What Happens To My Insurance If I Sell My Car?
25 April 2022
Don’t forget about car insurance no matter where you are in the automobile selling process, whether you’re just thinking about it or about to give over the keys. Even if the automobile listed on your insurance changes, you’ll probably be able to maintain your current coverage, but there are a few things to keep in mind.
It would help guarantee that the ongoing car insurance coverage is transferred to the new owner when you sell your automobile. It’s critical to ensure that the automobile insurance coverage is moved from the prior owner’s name to the new owner’s. After collecting all of the vehicle’s documentation, the buyer of a used automobile should immediately begin the insurance transfer process.
Is It Necessary To Cancel Car Insurance If I Sell My Vehicle?
No. In reality, if the vehicle is still registered in your name, you must retain your auto insurance. However, if you possess a registered car but don’t have insurance, you might face penalties or a licence suspension even if you aren’t driving.
If you cancel car insurance, you’ll have a gap in coverage, resulting in higher premiums in the future. So, for example, if you’re buying a new car, you may call your insurance carrier to add your new automobile to your current range. If you aren’t planning on purchasing a new vehicle straight immediately, you may consider switching to non-owner insurance in the meantime.
Important Information To Know
- If you sell your car, it’s your responsibility to cancel car insurance when the ownership changes hands. After you sign a bill of sale, your automobile insurance won’t cover the new owner.
- If you don’t terminate your coverage on a car you’ve already sold, the car insurance company will refuse any claims since the new owner should have their insurance to cover the loss.
- You can request that your policy be stopped when you sell your only car so that you can save your loyalty discount and insurance history.
- Keep your insurance current if you plan to buy a replacement automobile within a few days, and the coverage will automatically protect you for up to 14 days when you buy the new car.
The Bottom Line
The buyer can handle the car insurance transfer process through the insurance company to wrap up things. The liability portion of the policy is considered to be transferred automatically. However, once the procedure is moved in the new owner’s name, the own damage coverage is no longer applicable.
This implies that if the vehicle is found to be at fault for causing harm to a third party, the latter will be entitled to compensation. But on the other hand, the new owner will be unable to file any personal claim since it would be declared illegitimate.