Today, any vehicle owner knows what an insurance policy is. The most important thing in its design is to choose a reliable organization. Each driver may encounter a situation where early termination of the CTP insurance contract is necessary. It is quite possible to do this, however, without knowledge of all the subtleties of the legislation it can be quite problematic. Nevertheless, if you follow certain instructions that will be given later, you can avoid pitfalls and return your money without any problems.
General information about the early termination of the insurance contract
The reasons for which it may be necessary to terminate the CTP insurance agreement may be quite a lot, however, regardless of them, the current legislation should be fully adhered to. Only in this way will you be able to achieve the desired result and do not give the insurer's lawyers a reason to refuse your legal right.
After settling all legal formalities, the driver has the right to receive the amount paid earlier for the policy, with the exception of 23 percent of the cost of insurance, which includes deductions from the compulsory insurance company of the Union of Auto Insurers, as well as related costs of doing business.
What documents are required for termination
Termination of the MTPL insurance contract is a standard procedure requiring the driver to have a certain set of documents. According to the current legislation, it is necessary to prepare:
- receipts for payment of insurance services under the current policy;
- original contract;
- car purchase / sale agreement;
- standard application form for early termination of insurance;
- any document proving your identity.
This is a basic list of documents, which is mandatory. However, depending on the reason for the termination, the insurance company has the full right to demand some additional documents. Therefore, it is recommended to clarify in advance with the representatives of the insurer the exact list of all necessary securities and prepare them in advance so that the termination of the MTPL agreement passes as quickly as possible and without unnecessary problems.
In what cases may termination of the insurance contract be required?
To date, early termination of CTP is possible in the following cases:
- death of the owner of the car;
- expiration of the license of the insurer to carry out its activities;
- a traffic accident in which the car has suffered very severe damage and cannot be repaired;
- change of car owner.
In some cases, it is possible to terminate the MTPL agreement at the initiative of the insured, however, in practice such cases are extremely rare, so it makes no sense to dwell on them. Depending on the reason why the driver wants to early terminate the insurance services, the process of canceling insurance services can occur in different ways. Therefore, each of the possible cases should be considered separately.
Death of a car owner
If you want to terminate the insurance contract due to the death of the legal owner of the car, then you need to prepare the following documents:
- original insurance contract;
- all receipts for the current policy;
- death certificate of the owner of the vehicle.
When the entire package of documents has been prepared, it remains only to contact the insurance company and submit the appropriate application.
The car cannot be repaired
If the car as a result of an accident has received incompatible “life” damages, the term of the MTPL agreement expires automatically, however, in order to receive monetary compensation, the car owner will need to present receipts of payment and the original insurance contract.
Termination of the license of the insurer
If the insurance company has expired a license to engage in this type of activity, the policy ceases to exist automatically and you will not need absolutely any documents and statements. The whole problem is that it will be very difficult to get monetary compensation in this case.
Change of car owner
Is it possible to terminate the compulsory motor third-party liability insurance contract upon transfer of a person’s own right to a vehicle to another person as a result of sale or donation of property? In this case, the termination procedure occurs in the standard manner, however, everyone will have to deal with the former owner, whose personal data is indicated in the insurance contract.
Termination procedure: when is it best to apply?
Many drivers are interested in the question of how to return the money for insurance. Earlier, the main cases that allowed termination of the contract between the driver and the insurer, as well as the necessary documents for this, were considered, however, when is it best to file an application?
The current insurance policy loses its legal force from the moment the driver contacts the insurance company, and not after the official termination of the contract. Therefore, it is not recommended to delay the submission of the application, since the amount of monetary compensation depends on this. To make it clearer, let's imagine the car was sold in April, and the former owner of the vehicle filed an application with the insurance company only in July. In this case, there will be no compensation for 4 months, since the insurance policy was considered valid.
What documents will you need to collect?
