IRDAI has recently directed insurers to ensure Certificate of Registration (RC) cancellation of the vehicle in case of total loss claim settlement. “It has come to the notice of the IRDAI that in the case of total loss (TL) of the vehicle, salvage of the vehicle is being sold to scrap dealers without cancelling Certificate of Registration of the vehicle,” IRDAI said in a notification.
In accordance with IRDAI, the law enforcement authorities have informed that documents pertaining to such vehicles are being misused through forging engine number and chassis number of destroyed vehicles under TL claims.
The Section 55 of Motor Vehicle Act 1988 underscores that if a motor vehicle has been destroyed or has been rendered permanently incapable of use, the owner should, within 14 days or as soon as may be, report the fact to the registering authority within whose jurisdiction he has the residence or place of business where the vehicle is normally kept. They should also forward the certificate of registration of the vehicle to the registering authority. The registering authority should cancel registration and certificate of registration, it said.
In case of a vehicle is stolen, the owner must notify the police and the insurance company immediately. Under a motor insurance policy, there are two major components: Third party insurance and Own Damage Insurance.
