Why & How you must Cancel your Vehicle Registration Certificate within 14 days of Total Damage?

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06 Jun 2023

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Being in a situation where your vehicle gets damaged beyond repair is despairing. It can cause you a financial as well as a mental burden. However, it is crucial that in such a situation, you keep a composed mental stature and take the required steps to ensure all legal formalities are done properly. It will safeguard you from any legal problems in the future.

When is your vehicle considered in total loss?

Your vehicle is considered to be in a state of total loss or damage if the repair cost exceeds 75% of the Insured Declared Value (IDV). The IDV of a vehicle is the maximum amount that the owner can claim under the vehicle insurance policy following an accident or theft. IDV is calculated based on the vehicle's manufacturer's selling price.

What is the Registration Certification (RC)?

RC, or the Registration Certification of a vehicle, refers to the legal document that confirms that the vehicle has been registered with the Indian government. This vehicle registration certification mentions the territorial boundary within which the vehicle can be used, along with the car's engine and chassis number, its cubic capacity, the category of the vehicle, and the type of fuel that the vehicle uses. The certificate is valid for 15 years, after which you will need to renew it. Also, you will need the RC if you are trying to purchase or renew your car policy.

Why must you cancel the RC within 14 days of the total vehicle damage?

If your vehicle is in a state of total damage, you are required to cancel the vehicle registration certificate within 14 days. It is because, as per the Motor Vehicle Act 1988 and Insurance Regulatory and Development Authority ​(IRDAI), vehicle owners are to cancel their certificate of registration (RC) within 14 days if their vehicle is completely damaged or rendered incapable of use.

The authorities have mandated this to stop illegal practices and protect vehicle owners from fraud. When a car is in a state of total damage, vehicle owners usually sell its parts to scrap dealers to get some amount from the damaged car. However, in many cases, these can be misused by giving a new identity to stolen vehicles and forging engine numbers and chassis numbers of destroyed vehicles.

How to cancel the RC?

  1. Notify the insurance company and check to see if your vehicle is completely damaged.

  2. Notify the state Regional Transport Office (RTO) within 14 days.

  3. The police will clear the RTO for cancellation of the RC.

  4. The RC will be canceled within 4-5 weeks, and a certificate of non-utilization will be issued.

You will need to pay a prescribed fee to complete the process.

Conclusion

To safeguard yourself from being involved in any fraud, immediately cancel the vehicle registration certification in case of the total loss of the vehicle. If you purchase a new vehicle after selling or canceling the RC of your current vehicle, you will require auto insurance. Check here to get the best insurance plans personalized as per your requirements.

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Team Kotak GIC

The content of this blog has been created and carefully reviewed by the esteemed team at Kotak General Insurance, with the sole purpose of providing valuable guidance and sharing insights on the importance of general insurance. Our objective is to assist users in making informed decisions when purchasing or renewing insurance policies for their cars, bikes, and health. Our expertly curated information aims to empower our readers with the knowledge they need to protect their valuable assets and financial interests.