Mr. Nguyen Long (Hung Yen) said that he bought compulsory civil liability insurance for cars as an individual, for a period of 1 year. However, after only a few months, he established a single-member LLC and completed the procedures to re-register the car with the company name, and was issued a new license plate.
Mr. Long wondered whether the old insurance certificate, which was purchased under his personal name and the old license plate, was still valid or not.
Responding to this issue, the Ministry of Finance affirmed that in this case, the old insurance contract will cease to be valid.
According to the provisions of Decree No. 67/2023/ND-CP, the compulsory insurance certificate must have full information of the motor vehicle owner (name, address) and vehicle information (license plate, chassis number, engine number).
More importantly, Article 11 of this Decree clearly stipulates: The insurance contract will terminate from the time the motor vehicle's vehicle registration certificate and license plate are revoked. The insurance company is responsible for refunding the insurance premium corresponding to the remaining period of the contract to the buyer.
Meanwhile, according to Circular No. 24/2023/TT-BCA of the Ministry of Public Security, the mandatory process when transferring vehicle ownership (name change) is that the vehicle owner must carry out procedures to revoke the old vehicle registration certificate and license plate at the police agency. After that, the new vehicle owner will complete the registration procedure to be granted a new Registration Certificate and license plate.
Thus, when a vehicle is subject to procedures for transferring its name, changing ownership, the old license plate and old registration will be revoked. This means that the previously purchased compulsory civil liability insurance contract will automatically expire.
The Ministry of Finance recommends that, to avoid unnecessary disputes, when carrying out procedures for transferring vehicle ownership, the old vehicle owner and the insurance company should proactively negotiate the termination of the old contract. The new vehicle owner (in this case, Mr. Long's company) will have to buy a new Insurance Certificate with accurate information according to the new registration and license plate.
