Insurance Basics: Everything You Need to Know

When You Sell Your Vehicle, You Need To Contact Your Insurance Company

In the same way that you had to go through several steps when you first purchased your vehicle, unfortunately, there is an equal number of steps involved when it comes to selling a vehicle. One of the steps involves looping your insurance company into the transaction. If you have plans to sell your car, make sure you know what to do.

Notification Is Essential

It is essential that you let your auto insurance company know that you are selling your vehicle so that you are protected. As far as the insurance company is concerned, as long as the policy is active, you are in possession of the vehicle. 

If the new owner were to be involved in an accident, you could be connected to the incident mistakenly, and as long as the policy is active, you could be charged. Canceling the policy allows you to break all legal ties to the car. A failure to notify the insurance company may also create complications for the new owner when they try to get the vehicle insured.  

Discount Continuation

If your plans involve the purchase of a new vehicle, it is also important to let your insurance company know so that any discounts you receive for insuring multiple vehicles or having multiple policies remain active. When you sell the vehicle, the state registration office will also send a notice to the insurance company. 

If they then drop the old vehicle's coverage and you have also not added the new vehicle, your discount may be lost, and you may no longer qualify for the discount. Even worse, it may not be automatically reapplied; it may take time to reinstate it. Prompt notification keeps your discounts in place. 

Possible Refund

A great thing about auto insurance is that the power is in the hands of the insured. Should you decide to sell your vehicle and enroll with coverage with a new company for your new vehicle, you may be entitled to a refund. Typically, after you notify the insurance company, they will review your account for any prepaid insurance cost. 

As a result, you may receive a refund for any of the days of coverage you paid for but no longer need. Keep in mind that you may need to supply documentation to the insurance company to prove the sale. 

Remember it is important to contact your car insurance company as soon as you decide to sell your vehicle to ensure you are protected.