Cancel Your Bike Registration Certificate After Scrapping

People with a love for bikes must understand the responsibility they carry with them. Since two-wheelers are not as safe as four-wheelers, it becomes more important for bike owners to wear all the protective gear to make sure that they stay safe and sound in case of an unforeseen accident. But, what about your bike? For that, there are bike insurance policies available in the market that can protect you financially in case of damage or loss.

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You can ensure the safety of your bike with two types of insurance policies. Third-person liability insurance and comprehensive insurance, third-party liability insurance is mandatory in India and it provides financial aid for third-party liabilities whereas comprehensive insurance policy provides cover for third-party, own damages, natural calamities, and many other incidents resulting in the damage of your bike.

But, when it is your bad day and natural disaster like a flood or a manmade disaster happens, it either damages your bike partially or leads to a total loss of your bike.

Total Loss of Bike

In a bike insurance policy, the total loss of a bike refers to the situation where the repairing cost of a bike is more than 75% of the insured declared value (IDV) or insured cost of the bike. The insured declared value is the maximum amount a bike insurance policyholder can claim from the insurance company for the damage or loss of the bike. This is why if the insurance company has to pay more than the IDV then it is considered as the case of total loss.

The concept of a total loss of a bike does not apply to third-party liability. The insurer will only pay the IDV for the damage caused by a natural calamity, fire, accident as the maximum amount of claim under the comprehensive car insurance policy.

The bike will be considered as a total loss if the repairing cost comes out more than 100% of the IDV. Your insurer will pay the full insured declared value as the claim amount for the replacement of your bike.

What To Do In Case Of Total Loss Of Bike?

When the bike insurer declares your bike as a total loss then you can sell the remaining parts of your bike to a scrap dealer. The scrap dealer will break the remaining parts of your bike to recycle. If you do so then you will have to cancel the RC of your bike as well.

As per the Motor Vehicle Act, 1988 under Section 55, it is the responsibility of the bike owner to cancel the registration certificate of the bike after scrapping it when the insurer declared it as a total loss. The bike owner must inform the Regional Transport Office within 14 days about the total loss. Then RTO will cancel the RC of the bike. Then your bike will be nothing but a scrap material and the RC will not be registered to anyone else.

The cancellation of RC will be completed when the police will send a clearance report to the RTO. Once it is cancelled, RTO will issue a non-utilization certificate for the bike within 4-5 weeks. The rules and cancellation fee will vary according to the state.

Importance of Cancellation of RC In Total Loss Of Bike

It is very important to cancel the RC of the bike in case of total loss. Here are some of the reasons:

Misuse of Damaged Bike Documents

In a road accident or due to any natural calamity that completely destroyed the bike and the insurance company declares it a total loss then it is important to cancel the RC of that bike. If you do not cancel the RC of the scrapped bike then fraudulent and thieves can misuse those documents of the bike. They can use the documents of your scrapped bike and give a new identity to a stolen bike or that has been used in any illegal activity.

Vehicle Theft Can Be Prevented

When you sell your bike to a scrap dealer without cancelling the Registration Certificate, the criminals look at it as an opportunity. When a thief steals a bike, they try to hide it in plain sight. They change the identity of the stolen bike with your RC, its engine number and chassis number and then replace it with the one they stole. But if you cancel the RC then these activities can be put to an end.

How To Cancel The RC?

In case your insurance company has declared your bike as a total loss then you can begin the cancellation process of your bike’s RC. You can follow the procedure mentioned below:

  • Sell your bike to a scrap dealer

  • The dealer will provide you the chassis number after cutting the parts and it will be proof that your bike has been scrapped.

  • Go and get an affidavit made that declares your bike has been scrapped

  • Inform about this to the RTO

  • Submit documents to the RTO

  • The RTO will get the clearance from the police station and then they will cancel the registration of the car and RC

  • Then the report will be transferred to the original RTO where the bike got registered in the first place

  • That RTO will cancel the registration certificate

  • They will inform you when the RC is cancelled

  • Then you will get a non-utilization certificate for your bike from the RTO

Documents Required To Cancel the RC

You will have to provide the below-mentioned documents to the RTO.

  • Registration certificate of the scrapped bike

  • Cutting of Chassis number from the scrapped bike

  • Affidavit that states the bike is scrapped

  • Comprehensive and Third-party insurance of your bike

  • PUC certificate of your scrapped bike

Make Sure Of These Things

You will have to keep certain important things in mind when you go for the cancellation of your bike’s RC.

  • Inform your RTO within 14 days of scrapping your bike.

  • Make sure you have third-party liability and comprehensive insurance policy for a smooth cancellation process

  • Make sure you have renewed the bike insurance to raise the claim.

Conclusion

To raise the claim you need to make sure that you renew your insurance policy before the expiration date. Everything depends on the insurance policy and it has to be active. It is recommended that you purchase the insurance online because then you can renew your insurance policy online. Also, make sure that you cancel the RC after scrapping your bike otherwise you might have to face any legal trouble in the future.

Written By: PolicyBazaar - Updated: 01 September 2021
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Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.
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