The IRDAI move follows misuse of RC of stolen vehicles and those which are being sold to scrap dealers. (Representational)The Insurance Regulatory and Development Authority of India (IRDAI) has asked insurance companies to ensure cancellation of Certificate of Registration (RC) of the vehicle in case of total loss claim settlement.
The IRDAI move follows misuse of RC of stolen vehicles and those which are being sold to scrap dealers. “It has come to the notice of the IRDAI that in the case of total loss (TL) of the vehicle, salvage of the vehicle is being sold to scrap dealers without cancelling Certificate of Registration of the vehicle,” IRDAI said in a notification.
According to IRDAI, it has been informed by the law enforcement authorities that documents pertaining to such vehicles are being misused like giving new identity to the stolen vehicles by forging engine number and chassis number of destroyed vehicles under TL claims. As per Section 55 of Motor Vehicle Act 1988, if a motor vehicle has been destroyed or has been rendered permanently incapable of use, the owner should, within 14 days or as soon as may be, report the fact to the registering authority within whose jurisdiction he has the residence or place of business where the vehicle is normally kept.
Move to prevent misuse of info
The move comes as documents pertaining to vehicles under total loss (TL) claim are being misused like giving new identity to stolen vehicles by forging engine number and chassis number of such destroyed vehicles, IRDAI saidit has been informed by the law enforcement authorities
They should also forward to the registering authority the certificate of registration of the vehicle, it said. The registering authority should cancel registration and certificate of registration, it said.
If a vehicle is stolen, the owner must inform the police and the insurance company immediately. Under a motor insurance policy, there are two major components: Third-party insurance and Own Damage Insurance.
As per The Motor Vehicles Act, 1988, it is mandatory to insure vehicles with at least third-party insurance cover. OD covers loss or damage to the vehicle insured due to accident including fire and theft. Third party covers any damage or injury caused by the insured, to another person or property.
Last month, IRDAI had asked general insurers to make available stand-alone annual Own Damage (OD) covers (including stand-alone OD cover for fire or theft if opted for by the policyholder) for cars and two-wheelers.The new regulation will be applicable for both new and old vehicles.
