Selling a car is not just about handing over the keys to the new owner, but also completing a number of legal procedures that are often forgotten. One of these important issues is the fate of the insurance policies in force at the time of the transaction. Many drivers mistakenly believe that the policy automatically expires or is transferred to the buyer along with the car, but the law allows you to return part of the money paid.
The amount of the refunded amount directly depends on the type of insurance, the terms of the contract and the time remaining until its expiration. Unlike some other financial transactions, there are clear calculation rules, which, if ignored, could cost you tens of thousands of rubles.
In this article we will look in detail at how to correctly process a refund under CASCO and MTPL, what documents will be required and within what time frame you need to contact the insurance company.
Legal basis for return upon change of ownership
The legislation of the Russian Federation clearly regulates the relationship between the insurer and the policyholder, especially when the rights to the insured property change. The main document regulating this process is the Civil Code of the Russian Federation, as well as special laws on compulsory and voluntary insurance.
The key point is that when the car is sold, the insurance contract does not automatically terminate, but the policyholder has the right to terminate it. Insurance premium is returned in proportion to the time during which the contract was not in effect if the risk of an insured event has disappeared due to circumstances other than insurance.
It is important to distinguish between two main types of policies: compulsory (MTPL) and voluntary (CASCO), since the mechanisms for their return have significant differences. For compulsory motor liability insurance, the rules are more stringent and unified by the state, while the conditions for the return of CASCO depend on the rules of the specific insurance company and the clauses of the signed contract.
⚠️ Attention: The right to a refund of part of the premium arises only if you are the owner of the policy and it is you who initiate the sale process. If the car is sold under a general power of attorney, the money will not be returned.
The deadline within which you must submit your application also plays an important role. Although the law does not set a hard limit on the days to file a claim after the sale, delaying the process can lead to difficulties in proving the date of termination of ownership of the car.
What does the law say about the "cooling off period"?
The 14 day cooling off period applies primarily to new insurance contracts or life insurance. In the case of selling a car, the return is calculated based on the remaining term of the policy, regardless of when the policy was purchased, provided the ownership has officially changed.
Refund of funds under the MTPL policy
The situation with compulsory civil liability insurance for vehicle owners is the most common. According to the law, when a car is sold, the MTPL policy is not transferred to the new owner; he must take out his own.
The previous owner has every right to terminate the contract and return the money for the unused period. The calculation is made based on the number of full months remaining until the end of the policy. The annual rate is divided into 12 months, and the cost of full months is returned to the client.
- 📄 Prepare the original OSAGO policy (if it is on paper).
- 🤝 Provide a copy of the purchase and sale agreement (SPA) or a certificate-invoice.
- 🆔 Take with you the policyholder’s passport and documents for the car (PTS/STS with a sales mark).
- 💳 Have your bank account details with you to transfer funds.
It is worth noting that 25% of the amount that goes to the Russian Union of Auto Insurers (RUA) to cover administrative costs and maintain registers is non-refundable. This is a fixed portion and is not refundable under any circumstances.
The return process in the case of compulsory motor liability insurance is usually faster than for voluntary types of insurance, since the rates and rules here are strictly regulated by the state and do not depend on the internal policy of the company.
Features of return under CASCO policy
Voluntary CASCO insurance offers more flexible, but also more complex return conditions. It all depends on what is stated in the insurance rules of a particular company. Some policies provide
Unlike MTPL, where calculations are carried out in full months, CASCO often uses daily calculations. This may or may not be beneficial for the client, depending on the remaining term. In addition, many companies may charge an early termination penalty if the policy has been in force for less than a year or half the term.
If payments have already been made under the CASCO policy during the current insurance period, the probability of returning the remaining portion of the premium tends to zero. Insurance companies consider such cases as exhaustion of the liability limit.
⚠️ Attention: Carefully study the section “Termination of the contract” in your CASCO rules. Some companies set a minimum policy period (for example, 6 months) before a refund is possible.
To apply for a refund, you must write an application in free form or according to the insurance company’s sample. The application is accompanied by the same documents as for compulsory motor liability insurance, plus sometimes an act of sale of the car is required.
☑️ Documents for CASCO return
Calculating the refund amount: formulas and examples
Understanding how the insurance company calculates the refund amount will help you avoid mistakes and check that the charges are correct. The calculation formula for compulsory motor liability insurance is quite simple and transparent.
For compulsory motor liability insurance, the following logic is used: 23% is subtracted from the total cost of the policy (77% is returned), then the resulting amount is divided by 12 months and multiplied by the number of full months until the end of the policy. The remaining days of less than a month are burned out.
