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Why cancelling your RC is crucial in case of total damage ?

In extreme cases of accidents, where the vehicle gets completely damaged, the owners tend to sell the remains of the destroyed vehicle to the scrap dealers without remembering to cancel their RC. Documents pertaining to such vehicles are misused by fraudsters to give a new identity to stolen vehicles by forging the chassis number and engine number.

According to Section 55 of the Motor Vehicle Act 1988, it is the responsibility of the owner of a destroyed vehicle that has undergone Total Loss (TL) to get the Certificate of Registration (RC) cancelled. For the purpose, the owner has to inform the registering authority about the total loss of the vehicle within 14 days. Thereafter, the registering authority shall cancel the registration.

The moment your RC is cancelled, the vehicle will be considered as scrap and will no longer be registered to anyone. This legal process is carried out by the State Regional Transport Office (RTO). Therefore, the fees and sales vary from one state to another. The RC cancellation process will be completed after obtaining a clearance from the concerned authorities. Simultaneously, the RTO will issue a certificate of non-utilization within a period of four to five weeks.

Last but not the least, stay clear on the concept of 'total loss' of vehicles. While claiming for total loss, you should understand that your vehicle will be certified as a 'total loss' vehicle only if the repair cost is more than 75% of the Insured Declared Value. This is the maximum amount that an insurer can claim on  motor insurance for compensating any losses incurred due to accident.

This is to safeguard you from fraudulent activity wherein your damaged car parts are misused. So ensure you follow this protocol diligently to avoid facing criminal charges or other grave consequences.

Disclaimer: The above information is for illustrative purpose only. For more details,please refer to policy wordings and prospectus before concluding the sales.

This blog has been written by

S. Gopalakrishnan | Motor Insurance Expert | 40+years of experience in insurance industry

A veteran in insurance industry. S. Gopalakrishnan is a name to reckon with in the field of reinsurance,he has headed the Reinsurance department and has rich experience in other fields of motor insurance. He loves to share his opinion on latest topics in the insurance industry and how he can help people in safeguarding their assets using insurance products.

S. Gopalakrishnan recommends "HDFC ERGO for your vehicle insurance needs, it has always put customer’s interest at the forefront, with round the clock assistance to deal with emergency breakdown issues and hassle free claims process. You can be assured of complete and reliable guidance through the whole process".


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