What Happens to Car Insurance After a Transfer Of Ownership?

When you buy or sell a car, one of the key questions is what happens to the vehicle's insurance. Does the old policy remain valid, or do you need to arrange something new? Here, we’ll break down the rules for car insurance after a transfer in Cyprus in a simple and straightforward way.

Does the Insurance Remain Valid After a Transfer?

The short answer is no. In Cyprus, car insurance does not automatically transfer to the new owner. Insurance policies are tied to the previous owner, not the vehicle itself. This means that once the transfer is complete, the old insurance policy ceases to be valid.

As the new owner, it is your responsibility to arrange new insurance before driving the car.

What You Need to Do as the New Owner?;

As a new owner of a transferred vehicle in Cyprus, you need to follow the following steps:

1. Car Insurance: Before driving the vehicle, you must insure it with your name. The insurance must be valid and cover at least the compulsory third party liability. Note that the previous owner's insurance is not automatically transferred to you.
2. Register the vehicle in your name: You must apply for a new owner registration certificate at the Road Transport Department or a Citizen Service Centre (CSC). The necessary documents include:
   • Completed TOM 9B form from the previous and new owner.
   • Motor Vehicle Registration Certificate.
   • Original certificate of insurance in your name, valid for at least three months.
   • Payment of a transfer fee. If the vehicle does not have a valid certificate of fitness, a declaration that you are aware of the vehicle's condition is required.
3. Renewal of vehicle registration: After registration, you need to renew your vehicle's registration in your name by paying the relevant fees.
4. Attention to the obligations of the previous owner: Make sure the previous owner has cancelled their insurance and informed the Department of Road Transport of the transfer, so that you do not remain liable for any offences or debts associated with the vehicle.

By following these steps, you will ensure the legal and safe circulation of your vehicle in Cyprus.

What You Need to Do as the Previous Owner

As a seller of a vehicle in Cyprus, you need to follow the following steps for the correct transfer of ownership:

• Completion of the TOM 9B form: This form must be completed by you and the new owner. It can be found on the Department of Road Transport website.
• Presentation of the Motor Vehicle Registration Certificate: This document proves the current registration of the vehicle in your name.
• Original Certificate of Insurance: The new owner must provide an original certificate of insurance in his/her name, valid for at least three months.
• Payment of the transfer fee: The transfer fee is paid by the new owner.
• Certification of signatures: Your and the new owner's signatures must be certified by the Township Clerk or other appropriate official. If both of you are present at the transfer, the certification may be made by an official of the Department of Roads.
• Declaration for a certificate of suitability: If the vehicle does not have a valid certificate of fitness, a solemn declaration by the new owner that he is aware of it is required.

It is recommended that you complete the transfer process before handing over the vehicle to the new owner to avoid any legal or financial complications.

Common Mistakes to Avoid

When transferring a vehicle in Cyprus, there are some common mistakes you should avoid:

1. Negligent cancellation of insurance: As the seller, if you do not cancel the vehicle insurance in your name, you may remain liable for any infringements or accidents that occur after the sale. It is important to inform your insurance company of the transfer.
2. Failure to inform the Road Transport Department: If you do not submit the TOM 9B form and do not inform the Department of Road Transport, the vehicle may remain in your name and you may be liable for registration fees or other obligations. Be sure to complete all required procedures for the transfer.
3. Sale without complete documents: Do not deliver the vehicle without all the necessary documents, such as the registration certificate and the insurance certificate. If these documents are missing, the transfer will not be valid and may cause problems for the new owner.
4. Ignoring the suitability of the vehicle: Before the transfer, make sure that the vehicle has a valid certificate of fitness. If the vehicle does not meet the requirements for registration, there may be problems with registration in the new owner's name.
5. Failure to provide all the necessary documents for the transfer: If you do not fill in the TOM 9B form correctly or if other required documents are missing, the transfer process will be delayed or may be rejected.
6. Sale without having agreed with the buyer on the price and terms: Make sure you fully agree with the buyer on the price and the conditions of the transfer before the process is completed. It is advisable to have a written agreement as well to avoid future disputes.
7. Negligence in notifying the authorities of the change of ownership: If you do not inform the authorities correctly about the change of ownership, you may be liable for fines or illegal use of the vehicle by the new owner.

Conclusion

Car insurance does not carry over after a vehicle transfer. If you’ve purchased a car, ensure it’s insured before using it. If you’re selling, notify your insurance company to avoid future liabilities. The process is simple, and by following the steps above, you can fulfill your legal obligations and avoid unexpected problems.