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Vehicle damaged beyond repair? Here's what owners must ensure

In case of an accident or theft of a vehicle, vehicle owners generally think of making an insurance claim. If the vehicle is damaged beyond repair, most people sell the remains of their vehicle to a scrap dealer. It may be noted that
in case of an accident where the cost of repair is over 75% of the insured declared value (IDC), you can make a claim.

IDV is the approximate market value of your vehicle at the time of filing the claim. In case of an accident which destroys your vehicle beyond repair, is claiming insurance enough? Apart from making a claim, there are some other things which you must take care of before you sell the remains of your destroyed vehicle.

According to a circular issued by the Insurance Regulatory and Development Authority of India (Irdai) recently, there have been cases of misuse of documents of vehicles that are sold to scrap dealers. The regulator noted that there have been incidents where the thieves forged the engine and chassis numbers of vehicles that are sold to scrap dealers and used them to create fake identities of vehicles which they may have stolen. 

Owners must know that while they are not at fault if the documents are indeed misused, the owner in whose name the vehicle is registered can fall into deep trouble. This is why one should be very careful and vigilant while seeling their destroyed vehicle to any scrap dealer. However, what is it that you should do if your vehicle gets stolen or is severely damaged after an accident?

As per Section 55 of the Motor Vehicle Act, if a motor vehicle is destroyed or is rendered incapable of use, the owner shall report this within 14 days to the registering authority within the jurisdiction of their residence or place of business where the vehicle is usually kept, and forward the certificate of registration certificate(RC) to such authority. 

If it is the original authority with which the vehicle was registered, it will cancel the RC itself. If not, it will forward the RC to the original registering authority. This will ensure even thieves forge the engine and chassis numbers, you will not be in any trouble. While there is no penalty for cancellation of RC, the insurance regulator has strictly instructed insurers to ensure that the RC is cancelled in cases where policyholders file a claim for total loss and settle the claim thereafter.

As a vehicle owner, make sure to take this exercise seriously and get the RC cancelled. This will help you ensure that no serious crime is committed using your vehicle’s registration details after you have sold the damaged vehicle to the scrap dealer.

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