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Cancel Your Bike Registration Certificate After Scrapping

  • Author :
  • TATA AIG Team
  • Published on :
  • 07/02/2023

There are two types of people who buy motorcycles ‒ the ones who prefer easy and cheap commute on bikes, and the other type consists the enthusiasts. Now, when people purchase a new bike, they buy insurance policy for the bike. Having a bike insurance is not only mandated by law, but it is also a guard against financial blows that might land straight on your face if your bike meets with an accident.

In case of a road accident involving your motorcycle, there are several types of liabilities that you have to take care of. If you have caused death or bodily injuries to someone in the accident, you have to compensate that person. It is called third-party liability.

Third-party bike insurance is mandated by the Motor Vehicle act 1988, but you should keep in mind that it does not cover the expenses for your personal damage. The repair cost to your bike has to borne by you, unless you have a comprehensive or standalone own-damage cover two-wheeler insurance policy.

But what happens if the bike is completely wrecked in the accident, and is beyond repair?

We will address these concerns with details of procedure in this blog. So, keep reading.

What is Total Loss of Bike?

Before we proceed further, let us understand one crucial point - total loss. The scenario of Total Loss arises when the bike gets damaged beyond repair. To understand this better, you have to understand IDV or insured declared value of a bike.

When you purchase a standalone or a comprehensive 2-wheeler insurance online, the insurer determines the maximum value of your bike depending upon the vehicle’s age and condition. This is known as IDV. A policyholder can never claim more than the IDV. Now if the repair cost of the insured bike, after an accident, is more than 75% of the IDV, the insurance company declares it a total loss.

In such a case, the insurer may pay the IDV, because you are more likely to scrap your bike. For clarity on the payment terms, please refer to the policy wordings. Remember, third-party bike insurance does not cover total loss. If you do not have a standalone own-damage cover or comprehensive bike insurance, get one from Tata AIG today. We have more than 5400 garages in our network that will provide cashless services to Tata AIG bike insurance policyholders.

What to Do if Your Bike Gets Totaled?

You can scrap your bike once the insurance company declares total loss against it. But you cannot just throw it away and be done with it. You have to follow the two-wheeler scrap policy.

Once you determine that your motorcycle is a total loss, you can sell the parts of your bike to a scrap dealer. The motorcycle will be torn down for repurposing and recycling of parts. Once you have scraped your bike, you ought to cancel your bike's Registration Certificate (RC) as per the RTO rules for scrapping two-wheeler.

Here is some more information about RTO rules for scrapping two-wheeler.

  • Motor Vehicles Act, 1988 (Section 55) makes it mandatory for bike owners to revoke the vehicle’s Registration Certificate after they have scrapped their bike.
  • If the insurance company declares the bike a total loss, the owner should intimate the same to the RTO within 14 days.
  • The RTO then requires clearance from the local police station verifying the selling of bike parts as per the scrapping policy in India.

Why Do I Need to Cancel My Registration?

You may wonder why is it necessary to cancel the registration of a wrecked motorcycle. Well, even in its dilapidated state, you bike bears crucial information like the chassis number and engine number, which are mentioned on the registration. Even after sending your bike for scrap, there are some lingering risks that you must mitigate.

Illegal use of your vehicle

If you don't cancel the Registration Certificate of the wrecked bike, criminals may exploit the bike's documentation. They can fix the bike and utilise it for illegal activities. And since the documents are on your name, you may get in trouble.

Avoid illegal use of theft bikes

If criminals get to know that you have a live RC or registration of a scrapped bike, they may leverage this information. Thieves can change the chassis number and engine number of the stolen bike and match it with your scrapped bike. In that way, the stolen bike will be identified as your bike.

This is why, you have to make sure you are selling your totaled bike to RTO registered scrap vendors. Also, do not forget to obtain the scrap certificate from the vendor. A scrap certificate should have the chassis number and engine number of your bike, and also certifies the disintegration and recycling of your motorcycle parts.

How to Cancel Your Bike's Registration Certificate?

We have already discussed the process of cancellation of bike registration certificate after total loss. However, for reader’s easy understanding, here are some simple steps.

  • The RC cancellation process is quite simple. Here are the steps for the same:
  • Confirm with the two-wheeler insurance provider if the bike is total loss.
  • Report the total loss to the RTO in your state within two weeks or 14 days of total loss declaration.
  • Reach out to RTO registered scrap vendor and negotiate for the price of your bike’s parts.
  • Obtain an affidavit or scrap certificate undersigned by the scrap vendor confirming your bike has been scrapped.
  • The RTO will get a clearance from the police to verify the details of the accident that damaged your bike.
  • The RTO will issue a certificate of non-utilisation

Once you get the certificate of non-utilisation, your bike’s registration will not longer be valid.

In Conclusion

Parting away from your beloved motorcycle is not easy, especially if its your dream bike. But sometimes, the cost of repair can get you a new bike, and scrapping your bike in that situation is the most practical thing to do. But, we suggest you follow all the steps mentioned above to safely dispose of your bike without having any liability towards it whatsoever.

Above everything else, always wear a helmet while riding and get a 360-degree protection by purchasing a comprehensive bike insurance policy.

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Disclaimer / TnC

Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.

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