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Motor Blog
16 Aug 2022
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The Ministry of Road Transport and Highways (MoRTH) implemented the Vehicle Scrappage policy in the budget laid down in February 2021. According to the policy, every vehicle past its validity of registration must undergo a fitness test to attain its renewal. Upon failure, it would get scrapped. This policy helps keep the old and unfit vehicles off the road, paving way for a greener and cleaner environment. Now, if you are an owner of an old car that either has an expired registration certificate or is nearing expiry, you have two options — to renew its registration or scrap it. If you choose the latter option of scrapping it, you will need to keep in mind its impact on the car insurance plan.
As per the Motor Scrappage Policy, vehicles older than 15 or 20 years, depending on the type of vehicle, need to be de-registered and scrapped upon failing the fitness test. Here’s how it impacts your car insurance:
* Standard T&C Apply Thus, whenever opting for the scrapping of your vehicle, there are two important things to do: cancelling your vehicle’s registration certificate (RC) and also cancelling its active insurance cover.
There are two main reasons why RC cancellation is an essential step in the vehicle scrappage process:
Not cancelling the RC before scrapping your vehicle can lead to misuse of the registration details by fraudulent individuals for criminal or illegal activities. Hence, it must be cancelled without skipping this requirement.
Cancelling the RC helps prevent criminals from using your vehicle’s documents for a stolen car. This in turn helps avoid theft. * Standard T&C Apply
After cancelling the RC of your car, you can apply to the insurance company for any refunds of the premium paid on a proportionate basis. However, if you have made any claims, no refunds shall be issued. Thus, it is essential to cancel not just the registration but also inform the insurance company of the same. In case you choose to renew the registration by passing the fitness test, make sure to purchase a robust car insurance plan. In this process, using a car insurance calculator will help to evaluate several plans and pick one that fits your right. * Standard T&C Apply Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.
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