Very often, many insurance companies refuse their customers the possibility of early termination of insurance. In order not to be in such a situation, it is recommended to prepare a package of documents in advance, which includes:
- original plisse;
- application for termination of the mandatory liability insurance contract;
- passport or driver’s license;
- receipt for payment of insurance;
- photocopy of TCP;
- copy of the contract of sale / purchase, as well as a power of attorney issued to the new owner;
- photocopy of death certificate in case of premature death of the legal owner;
- Act on the disposal of the vehicle, if it cannot be restored;
- additional documents that may be requested by the insurer.
If everything is in order with the documents, however, representatives of the insurance company stubbornly refuse to accept your application for termination of the policy, then send them by registered mail to the physical address of the main office. In this case, the company simply cannot ignore your appeal and will be forced to give an official response.
How is the compensation paid?
According to the current legislation, the refund to the insured is carried out immediately after the legal termination of the CTP insurance agreement is completed. If it is more convenient for the client that the money be transferred to his bank account, then the settlement procedure can take two weeks longer.
At the same time, they are entitled to a refund upon termination of car insurance:
- direct heirs of the owner of the vehicle in the event of his death;
- legal owner of the car;
- any person who has a notarized power of attorney from the owner of the car.
The amount of compensation upon termination of the insurance contract depends on several factors, the main of which is how much CTP costs. There is a special formula for calculating the amount of compensation.
The formula for calculating the cash payment upon termination of insurance
You already know how to return the money for insurance upon its early termination, however, how much can you expect? Insurance companies to determine the amount of compensation are guided by the following formula:
D = (P-23%) * (N / 12), where:
- D is the amount of compensation;
- P - the amount paid by the insurer at the conclusion of the contract;
- N is the number of unused months;
- 23% - associated costs incurred by the insurer in the conduct of the business of each client.
Thus, early termination of the CTP insurance agreement, a sample of which can be found on the official website of the insurer, in order to receive monetary compensation makes sense only if at least 6 months are left before its expiration. If one or two unused months remain on the policy, then termination does not make any sense, since the amount of compensation can be significantly less than your associated expenses, regardless of how much the CTP costs.
Early termination of CTP: what to do if money does not come?
There are such cases when the driver submitted the application on time, prepared the necessary package of documents and, in accordance with all the rules, formalized the termination of the insurance contract, however, monetary compensation did not arrive at his bank account after two weeks. What to do in this situation?
The first step is to contact the insurer and try to find out the cause of the problem. It is possible that the payment is simply delayed. If the fact of payment is confirmed, then there is nothing wrong with this and you need to wait a little longer. However, as practice shows, almost all insurers are very reluctant to terminate the MTPL agreement and return the money to the client. In this case, you need to make a copy of the policy and the application, and contact the Union of Auto Insurers. This self-regulatory body deals with the resolution of various disputes between drivers and insurers, and has many levers of influence on company representatives who conduct their business in bad faith. In most cases, contacting this organization helps to solve the problem very quickly and payment of compensation upon termination of car insurance very quickly reaches the addressee.
In what cases compensation is not provided for termination of the policy?
Early refusal of insurance services is a legal right of every citizen, however, in legal practice there are a number of cases when payment of monetary compensation is not provided. One of these is the termination of the insurance company. For example, a legal entity was liquidated as a result of bankruptcy, and its inability to fulfill its financial obligations to customers. In this case, the law exempts the insurer from fulfilling its obligations.
The second common case is the termination of the contract by the insurer due to the fact that the client provided false information. In addition, if the owner of the vehicle plans a long trip abroad, and does not plan to use the car during this time, then payment of compensation is also not provided, since in this case there are no legal grounds for a refund. In order not to get into the unpleasant situation associated with the early termination of insurance, it is recommended that you read the contract very carefully when applying for the MTPL policy.
Conclusion
The process of termination of the insurance contract is fraught with a lot of problems and does not always go
without a hitch. This is due to the fact that in Russian legislation there are a lot of holes that unscrupulous insurers do not disdain to use. Therefore, if you have any problems, you can always go to court. As practice shows, the vast majority of litigations were won by policyholders, since the judicial system prefers to take the position of ordinary citizens. But, whatever it was, never give up. If you know that the law is right on your side, then always contact the appropriate organizations for monetary compensation.