Is there an insurance refund if I sell my car?

One of the first concerns for anyone selling their car is car insurance. Many people have doubts about the possibility of requesting insurance reimbursement if the protected car is sold. If you are one of them, discover the truth in this article.

There are many reasons that can lead a person to decide to sell their car, and it is not uncommon when this negotiation happens right in the middle of the validity period of their vehicle insurance contract.

If you are going through exactly this, you know how this situation can generate doubts.

You may even be asking yourself now “how do I get a refund on my insurance if I sell my car?”, or “does car insurance cancellation have a refund?”.

In this article, you will be able to better understand this subject.

Image: Getty

Advertisement

How can I get an insurance refund if I sell my car?

When the insured sells his car, there are two possible actions available to him, the first is to transfer coverage to the new owner, through a insurance endorsementthe second is by requesting cancellation car insurance refund, and thus receiving a refund for the remaining months of the term.

Understand What is an insurance endorsement and how does this change to the policy work.

Understand each of the possibilities better.

1. Transfer coverage to the new owner

Suppose you sold your insured car, and wanted to transfer the coverage to the new owner. The way for this to happen is endorsement.

Simply ask your broker to make a TODO endorsement – ​​Transfer of Rights and Obligations, which will state that the vehicle has been sold and the new main driver is now another.

The remaining months of the contract signed by you will be transferred to the current owner, who will possibly have to pay a difference, since, as the main driver has changed, the risk margin will also be different.

However, it is worth mentioning that in this procedure, only the current months already paid will be transferred to the new owner.

Your bonus class will remain yours, as it is only linked to your CPF and not the vehicle.

2. Canceling car insurance refund

The other option available to a policyholder who has sold their car is to ask for the insurance coverage to be canceled.

In this case, yes, your question about receiving insurance reimbursement if I sell my car has a positive answer.

This procedure is a little more complicated and time-consuming than the previous one. And you will only receive a refund for the remaining months of your contract.

For example, you paid the insurance contract in cash at the beginning of the term, and in month 7 of the term, you decided to sell the vehicle.

In this case, you can ask for the contract to be canceled and you will be entitled to a refund equivalent to the remaining 5 months of validity.

However, this returned amount is not full, the calculation for reimbursement is made according to a table known as the Short Term Table, which is made available by SUSEP.

How does the insurance reimbursement calculation table work?

The table used to perform this type of calculation is called a “short-term table”.

It is used both to calculate the coverage relating to the installments paid, if the insurance is canceled due to default, and to calculate the amount of reimbursement in situations where the customer requests cancellation of the policy.

SUSEP – Superintendency of Private Insurance, issued two circulars that regulate how the short term table should be used. These two circulars are:

• Calculation for reimbursement: SUSEP circular nº 256 of June 2004, which contains a table that allows the calculation for the return of values ​​to the customer, when he decides to cancel the policy during its validity.
• Calculation for proportional coverage: SUSEP circular nº 239 of December 2003, which contains another table that must be used to calculate proportional coverage in cases of insurance canceled by the insurer due to default.

The short term table serves to indicate the number of days of coverage still remaining in relation to the installments paid, as well as indicating how much will be reimbursed if you ask for the insurance to be canceled.

See below a simplified version of the table:

How do I request a cancellation and get an insurance refund if I sell my car?

The first thing to do to request insurance reimbursement if the car is sold is to inform the insurance company that the deal has been carried out, providing the necessary documents to confirm it.

The most common documents requested are:

• Proof of sale of the car;
• Written request for cancellation of insurance;

Once this is done, the next step is to wait for all documents to be analyzed and the reimbursement calculation to be made, using the table mentioned here as a basis.

Can I get a discount when I take out insurance for my new car?

There is a car insurance bonus, that is, a score that you can exchange at renewal to leave your protected car. But here's how the rules work if you've received an insurance chargeback.

And if you're wondering: “Do I lose the insurance bonus when I sell my car”, know that this score is recorded on your CPF and not on the vehicle. Therefore, it will remain with you, even when selling a motorcycle, car, truck or other vehicles.

However, if you request an insurance refund, be sure to speak to the insurance company about the rules. For example, Porto Seguro reimbursement has different rules than other insurers, such as Youse, Allianz and others. As long as they follow SUSEP's determinations, insurers can make their own rules regarding the insured vehicle.

Other precautions I should take when selling my car

In addition to taking care of the details regarding your vehicle's auto insurance, it is important that you pay attention to other details during the process of selling your car.

The first is to carefully analyze the current market price of your vehicle.

To do this, you can access the FIPE Table and carry out a search providing data such as the brand, model and year of manufacture of your car.

This table shows the average values ​​practiced in the used vehicle market today.

The second and no less important precaution is to check with DETRAN if there is any fine or pending issue for your car.

If there is any irregularity, it will be practically impossible to sell your car. So do this and try to resolve all outstanding issues before putting the car up for sale.

It is also interesting that you carry out a general inspection of the car and check the condition of the chassis, license plate and windows.

Also analyze whether this information is correctly described in the car document.

After taking these precautions and knowing what to do with car insurance, you will certainly have no problem selling your vehicle.

If you were racking your brain over the question “can I get an insurance refund if I sell my car?”, know that the answer is yes, if you choose to cancel the service.

If you request that the insurance be transferred to the new owner through an endorsement, no amount will be refunded.

However, it is best to contact your insurance broker and find out more about the entire procedure for requesting insurance cancellation and reimbursement if the car is sold.

*Source: MeuSeguroNovo. Consultation carried out in March/2019

*Published in 03/28/2019 and updated on 06/01/2022.