The MTPL policy is a mandatory document that the car owner must have. Without it, you will not be able to register your car with the traffic police or drive on the roads without breaking the law. At the first check of documents, a driver without a policy will be fined, and therefore, probably every car owner is aware of the need to obtain one in advance.
But few people know that a car insurance contract can be terminated early and even demand back the money paid by the insurance company. In what cases can this be done? How to correctly file a claim for a refund when selling a car? And how much should you expect? FAN journalist asked these questions to insurance expert Andrey Trostin .
Photo from the personal archive of Andrey Trostin /
Grounds for termination of an insurance contract
You can terminate the MTPL insurance contract at any time. The agreement of the parties, although within the framework of compulsory insurance, is not at all a compulsory event. The policyholder has the right to choose which insurer to sign papers with and to whom to pay the money. In the same way, he can decide to break off the “cooperation”, but one should not always count on a refund.
“The owner’s desire to simply terminate the contract for personal reasons is feasible,” comments Trostin. “But in this case, the insurance company is not obliged to return the funds. Also, money will not be returned if the policyholder, when signing the contract, provided incorrect information about the car or himself, that is, there are signs of fraud.”
According to the law, you can demand money back only under the following circumstances:
• the car is sold or disposed of - that is, there is no longer a need for insurance; • the owner of the car died before the expiration of the policy.
If the car was sold before the expiration of the policy, the policyholder has grounds to contact the insurer with a request for a refund. To do this, it is necessary to initiate early termination of the contract.
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Who can apply
Only its owner or the persons specified in the contract as heirs can cancel an AlfaStrakhovanie car policy. In other words, if the policyholder dies, his relatives also have the right to apply to the insurance company for a refund of the premium paid.
Reference. In exceptional cases, if appropriate documents are available, his legal representative may act on behalf of the policyholder.
If the policyholder does not have the opportunity to visit the AlfaStrakhovanie office in person, it is recommended to fill out an application, attach all copies of documents and send them by mail. The starting date for the return of the premium will be the day the letter was sent (it must coincide with the date of the application).
How is early termination of an MTPL policy carried out when selling a car?
To return the money, you must submit an application for termination of the MTPL contract and a package of documents to your insurance company. According to insurance expert Andrey Trostin, you should prepare: • the MTPL policy itself and a receipt for its payment; • the policyholder's passport, and if a relative or other authorized person applies instead - a notarized power of attorney; • car purchase and sale agreement, which serves as the basis for termination of insurance; as an alternative, a certificate-invoice is suitable, and if the car was disposed of, it is necessary to attach a disposal certificate; • details of the bank and account of the policyholder, where the insurance company must transfer the money.
“After receiving the documents, the company is obliged to transfer funds within 14 calendar days,” clarifies Andrey Trostin.
The practice of total inspections
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At the VSK Insurance House, a system of random checking of compulsory motor liability insurance policies for compliance with the information specified in the policy/insurance application has been operating since 2021.
“The frequency of contract terminations is sporadic. Such cases are mainly associated with distortions in the specified category/type of vehicle, as well as with underestimation of power and information about the territory of primary use,” said a representative of the insurance company. “To avoid termination of the contract, it is necessary to carefully fill out the documents, and when using the services of an intermediary, be careful about their choice.”
AlfaStrakhovanie reported that on average only 1–2% of the total number of e-OSAGO contracts concluded per month are terminated due to false information.
There was an error
Photo: TASS/Dmitry Serebryakov
“This indicator is achieved through a thorough check of data when concluding contracts and explanatory work with partners and agents in the company’s press service. — Inspections have been carried out in automated mode since the summer of 2020. Their goal is to identify cases where policyholders deliberately underestimate the size of the insurance premium for compulsory motor liability insurance.”
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The insurer also assured that erroneous terminations of policies with bona fide policyholders are rare and are considered on an individual basis.
How much can you get back for compulsory motor liability insurance after selling the car?
You should not count on a refund of the entire amount that was paid by the policyholder when purchasing the policy. In the field of compulsory insurance, there is no “cooling off period”, which allows you to terminate the contract within 14 days and demand back the entire amount paid, down to the penny. Even if the policyholder initiates termination of the agreement within the first month after purchasing MTPL, he will receive only part of the funds.
“When MTPL is terminated, not the entire amount is returned, but part of it,” comments Trostin. “It is equal to the share intended for insurance compensation for the period of the contract that has not yet expired.”
