How to terminate an MTPL agreement and get your money back in 2021: step-by-step instructions for policyholders

When to terminate the MTPL agreement

All cases and circumstances under which a contract concluded in accordance with all the rules can be terminated are set out in the Rules of motor third party liability insurance.

Termination of the contract at the initiative of the policyholder and return of previously paid funds are possible in the following cases:

1. The vehicle was sold and changed owners, and the purchase and sale took place directly from the seller to the buyer without the involvement of third parties and a general power of attorney.
2. There was an accident in which the vehicle became completely unusable (died). Or for some other reason the owner decided to dispose of it.
3. The insured (owner) of the vehicle died.

Another case when the insurer is obliged to return money to the client is in the event of its own bankruptcy or revocation (suspension) of the license. However, as practice shows, it is extremely difficult to get your money back under such circumstances.

If any of the grounds for termination of the contract occurs, the policyholder has the right to count on the return of that part of the insurance premium that falls on the remaining period (according to clause 34 of the OSAGO Rules). Let's say the policy is valid for only 6 months, of which 2 have already passed. The policyholder can return the money for the remaining 4 months. In this case, another 23% must be subtracted from the amount obtained through simple calculations.

Funds are distributed as follows:

• 20% is compensation for the insurer’s expenses;
• 3% are transferred to the fund of the Union of Russian Insurers.

Documents required for early termination of compulsory motor liability insurance

Before prematurely terminating your car license, you will need to collect some documents. Depending on the reason for termination of cooperation, the list of some papers may change.

But you will definitely need:

• check for regular payments;
• compulsory motor vehicle liability insurance (original);
• document on the sale of the car;
• passport.

Depending on the situation, you may need a disposal certificate, a copy of the death certificate, or a document confirming entry into the inheritance. Some companies may request a passport for a car with confirmation of the new owner (if the reason for the early termination of the “motor citizen” was the sale of the vehicle). When the insurance company does not provide for payments directly in cash, a copy of the savings book with current account details may be required.

If compulsory insurance is no longer necessary, terminating the agreement and refunding the funds is not always the most prudent decision. There are situations when it is better to leave insurance. For example, if the policy expires in a few weeks, it is better not to terminate the auto insurance policy. Although unused funds will not be returned, you can receive a full KBM, which will give you the opportunity to take advantage of the discount when applying for your next compulsory motor liability insurance. Although KBM is awarded for driving without accidents, bonuses are calculated when the year has completely expired. If the contract is terminated ahead of time, the coefficient will remain the same.

When is payment refusal possible?

There are situations when the policyholder cannot count on a refund of the insurance premium.

These include cases when:

1. The legal entity that acted as an insurer ceased to exist.
2. The policyholder independently decides to terminate the contract, and the reason is not the liquidation of the insurer or the sale of the vehicle.
3. The insurance company discovered forgery or false information in the documents submitted when signing the insurance contract.

Due payment

The insured client is obliged to receive payments remaining until the end of the insurance period.

Moreover, this period is counted from the moment the application from the motorist is received by the company where the policy was purchased. The time of actual cancellation of the contract does not play a role here.

The amount payable is determined as the unspent insurance premium minus 23%.

These percentages go towards reimbursement of expenses for terminating the insurance business (20%) and mandatory deductions to the RSA (3%).

Reference. Many motorists managed to return the deducted interest through the courts, but after the adoption of amendments to the Law and Rules on Compulsory Motor Liability Insurance, this is almost impossible to achieve.

In case of cash payment, the citizen receives the money on the same day. With non-cash payment, the waiting period for the debt increases to 14 days.

If during the insurance period the company made payments for insured events, this will not in any way affect the remaining value of the policy after its early closure.

Failure to receive the required money gives reason to contact the head office of the insurance company with documents and a copy of the submitted application to clarify the circumstances. If the campaign does not produce positive results, then contacting the Union of Russian Insurers, an organization that regulates the activities of insurance companies, will help.

But there are cases when payment of the remaining money is not provided:

1. the policy is closed at the request of the client for a reason not included in the main list of reasons for termination of the contract;
2. the insurer ceased to exist;
3. The insurer discovered false information about the client and his vehicle.

Thus, being clearly aware of their rights and knowing the process of stopping the MTPL agreement, the policy buyer can cancel the contract with the least time and financial losses, and in case of problems with the organization, defend their case in higher organizations.

How to terminate early

According to current Russian legislation, termination of compulsory motor liability insurance should be simple. It is necessary to contact the insurance company and submit an application for termination.

