Overview –
Cars provide people with multiple uses primarily pertaining to ease of transportation interspersed with elements of comfort, luxury, and convenience. Although purchasing and maintaining a car can be expensive, car insurance helps provide a layer of financial security. Car insurance can be availed in the form of third-party insurance or comprehensive car insurance. The former is made available by the motor issuer themselves and covers legal liabilities owed to accidents or damaged property. The latter is more expansive in the coverage it offers.
Understanding Total Loss of a Car –
In the realm of motor insurance, the total loss of a car is used to refer to a scenario in which the cost of repairing a car exceeds 75 percent of the amount insured for the vehicle. Insured declared value (or IDF) is a term used to donate the maximum amount that the policyholder is entitled to claim from the company responsible for issuing their motor insurance which covers the loss or damage that might impact their car. In the event that this insurance company is required to pay more than three-quarters of the total IDV in order to repair the policyholder’s vehicle, the term total loss of the car becomes applicable.
Steps to Take in the Event of Total Loss of a Car –
Should a motor insurance company deem a policyholder’s car as a total loss and incapable of use on a permanent basis, policyholders are entitled to sell the remains of their damaged vehicle to a scrap dealer. The latter breaks down the remains of the vehicle in order to recycle them.
Those who choose to sell the remains of their damaged car to such dealers are legally obligated to get the registration certificate (or RC) issued for their car canceled. This is based on Section 55 of the Motor Vehicles Act, 1988.
The Regional Transport Officer (or RTO) responsible for jurisdiction within the car owner’s region must be informed of this loss of status of the car within a fortnight of it being deemed so. The RTO will proceed to cancel the RC of the car in question as a result of which the car will be deemed as scrap and no longer capable of being registered by someone else.
This process will be complete once the police provides clearance pertaining to the same and will result in the RTO issuing a non-utilization certificate for the car within four to five weeks.
Relevance of Canceling an RC After Total Loss of a Car –
It is important to cancel a car’s RC in the event it is deemed to be a total loss as –
- It prevents the misuse of the documents of the damaged car by miscreants and criminals who could use said documents to acquire a new identity in addition to carrying forth other illegal activities.
- By canceling an RC, you can prevent vehicle theft. Else, criminals can change the identity of a stolen car and may forge the engine along with the chassis number associated with the car.
Conclusion –
Availing car insurance is a legal requirement by the Indian government – Bajaj Car insurance is a viable option for those presently in the market. Finserv MARKETS is the perfect place to buy the same. Canceling an RC in the event of the total loss of a car is pertinent.