This means that the amount of the insurance premium is evenly distributed over the entire policy period. And if it was purchased in April, and in November the policyholder initiates termination of the agreement, he can count on part of the insurance premium covering the period from November to the following April, that is, approximately six months.
But even in this case, the policyholder will not receive half the cost of the car insurance policy, since only 77% of the amount paid by him is used to make payments upon the occurrence of an insured event. 23% are so-called “non-refundable” funds.
Part of it is used by the insurer to pay compensation payments to the Russian Union of Auto Insurers: from this money they pay compensation for the obligations of insurance companies deprived of a license. 20% of the cost of the vehicle license is allocated to the operating activities of the company, that is, the maintenance of offices and employee salaries. When calculating the refund amount, this 23% is immediately deducted from the cost of the policy.
pixabay.com / Evgeny GoTown.ru
What insurers say
PJSC IC Rosgosstrakh told Izvestia that the mechanism for terminating motor vehicle liability insurance contracts for providing false information has been working for a very long time. A break for a couple of months was taken only for the period of transition to AIS OSAGO 2.0.
All policies are verified: the data specified by the client is compared with those contained in government databases.
There was an error
Photo: TASS/Donat Sorokin
“Unfortunately, direct information exchange has not yet been established between insurers and executive authorities. Therefore, verification cannot be done during the time the contract is being drawn up. We have to do checks after the fact,” complained Alexey Volodyaev, director of the modeling and analysis department of PJSC IC Rosgosstrakh.
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According to a representative of Rosgosstrakh, the most common reason for terminating contracts is incorrect information about the purpose of using the car.
“For example, policyholders “accidentally” forget about a taxi license issued the day before. Or the vehicle category is incorrectly indicated - not all car enthusiasts remember that some SUVs are included in category C, and minibuses with more than eight seats are in category D, not to mention the fact that sometimes they try to classify popular crossovers in category A. There are also mistakes in indicating engine power, including its deliberate underestimation,” Volodyaev shared examples.
Rosgosstrakh also said that they terminate contracts when “it is obvious that there is a conscious and deliberate distortion of the data provided, or in case of serious errors - for example, if the engine power is underestimated by several horsepower at once.” On such grounds, the company terminates no more than 1.5% of MTPL contracts. In this case, approximately 0.03% is restored due to erroneous termination.
There was an error
Photo: TASS/Donat Sorokin
Sometimes drivers of rare or modified cars do not have the opportunity to select suitable parameters on the website, including the engine power of their vehicles. And here again there is a risk of falling into a trap. If the car’s parameters do not correspond to the data offered by the OSAGO calculator, Rosgosstrakh advises selecting the “Other vehicle” option and entering all the data manually or contacting the insurer’s office or agent.
Can insurers refuse to pay funds?
Can not. Even if the car was in an accident during the compulsory motor liability insurance policy, after its sale you can still claim a refund. If the conditions are met and the applicant provides a full package of documents, the insurance company has no grounds for refusal.
But if they still refuse to return the money, the expert advises writing a complaint to the Russian Union of Auto Insurers. The organization's website has an electronic reception desk that allows you to submit a complaint online. You can also contact one of the regional representative offices of RSA, where the “alarm signal” from the policyholder will be reviewed and measures taken.
Cause of "errors"
An expert and lawyer in the field of auto insurance, Sergei Belyakov, in a conversation with Izvestia, expressed the opinion that the overwhelming majority of errors associated with the termination of contracts arise due to the deliberate actions of policyholders. At the same time, Belyakov believes that some drivers have to take such steps, because otherwise insurance companies simply refuse them - first of all, this applies to taxi drivers and residents of problem regions.
“Taxis are an unprofitable segment; many simply do not insure them,” explains Belyakov. — There are also problem regions, for example Ulyanovsk, Ingushetia, Vladivostok - there insurers do not want to work in any way and are trying to cancel contracts in the hope that they will not be dealt with for a long time or sued. But mostly drivers really try to lower the premium consciously, and the easiest way is to reduce the amount of horsepower. They round them down rather than up in the hope that this will not be noticed. Another common mistake is changing the registration address. For example, a driver took out a policy in Kostroma, got insured and moved to Moscow, where he registered. Of course, in Kostroma the coefficient will be lower, but the insurance works at the registration address of the policyholder, not the car.”
There was an error
Photo: IZVESTIA/Alexey Mayshev
Belyakov clarified that some drivers are not serious about filling out the form, although it is no different from drawing up an agreement in the office, the expert concluded.
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