Is It Mandatory to Transfer Car Insurance During Vehicle Ownership Transfer?
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When transferring vehicle ownership, the insurance policy must also undergo transfer procedures. According to regulations, during the valid insurance period, if the vehicle is sold, transferred, gifted, or its usage is altered, the policyholder must notify the insurance company in writing and apply for policy endorsement. Otherwise, the insurer reserves the right to deny claims. Therefore, either transferring or canceling the auto insurance is necessary. Auto insurance consists of compulsory traffic insurance and commercial insurance, each requiring different transfer processes as detailed below: 1. Compulsory Insurance Modification: For used car transactions, compulsory insurance generally cannot be canceled. The only exception occurs when selling the vehicle in another region, allowing the new owner to purchase local compulsory insurance. In this case, the new owner should present their ID card, new vehicle license, transfer documents, and the new compulsory insurance policy to the original insurer for cancellation. 2. Timely Commercial Insurance Update: After transferring a used car's ownership, attention must be paid not only to compulsory insurance but also commercial insurance. For local used car purchases, modifications require both the new and original owners to bring the original policy, ID cards, new vehicle license, and transfer certificate to the original insurance company for processing.
