To put a check on cases of fraudulent car registration, the Insurance Regulatory and Development Authority of India (IRDAI) has mandated the cancellation of Certificate of Registration (RC) in case of total loss claim settlement. The move is aimed to safeguard the interests of used car buyers.
IRDAI’s mandate is expected to bring down cases of fraudulent registration of used vehicles
IRDAI has also made it mandatory for all general insurance companies to ensure that in case of total loss (TL) claim settlement, the car’s documents are not misused over a stolen vehicle’s Certificate of Registration (RC).
Note that a case of fraud begins when a car undergoes Total Loss (TL) and its remains are sold to scrap dealers without the cancellation of its 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.
Hence, it is in the best interest of buyers of pre-owned cars to be vigilant while purchasing a vehicle from a dealer or directly from the owner. They should check all the details of the Certificate of Registration (RC) to make sure that the engine number and chassis number are not forged so as to avoid any kind of fraud.
*Source: Financial Express
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