Usually you have several options as regards to your insurance when you sell or dispose of your vehicle. You can transfer the coverage to your new car if you are replacing the old one, cancel it and get a refund of premiums paid or transfer it to the new owner, especially if the ownership is being transferred to a family member.
It is usually pretty straightforward to transfer insurance to another car. All you need to do is inform your insurer of the switch over. Depending on the car taken off cover and the one replacing it you may need to pay a little more premium for the reminder of the policy or get a refund. There is usually no need to terminate the first policy and arrange another one, especially when the vehicles swapped are similar to each other.
Nevertheless, you should always get alternative quotes when your current insurer’s price surprises you. Some insurers don’t like certain types of automobiles and that may result in a jump in premium. You can always cancel your auto insurance early if it is beneficial to do so or doesn’t make sense to stay with your current provider. You don’t need to worry about pre-paid premiums because you will get your money back.
If you sold your vehicle and you are not buying another one immediately you shouldn’t rush to cancel your policy. Insurers always check on your insurance history when you want to insure another vehicle anytime soon. A lapse in coverage can cost you more than the premium savings until then as many companies apply a surcharge for a lapse.
You may wait to replace the car on the policy with a new one if you plan to buy one shortly. If not, you may want to convert your policy or replace it with a non-owner policy until you buy another vehicle, just to avoid the lapse. If you are not planning on buying a vehicle anytime soon and not planning on driving in the US for sometime you may not worry about what happens when you need insurance again.
Once you dispose of your vehicle nobody can claim on your auto insurance even if you keep it because you lost the insurable interest on it. In other words, if it is not legally yours, you could not have suffered a loss if anything happens to it and therefore you cannot make a claim of loss. You can only insure a car you don’t own under special circumstances.
Often families transfer ownership of a vehicle to each other. That is when it may make sense to transfer the insurance as well. Your child may be moving out and taking the car you bought for his use as well. Then, you would probably want to transfer the ownership and the policy over. In such cases, you wouldn’t mind talking to your insurer and they would be happy to see you want your child remain insured by the company. Some companies offer special discounts when another member of your family is keeping the policy or buying another policy from the same insurer.
Again, you should always compare the costs from other companies too. Just because an insurer has been offering great rates to you doesn’t mean that your young children would get good rates as well. Some insurers specially try to avoid teen drivers and offer them higher rates. That is why your children may be able to find more economical policies somewhere else.
Transferring car insurance ownership to someone else other than family isn’t usually something most people would consider but it is allowable and doable. Insurance is a personal arrangement that requires sharing many things about you with the insurer. Not that it would cause much of a problem but most people wouldn’t want to explain to their insurers that they want their policy transferred to another person.
In any case, the new owner of the car you owned until recently will have totally different zip code, driving record, credit history, age and perhaps gender that the insurer will have to take all into account and prepare a new quote. Then, there isn’t really much point in you getting involved at all. You might just want to cancel your policy if you don’t think you will need it in the near future and get your money.