If I sell my car or house, what happens to the insurance?

By law, the insurance passes to the buyer, who takes your place in the contract, unless it is voluntary insurance, such as home insurance, whose general terms exclude this. You must tell the buyer in writing that the insurance exists and notify the insurer of the sale within the following fifteen days. After that, both the insurer and the buyer can terminate the contract within fifteen days. With a car, the usual practice is for the buyer to take out their own insurance and for you to cancel yours or transfer it to another car, depending on what your policy says.

Alburquerque Abogados

José Manuel Alburquerque
Insurance law

If you sell the house

  • Notify the insurer of the sale in writing within the following fifteen days and tell the buyer, also in writing, that the house is insured.
  • The buyer can keep the insurance or terminate it within fifteen days of learning that it exists. If the buyer terminates it, the insurer keeps the premium for the current period.
  • The insurer can also terminate it within fifteen days of learning of the sale. In that case cover continues for one month and the insurer refunds the premium for the time it will no longer cover.
  • The insurer can claim the full amount of the premiums that had fallen due on the date of the sale from either you or the buyer.
  • If the house had a mortgage that is paid off with the sale, ask the insurer to remove the bank from the policy.

If you sell the car

  • By law, the insurance passes to the buyer with the car. In practice, the buyer normally takes out their own policy from day one.
  • Many policies allow the insurance to be cancelled because of the sale, with a refund of the unused part of the premium, or transferred to another car of yours. Check what yours says and notify the insurer in writing.
  • Voluntary cover under a policy in your name, such as own-damage cover, may not pass to the buyer if the general terms exclude it.
  • Also report the sale to “Tráfico”, the Spanish traffic authority, so that fines and liabilities relating to the car do not end up with you.

This answer is provided for educational purposes and offers initial guidance on the question raised. Every matter has its own circumstances and nuances that require individual assessment. For that reason, before taking decisions with significant consequences, it is advisable to consult a professional and not to rely solely on this information. Personalised advice makes it possible to apply these explanations to the specific case and to assess the options available with greater certainty.