In the case of CASCO, calculations can be carried out on a daily basis. Interest for the time that has already passed (often taking into account the risk coefficient for different months of the year) and possibly a termination fee is deducted from the total amount. The remaining amount is returned to the client.
| Parameter | OSAGO | CASCO |
|---|---|---|
| Unit of calculation | Full months | Days (usually) |
| Non-refundable part | 23% (fixed) | Depends on the rules (0-30%) |
| Payment term | Up to 14 days | Up to 30-45 days |
| Dependency on payments | Does not affect | Critical (often 0) |
It is important to consider that Only part of the premium corresponding to the period starting from the day following the date of filing a written application for termination of the contract is subject to refund. Therefore, it makes no sense to delay submitting documents after selling the car.
Keep a copy of the termination notice with the insurance company's note of acceptance. This is your main document in case of disputes about the timing of refunds.
Step-by-step instructions for selling
To be sure to get your money back, you should act consistently and document each step. Chaotic actions can lead to refusal or significant delay of payments.
The first step immediately after signing the purchase and sale agreement is to collect a package of documents. Do not wait until the buyer registers the car - this is not required to terminate the insurance contract; the fact of sale is sufficient.
- Collect a complete package of originals and copies of documents (passport, PTS, DCP, policy, receipts).
- Visit the insurance company's office or send documents by registered mail with notification.
- Write an application for a refund of the insurance premium, indicating current details.
- Receive a copy of the application with the incoming number or the tracking number of the postal item.
- Expect funds to arrive in your account within the period established by law or contract.
If you send documents by mail, be sure to make an inventory of the attachment. This will protect you from a situation where the insurance company claims that it received an envelope without attachments or with an incomplete package of documents.
The fastest way to get your money back is a personal visit to the central office of the insurance company with a full package of original documents.
Common mistakes and ways to avoid them
Many car owners make typical mistakes that ruin all attempts to get their money back. One of the most common is the sale of a car along with a policy “in addition”.
If the purchase and sale agreement states that the policy is transferred to the new owner, or you simply gave him the documents for the policy without notifying the insurance company, it will be extremely difficult to get the money back. The insurance company will consider that the risk has not ceased, but the owner has changed.
Another mistake is incorrectly specifying the details for the transfer. Make sure the account is in the name of the applicant (policyholder). A transfer to a spouse's or relative's card may be blocked by the company's security service.
⚠️ Attention: Do not agree to the insurance company’s offer to “reissue” the policy for a new car instead of returning the money if you are not satisfied with the terms of the new policy. You have the right to a return of real money.
You should also be careful with electronic policies. Make sure you have the ability to download and print them or provide them electronically, as losing access to your personal account can complicate the process.
What to do if the insurance company refuses to refund
Despite the clarity of the legislation, insurance companies sometimes try to refuse payment, hoping that clients are legally illiterate. The refusal may be motivated by loss of the policy, expiration of terms or internal rules.
First of all, require a written reasoned refusal. Often, already at the stage of requesting an official response, company employees understand the seriousness of your intentions and find an opportunity to pay the funds.
If a written refusal is received or there is no response within 30 days, the next step is a complaint to the Central Bank of the Russian Federation. This is a regulatory body that strictly controls the activities of insurers. A complaint can be submitted online through the reception desk of the Central Bank of the Russian Federation.
As a last resort, if the amount is significant (which is important for CASCO), it makes sense to go to court. Judicial practice in such matters is overwhelmingly on the side of the consumer, and you will also be able to recover a fine of 50% of the amount and a penalty.
Is it possible to return insurance if the car is sold under a general power of attorney?
No, you can't. A general power of attorney is not a document on the transfer of ownership. Legally, you remain the owner, and the risk does not stop. Returns are possible only after official deregistration or sale under a sales contract.
How long does it take for the insurance company to return the money?
According to the law (for compulsory motor liability insurance), the period is 14 calendar days from the date of receipt of the full package of documents. For CASCO, the terms are regulated by insurance rules, but usually do not exceed 30-45 days.
Do I need to submit license plates to insurance?
No, license plates are submitted to the traffic police upon deregistration (if required in your case). Only copies of documents confirming the sale or deregistration are provided to the insurance company.
What to do if the policy is lost?
It is necessary to write a statement about the loss of the policy to the insurance company. In some cases, a police certificate may be required, but more often a written explanation is sufficient. This is not a basis for refusing a refund.
Will the money be returned if there is less than a month left until the end of the policy?
For MTPL - no, since the payment is made in full months, and the balance less than a month expires. For CASCO insurance, it is possible if the calculation is carried out on a daily basis and the refund amount exceeds the minimum threshold established by the company’s rules.