But as practice shows, if you do not follow the established procedure and make mistakes, you can face unpleasant consequences.

Deadline for contacting an insurance company

It is very important to understand that the sooner an application is submitted to the insurance company, the more funds the client will be able to return upon termination of the policy. The refund amount will be calculated from the date of application.

For example, when selling a car, you should contact the insurer immediately after signing the bill of sale. He will only consider the fact that the car was sold, but not the date of signing the sales contract. However, this only applies to the fact of purchase and sale.

If we are talking about the death of the policyholder or the loss of a vehicle as a result of a traffic accident, the starting date will be the date of issuance of the death certificate or the date of registration of the accident in the traffic police.

List of required documents

Main documents that will be needed:

• original policy;
• application for termination of the contract.

Application forms are usually standardized by each individual company. They can be requested on the official website or at any branch.

However, in addition to these two documents, you will also need other papers. You can find out the full list of required documents from the insurance company.

Required documents should include:

• policyholder's passport;
• original policy;
• power of attorney, if it is not he personally, but a trusted person, for example, a lawyer;
• original and copy of death certificate if the policyholder has died;
• payment documents confirming the fact of payment for the policy;
• bank account details for which the insurer must refund the money.

The reason why the policyholder terminates the insurance contract must be confirmed by the relevant document.

Must be provided:

• upon the death of the policyholder, in addition to a certificate of this, his heirs must go through the procedure of submitting to a notary a statement of intention to accept the inheritance and receive a certificate of the right to inheritance, which is also submitted to the insurer;
• If the car is destroyed, the owner must provide a certificate of deregistration with the State Traffic Safety Inspectorate, or a certificate of its disposal.
• When a car is stolen, a certificate of theft is presented.
• If the car was lost in an accident, an official expert report on the death will be required;
• When a car owner is deprived of a driver's license by a court decision, this decision must be presented.

Without these documents, a refund is not possible.

How to write an application

Although each insurance company has its own application form for termination of the compulsory motor liability insurance contract, they must indicate the same standard information.

Namely:

1. Name of the legal entity to which the application is sent.
2. Passport details of the applicant (policyholder).
3. Policy details
4. The reason that prompted the termination of compulsory motor liability insurance.
5. Method of receiving the insurance premium (cash, transfer to a specified bank account). You can choose to deposit funds into the account of another insurer under the new policy.
6. List of attached documents.

It is noteworthy that the application must be marked with the date of application, as well as the signature of not only the applicant, but also the representative of the insurance company that accepted it. The date of acceptance may also be indicated, preferably the same as the date of preparation.

The best option for sending documents is to personally go to the representative office of the insurance company. However, you can also use the services of Russian Post. Then the policyholder needs to send a registered letter with a list of the contents and a notification of delivery. This method is suitable for those clients whose insurance company refused to accept an application for any reason.

How to calculate the refund amount for early termination of compulsory motor liability insurance?

The law states that in case of premature termination of the agreement, in cases provided for by the rules of car insurance, the insurer returns to the insured part of the money in the amount of money intended for insurance payments and attributable to the remaining period of validity of the document or the unexpired period of seasonal use of the car.

That is, only part of the funds intended for payments is returned. This amount is commensurate with the remaining term of the agreement.

According to the requirements established by the Bank of the Russian Federation, only 77% of its cost is intended to ensure compensation for insurance. And 23% are designated for other purposes, and it will not be possible to return them in any case.

To calculate the remaining amount, first of all, you will need to determine the date of premature termination of the policy:

1. In the event of the owner's death, this is the day of his death.
2. If the company has been liquidated, the date of liquidation.
3. In case of a complete structural failure of the car - the day of the accident when the car was damaged.
4. If the company's license is revoked, the date the company received the application.
5. When selling a vehicle - the day the insurer receives the application.

Once the contract completion date has been determined, you can calculate how many days are left for the act to be valid and how much money can be withdrawn. For example, if the insurance will still work for ninety days, and it was concluded for a year, then you can return 24.6% (90:365≈24.6%) of the original cost. But since 23% is also not returned, in the end you can only get 18% (24.6% × 0.77≈18.9%).

When the agreement was not concluded for a whole year, the payment will be calculated a little differently. For example, when there are still one hundred days left, and the document was concluded for only four months (for example, from May to August), then the finances to be returned will be calculated as follows: 100 / (31 + 30 + 31 + 31) = 81.3 %. And taking into account the non-refundable 23%, the final payment will be 62.6%.

