The Vehicle Scrappage Policy aims to reduce emissions and enhance safety by retiring outdated or unfit vehicles. If your car qualifies for scrappage and its registration expires, it will be recycled in an eco-friendly manner. Check with your car insurance provider for any adjustments or updates due to this policy change. Car insurance benefits include coverage for damages, medical expenses, and liability protection, providing drivers with financial security and peace of mind. Claims are subject to terms and conditions set forth under the motor insurance policy. *
What Effect Does Car Scrapping Have On Insurance?
Personal and commercial cars over 15 years old will be de-registered per the scrappage scheme. After testing, those who pass can be re-registered, and those who don’t must be discarded.
This is how car insurance is affected when you scrap your vehicle.
The scrappage of unfit cars provides car manufacturers with affordable industrial materials like aluminium, copper, steel, rubber, and plastic, potentially reducing vehicle production costs. This may lead to lower insurance costs as the car’s market value influences the Insured Declared Value (IDV). ##
The scrappage scheme, targeting older and unfit cars, aims to lower third-party claims and decrease insurers’ Incurred Claim Ratio (ICR) by removing these vehicles.
Do I Have To Revoke My Insurance Before I Junk My Car?
You must obtain the cancellation of your vehicle’s registration certificate from the relevant Regional Transport Office (RTO) before notifying your insurer of the policy cancellation. You must notify your insurance provider of cancelling your new car insurance policy as soon as it is done. Should your policy be refunded, the amount will be determined pro rata. However, you cannot cancel the policy if you have filed a claim during the current policy year.
Consequences Of Keeping Your Car Insurance Active After Scrapping Your Vehicle
If your car is being scrapped, you must cancel your Registration Certificate (RC) at the appropriate RTO.
Here’s why you need to notify your insurance provider about the scrappage of your car and cancel the RC.
Misuse Of Vehicle Documents: The RC must be cancelled immediately when the vehicle is scrapped. Fraudulent individuals might use the vehicle’s paperwork if it needs to be balanced. The documents may reveal the identity of a car used for illicit activity or a stolen vehicle.
Prevent Car Theft: If you fail to cancel the RC, thieves may use the scrapped car’s paperwork as collateral for a stolen vehicle. You can prevent car theft by turning off the car’s remote control.
Once you cancel the car’s RC at the appropriate RTO, notify your insurance provider that your policy has been cancelled.
Refund For Car Insurance On A Junk Vehicle
After scrapping your car, cancel the remote control and wait for the RTO to cancel the RC before cancelling your insurance policy. Refunds are issued pro rata, but none are provided if claims were filed during that policy period. Regardless of claim history, it’s essential to deactivate the new car insurance once the vehicle’s registration is cancelled. Ensure you always renew your car insurance on time to avail of the refund.
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## All savings are provided by the insurer as per the IRDAI-approved insurance plan.
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