I'm selling my car, but the car is still under my insurance policy. What happens if buyer is in an accident?
Total Comments: 2
Posted: Wed May 26, 2010 05:44 pm Post Subject:
Common misconception, that the insurance policy is what is causing you to be liable for the property. That is not the case. You are responsible for damages caused by vehicles you own. Having insurance on property you own only protects you from having to pay for those damages out of your pocket. I would recommend that you obtain a signed (possibly even notarized) bill of sale, date and timed, from your buyer. Also, depending on the state you live in, your Department of Motor Vehicles might even have a specific form that you can mail into them to prove you sold the car, because you cannot be assured the new owner will register it in a timely manner.
Posted: Wed May 26, 2010 05:45 pm Post Subject:
Most states require what is called “insurable interest” to exist before an insurance company will be required to pay for the accident. What this means is that you have to have some financial interest in the automobile that was involved in the accident before your insurance will pay. Since you sold the car, you don’t have any financial interest. Therefore, your policy would be useless on that car. Get proof you sold the car. That’s your best safeguard in this situation.
Posted: Wed May 26, 2010 05:44 pm Post Subject:
Common misconception, that the insurance policy is what is causing you to be liable for the property. That is not the case. You are responsible for damages caused by vehicles you own. Having insurance on property you own only protects you from having to pay for those damages out of your pocket. I would recommend that you obtain a signed (possibly even notarized) bill of sale, date and timed, from your buyer. Also, depending on the state you live in, your Department of Motor Vehicles might even have a specific form that you can mail into them to prove you sold the car, because you cannot be assured the new owner will register it in a timely manner.
Posted: Wed May 26, 2010 05:45 pm Post Subject:
Most states require what is called “insurable interest” to exist before an insurance company will be required to pay for the accident. What this means is that you have to have some financial interest in the automobile that was involved in the accident before your insurance will pay. Since you sold the car, you don’t have any financial interest. Therefore, your policy would be useless on that car. Get proof you sold the car. That’s your best safeguard in this situation.
Add your comment