The procedure for terminating compulsory motor liability insurance when selling a vehicle

https://youtu.be/clOH0e0IoqA

In fact, selling a vehicle is a procedure for changing ownership.

Wherein:

• the parties sign a purchase and sale agreement;
• The owner of the vehicle is re-registered.

The refund of the insurance premium for motor vehicle insurance occurs in accordance with clause 1.14 of the OSAGO Rules. The insurance organization must present the original bill of sale, as well as a copy of it. Additionally, you may be asked to present a copy of the PTS, which will already indicate the new owner of the vehicle. But this condition is not mandatory, so the policyholder has the right to refuse to fulfill it.

If the requirement for a title with a new owner is the basis for refusal to accept the application for termination, then a written refusal should be required. With this document you can safely go to court. There are precedents for winning cases of this kind in our country.

If the insurer does not have any questions for the client, then after submitting the application and other documents, the money is transferred to the specified bank account within the established time frame.

But the policyholder himself should remember that in case of early termination of the auto insurance policy, this period will not be included in the MSC.

In what cases are money not returned in case of early termination of compulsory motor liability insurance?

It is possible to return (partially) the amount in case of premature termination of insurance in most precedents. But there are options when it will not be possible to withdraw funds.

Refunds will not be possible in the following situations:

1. When the owner of the vehicle provided false information about himself and the car. It is not uncommon for drivers to resort to such fraud in order to reduce the cost of insurance. If the company reveals the fact of unfair cooperation, it prematurely terminates the contract without the right to return funds.
2. When compulsory insurance is paid in installments and the next installment has not been made.
3. When the owner wants to cancel the insurance due to the fact that he does not plan to use the car for a long time. In this option, it is possible to terminate the agreement prematurely, but it is unlikely that you will be able to withdraw the money.
4. When the insurance company went bankrupt. Since the company is considered insolvent, it is not possible to collect the remaining amount.

How to terminate an MTPL agreement and get your money back

To obtain a refund of previously paid insurance premium, you must contact the insurer. No other organization is obliged to return the insurance premium paid as payment.

Payment between the company and the client can occur in cash or non-cash form. The basis for a return is an application and supporting documents.

How to calculate the refund amount

The formula for calculating the refund amount raises the most questions. It is quite simple and is contained in the new MTPL Rules.

Here Svozvr is the amount that the insurer will return to the client.

23% will be deducted in any case. If previously there were precedents for won lawsuits about the illegality of withholding 23%, then after the latest amendments to the legislation it is impossible to return this part even through the court.

How and when does a refund occur?

The insurance premium will be refunded in the form requested by the applicant when submitting the application. Can choose:

• cash payment, then the insurer will call you and tell you what day and time you can come to the office to receive the full amount at its cash desk;
• non-cash payment will be made directly to the bank details specified in the application.

In both cases, the same deadlines must be observed - 14 days from the date of acceptance of the application by the insurance company.

Who gets paid

Refunds under a terminated MTPL agreement are made to the policyholder himself, a trustee or heirs.

The authorized representative can completely take over the procedure for communicating with the insurer or only receive a refund from the company.

When it comes to the return of the paid insurance premium to the heirs of the policyholder after his death, they will receive the entire amount only by confirming their right to inheritance. To do this, they need to present the appropriate certificate.

How is the contract terminated?

Procedures for canceling a transaction under compulsory motor liability insurance vary depending on the circumstances.

When selling a car

A transport unit can be transferred under a purchase or sale transaction, exchange or gift to another person; here the MTPL policy does not protect the new owner, and the former owner can apply to terminate his protection.

The policyholder can cancel the MTPL agreement in connection with this case only after the purchase and sale transaction itself has been completed. Then the required documents are immediately collected:

1. passport or other identity document;
2. original agreement with the company;
3. receipt for payment of the cost of the policy;
4. transport transfer agreement;
5. in some cases, a vehicle passport with information about the new owner included;
6. sometimes - the current account number for transferring money if the company does not return the money in cash.

Attention! It is best to clarify the necessary documents before going to the insurance company by calling the employees or information on the organization’s website.

Then the citizen’s application will be immediately accepted, and this date will be the starting point for calculating the financial resources to be returned to the former owner.

Early at the initiative of the policyholder

In life, situations arise when a car owner decides not to drive a car yet or leaves for a long time, and the vehicle remains unclaimed, or the insurance company performs its duties improperly.

Then the client decides to close the MTPL policy.

Insurance companies do not aim to lose their clients, so it is very difficult to terminate a contract for reasons not included in the main list of its termination, and at the same time receive money for unused months.

