Vehicles that are old or inefficient are major contributors to carbon dioxide emissions. People travelling in old vehicles are not safe either. According to studies, older vehicles pollute the environment by 10 to 12 per cent more than newer vehicles. Not to mention that older automobiles are more dangerous and more prone to malfunctions and accidents.
The government has implemented a Vehicle Scrappage Policy to reduce traffic pollution and improve passenger safety. When the car's registration expires and it is determined to be unfit, it will be scrapped in an environmentally responsible manner. What does this new adjustment mean for you if you possess auto insurance?
But before we try to look at the effects on motor insurance, let�s get a brief overview of the new Scrappage policy. As the name implies, this programme will identify automobiles that are inappropriate to drive on roadways because they emit carbon emissions and pollute the environment. This approach will not only minimize pollution but will also have numerous other advantages. Plastic, steel, and other metals will all benefit from the recycling of these cars. With this policy, production costs will be decreased as well. This will boost automobile sales in India since you will receive incentives for purchasing a new vehicle when you recycle your old car.
Personal cars older than 20 years and commercial cars older than 15 will be de-registered under the new vehicle Scrappage scheme. Then they're tested, and the ones that pass can be re-registered, while the ones that fail must be discarded.
The following could be the ways car scrapping can impact insurance
You must have your car's Registration Certificate cancelled at the appropriate Regional Transport Office before notifying your insurer about the cancellation of your coverage. You must notify your insurer of the cancellation of your automobile insurance coverage once it has been cancelled. Your policy will be refunded on a pro-rata basis if you receive a refund. You cannot, however, terminate your insurance if you have claimed during the current policy year.
If your car is scrapped, you must get your Vehicle Registration Certificate (RC) cancelled with the appropriate RTO. Take a look at why you should cancel your car's RC and notify your insurer that it has been scrapped.
Document misuse: The RC must be terminated promptly once the car has been scrapped. Fraudulent people may be able to exploit the car's documents if it is not cancelled. The documents can be used to identify a car that has been used for criminal purposes or a vehicle that has been stolen.
Theft prevention: If you don't cancel the RC, criminals may use the scrapped car's papers as papers of a stolen vehicle. You can assist in preventing vehicle thefts by de-registering the car's RC.
Do not forget to inform your insurer about the cancellation of the policy once the registration certificate is de-registered at the respective regional transport office
As previously stated, once a car is scrapped, its registration certificate has to be terminated at the earliest. Once you receive a deregistration confirmation from the regional transport office go ahead and cancel your insurance coverage. Refunds are always calculated based on the time left on the current policy. If any claim has been initiated in this period then reimbursement will not be processed. The policy must be terminated irrespective of the fact that a claim was filed or not. If the vehicle registration is cancelled, it is critical to deactivating the car insurance coverage.