Four Wheeler Insurance

Return to Invoice Cover (RTI) in Car Insurance

What is RTI in Car Insurance? Return to Invoice, RTI is an add-on cover that is offered with the comprehensive car insurance plan. This add-on is exclusively available to cars that are new or less…

What is RTI in Car Insurance?

Return to Invoice, RTI is an add-on cover that is offered with the comprehensive car insurance plan. This add-on is exclusively available to cars that are new or less than three years old. The cover provides full compensation to the policyholder if the car gets stolen or damaged before repair. The compensation value is based on the last complete cost of the vehicle.

Some people are excessively obsessed with their new car. They make sure that the car does not even get a scratch due to anything. However, one is not always aware of the potential dangers that might cause harm to the vehicle shortly. There can be road accidents or theft and can cause damage beyond repair. If you want to avoid the same, Return to Invoice cover is exclusively made for you and your car. Let us tell you more about RPA and how you can avail of the benefits of this add-on.

Return to Invoice Cover Benefits

Provides cushion and support to your basic car insurance by enhancing better protection from total damage or theft.

  • It helps you in saving expenses that you may sustain when your car gets stolen. RPA provides benefits as compensation; the insurer offers that. The sum is based upon the value of your last Invoice without any depreciation. In case you repurchase a new vehicle, having RPA by your side will save you the road tax.
  • If your vehicle meets with a mishap that may lead to damage beyond repair, the insurer will provide you with the same model of the car, the cost of which will be based on the value of your last Invoice.

How Does Return to Invoice Cover work?

The comprehensive car insurance plan aims at protecting the vehicle by providing you with the expenses caused due to the damage, but it would not fetch you the actual value of the car. The rate of depreciation applies once the vehicle gets six months old. 5% of depreciation is involved in such a case, which increases to 10% when the car turns a year old. With such an increase in the depreciation value, you never get the full benefit and lose a considerable amount. However, such is not the case with RPA. Having Return with Invoice with your basic motor insurance plan will fetch you the actual on-road amount, based on the last invoice value if your vehicle gets stolen away or if it suffers damage beyond repair. 

When is the Return to Invoice Cover applicable?

Return to Invoice is not an option to cover the small dents and scratches that your car may suffer in daily commuting. You may look for other add ons such as own damage cover or partial depreciation for such minor problems. 

RPA helps in getting you the full value of the vehicle in case it gets stolen or meets with a dreadful accident. The damage beyond repairs can be well taken off by the RPA, as it will cover your financial losses. So, if your locality does not have secure parking, or you want to be extra cautious about the unfortunate accidents that might damage your new car, you can consider buying this ass-on.

When is the RTI Cover not applicable?

In the case of the following situations, The Return to Invoice Cover is not applicable:

  • If the car has been in use for more than three years.
  • Suppose the damage of the vehicle can be repaired. RTI only covers for the cars that get damaged beyond repair.
  • If your vehicle is stolen, but you have not registered a FIR or police complaint regarding the same. RTI is valid for stolen cars, but the claim process will require proper and relevant documents to go further with it.

How to calculate Return to Investment?

Buying a new car requires you to pay an “on-road price” that is inclusive of the ex-showroom price added along with the Road Tax. These registration charges vary according to the model/manufacturer of the car and add to the billing amount. However, after paying all these charges, you still get a lesser value on your IDV, and this is unfair.

But to make it fair, the add-on named RTI cover can help you precisely get the amount you paid for, that is the “on-road” Price. In simple words, if your vehicle gets damaged beyond repair or gets stolen away, you get the same amount that you have paid to buy it as compensation. 

However, when you approach the company to claim a total loss, constructive loss, or total theft, the insurer provides compensation that weighs lower amongst the following two values.

The cost of the vehicle is inclusive of one, the ex-Showroom Price, second, the Road Tax, and the Registration Charges at the time of the purchase. 

In case of total damage beyond repair, the company looks for the same model with the current replacement price, which is inclusive of the Ex-Showroom Price, the Road Tax, and the Registration Charges.

How much does Return to Invoice costs?

The add on option that provides you cover amounting to the actual Price of the vehicle generally costs around 10% more than your comprehensive policy plan.

Who should opt for a Return to Invoice protection cover?

A Return to Invoice cover is exclusively developed for people who have purchased a new car or have not completed five years yet.

Return to Invoice cover- Validity

Return to Invoice protection cover gets expired after a few policy renewals. Hence, it is not going to protect you always. An RTI cover is exclusively developed to make up for the financial loss that may suffer in case the car gets stolen or damaged beyond repair. The insurer has to provide you with the actual amount, that can sometimes be more than vehicle’s market value (current scenario), especially in cases where the car has already suffered some wear and tear over the period.

Since the Invoice covers on-road prices, including registration costs and road tax, it is a loss for the insurance provider most of the time. When there is a claim through RTI for the vehicle’s theft or an accident that has damaged the car beyond repair, the company is bound to pay you the invoice cover with full charges under the above specifics. Thus, Return to Invoice cover saves you from suffering substantial financial losses.

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