In Spain, the law establishes that all motor vehicles must be insured in order to circulate on Spanish roads. Any owner of a vehicle must take out at least car insurance that includes the civil liability guarantee, that covers damages to third parties in the event of a loss or traffic accident where the insured driver was at fault. But what happens to the contracted policy when the driver sells the car?
As a general rule, car insurance contracts last for one year, although this may vary depending on the insurer. When the insurance is in force, owners who want to sell their car they have two options: maintain insurance with the current insurer to cover a new car purchased or transfer the insurance to the new owner. Both possibilities are contemplated in Law 50/1980 of the Insurance Contract.
Keep insurance on the new car
Most of the time, owners sell their vehicle to immediately purchase a new car. In this way, the easiest option is to maintain insurance with the insurer. The procedure is very simple. You must contact the insurer to inform them of the date of the sale of the old vehicle and the date of the purchase of the new one. The insurance company, taking into account the characteristics of the new car and calculating the proportional part of the policy not consumed, will offer the driver a new estimate.
In the event that the driver does not buy another car, the insurers paralyze the policy for a certain time (generally up to a maximum of one year), keeping the proportional part of the unconsumed premium until they buy it. In any case, drivers should always check the maximum time established by the insurance company, since, once the indicated period has elapsed, they may lose the entire premium. Keep in mind that insurers are not required to offer this option.
Transfer the insurance to the new owner
Transferring the insurance to the new owner is the other option for owners who want to sell their car and do not value the possibility of buying a new one. Even if an agreement is reached with the new owner, the insurer will always have the last word when approving the transfer. Drivers should contact the insurance company to provide the new owner’s details. The company will study your accident history and your experience as a driver, aspects that condition the risk assumed by the insurer, to approve the change of owner.
The insurance company is obliged to return the part of the premium that the driver has not consumed in case of refusing the transfer to the new owner of the vehicle. This is what is known as refund of insurance premium. From that moment, the driver has the possibility to compare car insurance to find the policy that best suits his needs, taking into account the characteristics of the new car.