you receive.
Submitting an application and required documents
If you have sold your car, you must contact your insurance company with an application to terminate the contract for insurance services. This must be done quickly, because the refundable amount is calculated from the day the document is submitted. You also need to take with you the relevant documents, including:
Initially, you must provide the original OSAGO. It is better to attach a receipt for payment for services. All these documents must be returned to the insurer. It is better to take a passport as an identification document. Although some other documents are also suitable for returning insurance.
As for the document on the reason for the return of funds, when selling a car, there is enough paper confirming the fact of the transaction. If the vehicle is unsuitable for operation, a document is required confirming its disposal or impossibility of restoration. Upon the death of the owner, it is necessary to take a death certificate, as well as a document on the inheritance of the vehicle.
The last piece of paper is the account details to which the money for insurance will be transferred. Cash withdrawal is also possible, but this depends on the policy of the insurance company and the availability of sufficient cash at the cash register. You should get a statement of the details from the bank, which will protect the owner and the insurer from mistakes.
Advice! It is worth calling the insurance company and clarifying the list of documents required in your case. They often change this set, which depends on many factors.
The application must be submitted by the policyholder - the person who previously took out insurance for the vehicle. If he died, then his heir must do this, confirming his right with the appropriate document of inheritance.
As a result, they are obliged to accept the application if it was drawn up in accordance with the norms. The insurance company does not have the right to refuse to terminate the contract and return funds if the reason for this is within the limits permitted by the contract. Any disputes or delays in filing a claim are unacceptable, because this reduces the amount of insurance payment that the former owner of the car may require.
How will the refund be made?
Refunds for the unused period of insurance are made in cash or to the specified account. Often the payment is made directly to the account, which is more convenient for the insurer and allows you to avoid problems with documentation. Therefore, you should not expect a cash payment immediately after submitting your application. Here it is also worth considering the processing time of the application, which takes several days.
As for the acceptable payment deadlines for the submitted application (if it was drawn up correctly), the insurance company is obliged to return the amount for the unused insurance period within 14 days after the client submits the documents.
Important! It is worth considering that 23% is withdrawn from the refunded amount.
As for the 23% interest withheld from the refunded insurance amount, 3% goes to the RSA, and the rest forms the insurance reserve.
The payment process is not very fast and takes a certain period of time. You should not expect the promised amount in the first week after submitting the application; it is spent on reviewing the application and making a decision based on it. Specifying deadlines is also pointless; consultants are not able to provide such information to the client, since they themselves are not aware of it.
Do I need to terminate the contract when selling a car?
If this nuance has been discussed with the new owner, the contact for car insurance can not be terminated, but simply updated by changing the owner’s data. Thanks to this, the new owner does not need to overpay, drawing up a contract from scratch, and the old owner will receive the missing amount without deducting 23%. This is especially convenient when transferring a car to a relative, because you just need to contact the insurer with a statement.
Important! It is worth considering an important nuance - the accident-free coefficient. If the owner terminates the insurance contract, he will not be accrued this coefficient upon further conclusion of the contract.
If the sale is carried out to a stranger, it is still worth breaking the contract. Although it will take more time, the former owner will receive an official refund to the account without carrying out various frauds with changing the contract.
Thanks to these tips, you will be able to return money for the unused period of compulsory motor insurance when selling a car, as well as in other cases. Although this process takes time, it will allow you to recover a significant amount for the remaining days if the insurance service is no longer needed. However, this process has many pitfalls that should be taken into account when preparing and submitting documents, as well as waiting for a refund.
In any case, it is possible to get back the money spent on insurance. The motorist receives almost all the money for the unused period of insurance. But here you should remember about the timely submission of documents and the corresponding reason for termination, for which the company must return the remaining funds.
Insurance companies also often provide additional services when insuring a car. If they are no longer needed, the money for them can also be returned. More information about this can be found in this video:
In practice, cases when (or CASCO) the car owner no longer needs are far from rare. The most common example is when, at the time of selling the car, the insurance policy is valid for several more months. Surely some motorists have heard that in such a situation you can return part of the amount. Therefore, if the owner sold, how to get the money back for insurance is a question worth asking. However, only a few go to insurance companies to return funds. Perhaps the majority thinks that this procedure is long and tedious, and some do not even hope to get their hard-earned money back.
We hasten to reassure you: the process of returning money for compulsory motor insurance when selling a car is actually very simple.
According to Russian legislation, a motorist has every right to terminate the MTPL insurance contract early and receive back the amount for the unused policy period in several cases.
Such situations include a change in the owner of the car (the most common reason), as well as the death of the owner, revocation of the insurance company’s license and constructive loss of the car,
So you can get your insurance money back after selling your car. But for unknown reasons, many people do not care about this issue. This is especially surprising in light of the fact that the package of documents that needs to be collected is small.
If you want to get your money back after selling your car, you only need three documents:
- MTPL insurance policy;
- Your passport;
- a copy of the PTS with a note about the new owner or a purchase and sale agreement. Some insurers return money in cash from the cash register, but still, the majority transfer the required amount to the card. So be sure to bring a printed copy of your full bank details.
How long to wait for a refund and what to do if the money does not arrive on time
After selling your car, you should contact your insurer as quickly as possible. Remember: the refund amount is calculated from the day the application is submitted, not the day the car is sold. So if a client of an insurance company sells a car, he should immediately go to his insurer, because the sooner he writes a statement, the more money he will receive back.
If the insurance company does not provide for immediate payment of the amount in cash from the cash desk (and this usually happens), the insurer is obliged to transfer it to the client’s current account within 14 days from the moment the client writes an application to terminate the MTPL contract. As a rule, the amount is credited to the card before this deadline.
But what to do if after 2 weeks the money has not been transferred to you? Don’t delay; you need to contact your insurance company’s office right away. Then, perhaps, the employees will find out at what stage the payment was lost. It should be fairly noted that in large companies the procedure for terminating a contract is streamlined and there are usually no problems for the client. If you are met with complete indifference to your problem, feel free to go to the management of the company’s branch and threaten with legal proceedings.
The owner sold the car, he knows how to get the insurance money back, but how to calculate the amount?
As for the amount that should be returned to you, you can calculate it yourself. The refund amount is the cost of the policy minus 23%, multiplied by the number of months until the expiration of the MTPL policy. Where does this 23% come from? Let me explain: the insurance company deducts 3% from the MTPL agreement in the RSA. The remaining 20% is a fee for “doing business”: paperwork, employee salaries, and so on.
I would like to note that the termination of an MTPL agreement sometimes does not go smoothly. The reason lies in the presence of controversial issues in the legislation. However, the judicial system is increasingly taking the side of the policyholder in such cases. The fact is that most motorists do not even try to delve into the issue of termination, and are not interested in the possibility of obtaining a refund. However, remember: if the car owner has sold the car, how to get the insurance money back is an issue that he has the right to raise with his insurance company.