In this case, the MTPL rules provide for the insurer's right not to return money for the unused period , therefore, if possible, it is more profitable for the policyholder to leave the current MTPL policy and at the end of the insured period receive a good characteristic, which makes it possible to obtain the next policy at a lower price.

Cancellation of additional insurance

In practice, there are cases when a citizen inattentively reads the MTPL contract, and it may indicate consent to additional insurance, for example, for the risk of harm to life, which increases the price of insurance by at least a thousand rubles.

Or a company employee persistently imposes a comprehensive insurance contract, and the client succumbs to influence.

If, nevertheless, it was drawn up, then it can be abandoned even after the conclusion of an agreement on compulsory motor liability insurance. In this case, the entire contract is canceled and a new one is drawn up, which does not include additional insurance.

Important! Additional insurance is not mandatory and is issued only with the consent of the policyholder.

To do this, it is necessary to draw up a competent application for refusal of such a compulsory motor liability insurance policy. It must state:

• to whom and from whom the application is drawn up;
• the essence of the transaction in which the policy buyer was not informed about additional services or they were presented as mandatory;
• on laws that protect citizens from purchasing goods and services that they do not need at the moment (Law “On the Protection of Consumer Rights”, paragraph 2 of Article 16);
• about the desire to terminate the agreement and return the amount paid for the policy;
• list of attached documents;
• date of preparation of this application.

A signature is placed and this written request, together with the attached papers, is given to an employee of the company, who cancels the agreement after reading them, as is customary, on the same working day.

If the company refuses to cancel the transaction, you should report this to its central office. If this does not help, then notify the Russian Insurance Association or file a lawsuit.

Read more about what to do if additional insurance is imposed on you here.

How to terminate an electronic MTPL policy

With the advent of electronic policies, clients have questions: what is the difference between the return procedures and how to terminate the electronic MTPL policy.

Let us immediately note that there are no differences in the procedures. Despite the fact that the policy itself can be purchased online and presented wherever required, you can only terminate an electronic MTPL policy at the insurer’s office.

This procedure cannot be completed online. The current rules do not provide for virtual termination of e-MTPL.

e-OSAGO. When there is no need to terminate the contract

In the last year of quarantine measures and the pandemic, the service of obtaining electronic insurance online has become popular.

How does an electronic MTPL agreement differ from one concluded in an office?

Electronic MTPL is similar to the paper one issued in the office and has the same legal force. This policy can be issued without leaving home; the car owner does not need to think about maintaining social distance in queues and waste time waiting.

Which MTPL should you choose: electronic or paper?

An electronic policy is issued quickly, and its purchase has important advantages for car owners. For example, no overpayment for additional imposed services.

How to buy MTPL online cheaper - discount on insurance

List of documents for registration of e-OSAGO

• Identity card of the person for whom the policy is issued;
• Identity card of the person in whose name the vehicle is registered;
• Vehicle registration certificate;
• PTS;
• A paper indicating that the car has passed diagnostics;
• Certificates of all drivers who will be included in the policy.

What to do if there is no return

The first thing that should be done after the expiration of the due date after filing an application for termination of the MTPL insurance contract and in the absence of a return is to request clarification from the insurer.

Proceed step by step:

1. First, you should call the insurance company.
2. If there is no response, we recommend going to the office in person.
3. Demand an explanation. The refusal must be motivated. The client must be explained why the money was not returned. For example, there are not enough documents. However, if the application was accepted, then if there are grounds listed in the law, there should be no delays.
4. From the company’s office, taking a copy of the application with you, you should go to the local representative office of the Russian Union of Insurers. It is he who is involved in resolving such disputes.
5. If they don’t help there, you should go to court.

For each day of delay in excess of the 14 days allotted by law, the insurer will be obliged to pay a penalty in the amount of 0.1% of the amount specified in the application.

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How is the amount of insurance compensation determined?

In the event of termination of the insurance contract, the insurance premium is returned to the car owner in proportion to the days that were not used under the MTPL policy and minus 23% from the day that followed the date of preliminary termination of the policy.

It is the retention of 23% that causes quite heated debate among car owners from the moment compulsory insurance was introduced in Russia. From the position of the insurance company, withholding 23% is legal, otherwise it suffers losses (since the company will bear these costs regardless of whether the driver terminates the contract early). The structure of the MTPL insurance tariff can be divided into the following components:

• 77% — this is a net rate (a certain part of it goes to payments to the car owner);
• 20% — these are the costs of the insurance company for conducting business, maintaining the policy, equipment, forms, salaries, etc.;
• 3% — these are contributions to the RSA for the formation of reserves (2% for the reserve of current compensation and 1% for the reserve of guarantees).

