Does Scrapping Car Impact Insurance Policy?
Updated On Oct 17, 2023
If you own an older vehicle and are concerned that it will be scrapped will have an impact on your auto insurance coverage? To find out the solution, read this article.
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A scrapped car is one that has been extensively damaged and is no longer repairable. It is only worth the weight of its constituent components, such as rubber, glass, and iron. The government's vehicle scrappage policy established certain standards for how outdated cars should be destroyed or abandoned. Old cars will be required to pass a mandatory fitness test under this initiative, and those that pass will be re-registered, while those that fail will be scrapped. A 15-year-old car will be required to obtain a valid fitness certificate in order to renew its registration license for another five years under the new government policy. The car scrappage policy will aid in the disposal of outdated, inoperable, and inappropriate cars. It takes effect immediately once the car's registration period has expired.
Is It True That Scrapping A Car Has An Impact On Insurance?
Scrapping a car will almost certainly have an impact on car insurance premiums. It is always unsafe to drive an old and unsuited car, which increases the responsibility of motor insurance companies, for which they demand a higher price. However, after the car has been demolished, you will not be required to pay a hefty premium for car insurance. You can use a car insurance premium calculator to estimate the cost of renewing your old vehicle. In the instance of a totaled car, which refers to vehicles whose repair expenses exceed their market value, your car insurance provider may make you an offer to buy the vehicle. If your car is demolished, however, the insurance will reimburse you for the car's worth in addition to the money they receive from the junkyard. However, if you opt to keep your totaled car instead of having it destroyed, you will receive a lower payout since the value of the junk metal will be excluded. As a result, wrecking your totaled car may result in a bigger claim from your insurance company.
Should You Cancel Your Car Insurance Before Scrapping It?
Everyone must get their car's Registration Certificate (RC) revoked before having it demolished in India, according to Indian automotive legislation. In the event of total damage, the car owner is responsible for canceling the RC. It aids in the tracking of cars that are no longer in service. Because a car's RC does not alter with its ownership, canceling the RC refers to the scrapped and useless version of the vehicle. You must also terminate your auto insurance plan after destroying the car, as this helps prevent the theft and abuse of your car's documentation. Your auto insurance policy premium will be refunded on a pro-rata basis. However, if you filed a claim during that policy year, you will not be able to terminate your policy.
In India, scrapping outdated and inoperable vehicles has become a legal requirement. It is not only environmentally advantageous to trash an unsafe car, but it is also safer to avoid driving it on the road. It also has an influence on insurance policies in a variety of ways, as detailed in the preceding article. We hope that this information will assist you in dealing with your insurance coverage in the event that you have to scrap your vehicle.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.