Motorists often wrongly believe that liability insurance expires following a change of owner upon the sale of a vehicle. However according to the valid legislation it occurs at the moment the policyholder, his heir, legal successor, or vehicle owner, if he is a person different from the policyholder, notifies the respective insurance company of this fact. Therefore it is important for the seller to inform not only the district office in whose Road Vehicles Register the sold vehicle is registered, but also the respective insurance company, of the change in ownership of the vehicle.
It is necessary to highlight that upon a change of ownership of a vehicle the Motor Third-Party Liability insurance is not transferred to a new owner. Whilst the previous owner’s liability insurance still exists the new owner can take advantage of the insurance in the event of damage, but the original insurance policy is not transferred to him. The new owner is, however, obliged to conclude his own insurance policy. The original owner should not want his own liability insurance to continue in favour of somebody else, as he loses the opportunity to ask his insurance company to return remaining portion of insurance premiums and exposes himself to the risk that in the case of damage caused by the new owner he will lose his no claims bonus.
Summary of the duties the law imposes on the original and the new owner of a vehicle:
- The original and the new owner must fulfil their reporting duty to the Road Vehicles Register (within 10 working-days of the change in ownership, but the sooner the better).
- In his own interest the original owner notifies with dispatch his insurance company of the change of the vehicle’s owner and hand over the liability insurance certificate and the green card.
- Not later than 14 days, but preferably immediately after expiration of liability insurance the new owner concludes an insurance policy on liability insurance with an insurance company of his choosing. Without the concluded insurance policy the vehicle may not be operated on the roads.
- If the new owner does not intend to operate the vehicle, within 14 days after expiration of liability insurance he must hand over the vehicle registration (plate) number and the vehicle registration certificate to the Road Vehicles Register administrated by the respective vehicle registration body. In this respect the vehicle owner can request the temporary withdrawal of the vehicle from the Road Vehicles Register for an unlimited period.