But some particularly principled car owners managed to get that same 23% back, since the Civil Code and the rules of OSAGO do not contain an indication of the mandatory withholding of this amount.

So, in Art. 958 of the Civil Code of the Russian Federation only says that the insurer has the right to receive back part of the paid insurance premium in proportion to the time he used the insurance contract. Clause 1.16 of the OSAGO Rules indicates the possibility of returning the insurance premium for the unexpired period of the contract.

In some cases, policyholders had to go to court to protect their interests and return 23% ; in others, they were returned the money after transferring the complaint to the RSA or the claim to the insurance company.

If the insurance company underestimates the amount to be refunded, citing the fact that the policyholder received payments under compulsory motor liability insurance, then its actions are not legal.

Conclude a compulsory motor liability insurance agreement that you won’t have to terminate

We have already listed the difficulties that a motorist who has signed an agreement with an insurance company may encounter. What is needed in order not to face the problem of license revocation or improper performance of services by the insurer?

It is important not to make a mistake in choosing an insurer. After all, you will be bound by contractual relations for a whole year. Our service cooperates with the largest solvent insurers in Russia, who are in the TOP customer ratings.

Which MTPL insurance is cheaper: 2021 rating

When choosing insurance companies for cooperation, we are based on expert reliability ratings. Professionals analyze the most important indicators of the insurer and, based on the results of the analysis, give the company a rating. This assessment shows how long the company is able to exist on the market and compensate for the damage caused if necessary.

Choose the best insurance companies, because insurance is your protection in case of unforeseen circumstances.

Is it possible to terminate compulsory motor liability insurance early?

Before understanding financial issues, it is important to understand in what cases you can cancel a compulsory motor liability insurance agreement. Even in the Decree of the Government of the Russian Federation No. 263, as amended. dated August 26, 2013, cases of early termination of the insurance contract were listed:

• physical death of the policyholder;
• liquidation of the legal entity that insured the vehicle;
• liquidation of the insurer's organization;
• loss of the vehicle specified in the contract;
• other cases provided for by law.

Valid reasons for early termination of the contract

The objective reasons for breaking the agreement are listed above. However, early termination of the MTPL contract is possible at the initiative of the policyholder. Such cases are fully permitted by law:

• in connection with the sale and subsequent re-registration of the car, since the owner – the person who signed the contract – changes;
• at any time on the vehicle owner’s own initiative, as stated in Art. 958 Civil Code.

If an insurer loses its license, goes bankrupt or is under investigation, it objectively cannot fulfill its obligations. In these cases, the agreement can be terminated on the basis of clause 1.14 of Bank of Russia Regulation No. 431-P dated September 19, 2014.

It should be noted that for the insurer the policy loses its relevance after an accident, if the car cannot be restored, or is stolen. In addition, it is not excluded that the contract may be terminated at the initiative of the insurance company if violations are detected on the part of the policyholder - provision of false or incomplete information that affects the determination of the degree of insurance risk.

Many car owners are interested in whether it is possible to terminate an electronic policy. In the legal aspect, there is no difference between an electronic contract and a paper contract.

Deadlines and costs

If the driver has collected and submitted a complete package of documents, then the insurance company must return the money for termination of both the MTPL policy and additional insurance within 14 days from the date of filing the application.

If this does not happen, then 1% of the refund amount is automatically charged in favor of the policyholder. 23% is included in the calculation of the balance of the MTPL policy . These funds are used to pay for the services of the insurance company and the contribution to the Union of Russian Insurers. This 23% will definitely be withheld from the amount that will be returned to you upon termination of the contract (see the article above for the procedure for calculating the balance of funds).

How is the compensation amount calculated?

It is worth noting that, by law, insurance companies withhold 23% of the cost of insurance - this is the insurer’s commission for providing their services to the policyholder. To calculate compensation for termination of a contract, you must use a special calculation formula:

D = (P – 23%) * (N/12) where:

• D – amount of compensation;
• P – cost of compulsory motor liability insurance at the time of its registration;
• N – time remaining until the expiration of the policy (number of months).

Here is an example of calculating the amount of compensation:

The cost of compulsory motor liability insurance is 7560 rubles, until the end of the period – 4 months, we get the following:

(7560-23%)*(4/12) = 578 rubles - this is the amount that must be returned for insurance as compensation.