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RC Cancellation in Total Damage of Car?

  • Author :
  • TATA AIG Team
  • Published on :
  • 07/07/2022

Comprehensive car insurance is necessary to protect your car in the case of an unfortunate accident, theft, or vandalism. However, while your 4-wheeler insurance plan covers the financial damage and personal liability, there may be a few other steps required to ensure complete safety.

The registration certificate, or RC, as it is popularly known, serves as a kind of identity for your vehicle. It is an essential legal document. However, it can be misused against you in some situations, such as if you happen to sell your damaged car. Cancellation of the RC of the vehicle is crucial in such cases.

Find out more about this and things to do to cancel your RC if your car is damaged beyond repair.

What is an RC?

Every vehicle has a unique Registration Certificate that can be obtained from the local Regional Transport Office (RTO) when you buy a car. The RC is a legal document that establishes your car’s registration with the Government of India.

It contains additional information on the vehicle, such as the car’s engine and chassis number, its cubic capacity, the category of the vehicle, the type of fuel used, as well as the territorial boundary where the case can be used. In addition to this, the RC is required when you purchase or renew a car policy online or offline.

The RC is valid for a maximum of 15 years.

When Do You Need to Cancel Vehicle Registration? 

The cancellation of the RC of the vehicle is necessary if the car has been totally damaged. Car insurance companies consider a vehicle to be totally damaged if the cost of repair exceeds 75% of the car’s Insured Declared Value (IDV). IDV refers to the amount of money that you can claim under a car insurance plan. It is calculated as per the price of the car and its depreciation caused over the years. The older the car, the lower the IDV. The IDV is the highest for a new car and lowers with time due to wear and tear.

RC cancellation is mandatory as per the guidelines of the Insurance Regulatory and Development Authority of India (IRDAI) and Section 55 of the Motor Vehicle Act 1988. Here’s why:

When a car gets damaged beyond repair and costs more than 75% of its IDV, most car owners end up selling the car for scraps. The costs of repair out of pocket can be enormous, and not many people can afford it.

In such cases, the vehicle is generally sold to scrap dealers who may sell parts of the car to garages or the entire vehicle to a recycling unit. However, in some cases, the scrap dealers may also misuse the vehicle. Forging the chassis number and engine number of a damaged car to a stolen car is very common. This can transfer the ownership of the RC to the new car owner.

The stolen vehicle market is massive in India and preys on owners of damaged cars. If you forget to get your RC transferred, you risk losing your RC to another person who may exploit and misuse your identity. This can put you in trouble and cause legal hassles. Moreover, it fuels the stolen car industry.

What is the Process of RC Cancellation Online?

The RC cancellation process is quite simple. Here are the steps for the same:

  1. Check if the car in question is totally damaged by notifying your 4-wheeler insurance company of the mishap.

  2. Contact the scrap dealer and ask them for the chassis number of your car. This number proves that your vehicle has been scrapped.

  3. Get an affidavit with the scrap dealer’s signature confirming that your car has been scrapped.

  4. Report the incident to the RTO in your state within 14 days of scrapping your car.

  5. The RTO will get a clearance from the police and verify the details of the accident that damaged your car.

  6. It can take anywhere between four and five weeks for the RTO to complete the verification and issue a certificate of non-utilisation.

  7. Once the certificate of non-utilisation has been issued, your car’s RC will no longer be valid.

Things to Remember While Cancelling The Vehicle Registration

Here are some essential points to note to speed up the process and avoid unnecessary delays:

  • You must report the incident to the RTO within 14 days of scrapping your car.

  • If you have moved to a different state from the one you registered your car in, you have to inform the registering authority in the state of your current residence. They will contact the RTO of the original state on their own.

  • Once the RC cancellation process is complete and the non-utilisation certificate has been issued, you can no longer use your car for driving or sell it to another user for driving. The vehicle is now considered scrap. 

  • The RC cancellation fee is not fixed and can differ from one state to another. It may be advised to check the actual costs in your state of residence to be sure.

  • There is no penalty for not cancelling the RC. However, it is legally mandated, and you must do so anyhow to avoid legal hassles later. Nullifying the RC is also vital to protect your identity and avoid being a target of fraudsters.

  • You must have an active third-party or comprehensive car insurance policy to cancel the RC. In addition to this, having a car insurance plan is beneficial for other reasons too. It can help you cover the costs of theft, damage, or vandalism. Third-party insurance is also mandatory by law. Moreover, with car insurance, you always have a financial cushion to rely on and can save your money otherwise spent on repairs.

If you do not have car insurance, or your existing insurance is going to be invalid, you can purchase a car policy online from Tata AIG. We offer both third-party and comprehensive car insurance. You can also calculate your premium before making the purchase.

Documents Needed to Cancel Vehicle Registration

You need the following documents to complete the RC cancellation process:

  • Original RC of the car
  • Car’s chassis number from the scrap dealer
  • An affidavit with the car’s details mentioning it is being scrapped
  • Pollution Under Control (PUC) of the car
  • Third-party or comprehensive car insurance policy of the car

It is also advised to review the current guidelines of the IRDAI with respect to the cancellation of RC in case of damage. The governing body may change the rules from time to time.

In Conclusion

Having a damaged car can be a challenging financial position to be in. However, while no one plans for a day when this might happen, the situation can present itself. When it does, it is crucial to act fast and as per the legal guidelines of the IRDAI. Cancelling your RC within 14 days can help you protect yourself from fraudsters. It also helps the government minimise the racket of stolen cars in the country. So, make sure that you follow the steps and get your car’s RC cancelled.

In addition to this, it is also essential to protect your car against financial liabilities with a good 4-wheeler insurance plan. The total loss or damage is an odd incident where scrapping may be the only option. In most other situations, your car insurance policy can suffice to take care of the damages or losses incurred.

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