What is a Bike’s Total Loss (TL)?
Total loss of a bike under a bike insurance policy occurs when the cost of repairs exceeds 75% of the vehicle’s Insured Declared Value (IDV). The IDV is the maximum amount a policyholder can claim from the insurance provider for damage or loss of the motorcycle. The loss is called total if the insurance must pay more than the IDV. *
Third-party liability is not subject to the total loss of a bike. Under the comprehensive bike insurance policy, the insurer will only pay the IDV for damages brought on by a natural disaster, fire, theft, or accident. It’s good to learn how to claim insurance for bike in such cases.*
What to Do in the event of Complete Bike Loss?
If your motorcycle insurance provider declares your vehicle a total loss, you can sell the remaining components to a scrap dealer. You can quickly locate two-wheeler scrap dealers in your area. The scrap merchant can recycle the leftover components.*
RTO Regulations for the Disposal of Two-Wheelers
The bike owner must report the complete loss to the Regional Transport Office (RTO) within fourteen days. The RTO will, after that, cancel the registration certificate (RC) of the bike. Eventually, your bike may be reduced to scrap, and the RC will no longer be registered to anyone.*
Cancelling the RC of a Bike
If your insurance provider has declared your motorcycle a total loss, you can begin cancelling your RC membership. To cancel a bike’s registration, please follow the steps outlined below:
- Locate a nearby two-wheeler scrap dealer and sell your damaged bike to them.
- After removing the recyclable components, the dealer will provide you with the chassis number to document that your motorcycle has been scrapped.
- Get an affidavit stating that your bike has been destroyed next.
- Notify the nearest RTO about the situation.
- Send required documentation to the closest RTO for scrappage.
- The nearest RTO will verify all those documents and obtain permission from the police station. Your bike’s RC will then be cancelled.
- Next, the report will be transferred to the RTO, where the motorcycle was initially registered.
- That original RTO will cancel the RC.
- When the RC is cancelled, they will notify you. The RTO will subsequently issue you a non-utilisation certificate for your motorcycle.
Significance of RC Cancellation in Complete Bike Loss
Cancelling the motorcycle’s registration certificate is vital in the event of catastrophic loss. Here are some of the reasons why you should exercise extreme caution while cancelling the RC of a totalled motorcycle: –
- Avoid Unauthorised Use of Damaged Bike Documentation
If a motorcycle is destroyed in a traffic collision or due to a natural disaster, the insurance company classifies it as a Complete Loss (TL). You must then cancel the motorcycle’s registration as a bike owner.*
If you do not cancel the RC of the demolished motorcycle, there could be a danger that fraudsters or thieves will misuse the motorcycle’s paperwork.
- Bike Theft Prevention
Robbers typically seize the opportunity when you sell your motorcycle to a scrap dealer without cancelling the RC. A bike thief tries to conceal it in plain sight when they steal it. Your RC, engine number, and chassis number are used to replace the stolen bike, which is then given a new identity. But, if you cancel the RC, these actions will cease.*
Cancelling your totalled bike registration is essential to protect it from fraudulent or criminal activity. Also, ensure that your bike insurance policy has been updated on time so that you can increase the total loss covered by your comprehensive bike insurance policy. You can do that by paying your bike insurance premium on time. *
* Standard T&C Apply
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.