Return to Invoice (RTI) cover is an add-on feature offered by car insurance providers in India. It is designed to provide policyholders with financial protection in case of theft or total loss of their vehicle. With RTI cover, policyholders receive the full invoice value of their car in the event of a total loss, rather than the depreciated value that regular insurance would provide. The purpose of RTI cover is to bridge the gap between the market value of the vehicle at the time of loss and the original purchase price mentioned in the invoice. It ensures that policyholders are not financially burdened by the depreciation of their vehicles over time.
Return to Invoice (RTI) cover is an add-on feature offered by car insurance providers in India. It is designed to provide policyholders with financial protection in case of theft or total loss of their vehicle. With RTI cover, policyholders receive the full invoice value of their car in the event of a total loss, rather than the depreciated value that regular insurance would provide. The purpose of RTI cover is to bridge the gap between the market value of the vehicle at the time of loss and the original purchase price mentioned in the invoice. It ensures that policyholders are not financially burdened by the depreciation of their vehicles over time.
Benefits:-
By opting for RTI coverage, policyholders can enjoy an added level of confidence knowing that they are protected against unforeseen events that can result in significant financial loss. It provides a safety net that goes beyond the basic coverage offered by standard insurance policies, making it a valuable addition for car owners in India.
- Full Reimbursement of the Vehicle's Invoice Value:
One of the key benefits of RTI cover is that it offers policyholders full reimbursement of the vehicle's invoice value in case of theft or total loss. This means that regardless of the depreciation that the car may have undergone, policyholders will receive the exact amount mentioned in the purchase invoice. This ensures that policyholders can recover their original investment and are not financially impacted by the loss.
- Protection against Financial Loss Due to Theft or Total Loss:
RTI cover provides an additional layer of protection against the financial loss that can occur due to theft or total loss of the vehicle. In such unfortunate circumstances, policyholders may face a significant financial setback if their regular insurance policy only provides reimbursement based on the depreciated value. RTI cover helps mitigate this risk by guaranteeing the full invoice value, allowing policyholders to replace their vehicle without suffering a substantial financial burden.
- Enhanced Coverage Compared to Standard Insurance:
RTI cover offers enhanced coverage compared to standard car insurance policies. While regular insurance focuses on repairs and replacements based on market value, RTI cover specifically addresses the gap between the depreciated value and the original purchase price. This means that policyholders with RTI coverage have broader coverage and greater financial security in situations of theft or total loss.
Exclusions:
While the specifics can vary based on the insurance provider, there are common exclusions and scenarios not covered by RTI cover, which may include:
- Mechanical or Electrical Breakdown: RTI cover typically does not cover repairs or replacements required due to mechanical or electrical breakdown of the vehicle.
- Wear and Tear: Expenses related to normal wear and tear of the vehicle, including routine maintenance, servicing, or RTI cover does, generally not cover the replacement of consumables.
- Intentional Damage or Negligence: Damages caused intentionally or due to negligence, such as driving under the influence of alcohol or violating traffic rules, may not be covered under RTI.
- Acts of War or Terrorism: Damages or losses arising from acts of war, terrorism, riots, or civil unrest may be excluded from RTI coverage.
- Damage during Illegal Activities: If the vehicle is involved in illegal activities at the time of the incident, such as smuggling or unauthorized use, the RTI cover may be voided.
- Small Claims: Small claims under your car insurance policy are not covered under the RTI cover
- IDV Value: If the claim amount is less than 75% of the total IDV value.
What is RTI in Car Insurance?
Return to invoice cover is an add-on available under the own damage section of the car insurance policy. The issue with comprehensive car insurance is that it does not cover depreciation in case of total damage to the car. In a total loss scenario, if you have comprehensive insurance the Insured Declared Value (IDV) will be paid to you. This claim amount would not be sufficient to purchase another car.
The Return to Invoice add-on covers the gap between the IDV and the invoice value of the car along with the registration charges and other applicable road taxes. Return to invoice add-on helps in fetching the invoice price of the car at the time of total loss or constructive total loss.
“RTI Claim Amount = (Ex-showroom price + Registration Charges + Road Tax) = On-Road Price”
Let us understand each and every term associated with the Return to invoice option:-
- Insured Declared Value: Insured declared value is the value of the car taken for the purpose of insurance and is the maximum liability of the insurer in case your car is stolen or is damaged beyond repair.
- Total Loss: Total loss is applicable when the car is theft or completely damaged without any value for salvage. In case your car is stolen and cannot be recovered, then it is considered as a total loss situation.
- Constructive Total Loss: Constructive total loss is applicable when your car is damaged due to an accident and the repair costs exceed 75% of the Insured declared value. In such scenarios the invoice price of the car is paid to the insured if the RTI add-on was opted at the time of policy issuance.
- Ex-showroom Price: It is the price at which the car is manufactured in the plant and the transport cost included to bring it to the showroom The applicable taxes are also included in the Ex-showroom price before displaying it to the general public. The ex-showroom price also include dealer’s margin for the sale made.
- Road Tax & Registration Charges: Road tax is the amount paid to the particular state government in which you intend to drive the vehicle. The registration charges are paid to the government for registering the vehicle in your name. These charges vary from state to state and are to be paid each time a new vehicle is registered.
If opted for Return to Invoice cover, in case of total loss or constructive total loss the invoice price of the car is paid to the policyholder.
Example:-
RTI is a better option in case of theft or total damage to a vehicle. If your area is prone to car theft, then it is highly advisable to have an RTI add-on to your comprehensive insurance policy. The cost of the Return to Invoice add-on is almost 10% of the comprehensive insurance premium. The RTI cover is available only up to 2 years of vehicle age and in some cases up to 3 years of vehicle age.
For instance, Mr. Harris has purchased a brand new car worth Rs.8 Lacs and is insured with XYZ insurance company for an IDV of Rs.7.6 Lacs. He ignored the insurance agent’s advice to opt for the Return to Invoice add-on and has taken only the Zero depreciation add-on cover. He parked his car outside his house and left for a family function in another town. After returning from the function he found that his car was stolen and informed his insurance company.
Since it was a total loss claim and the car was not traced, the insurance company paid him the IDV value, which was Rs.7.6 Lacs. Now Harris has to contribute around Rs.1.5 Lac for purchasing the same model car from the market. Had he opted for the Return to Invoice cover, he would have been paid the Invoice price of the car thereby saving himself from the extra burden of payment. The 4-wheeler car insurance premium for AUDI A4 insurance starts from Rs.7,890 for only third-party insurance and goes up to Rs.1.5 Lacs for comprehensive insurance cover including the add-ons such as bumper-to-bumper and engine protection.
How to Avail Return to Invoice Cover in Car Insurance?
To avail of Return to Invoice (RTI) coverage, certain qualification criteria may apply, which can vary slightly depending on the insurance provider. Generally, the following criteria are commonly considered:
- Age of the vehicle: RTI cover is typically available for new or recently purchased vehicles. The age limit may vary, but it is often offered for vehicles up to a certain age, such as one or two years from the date of purchase.
- Insurance policy type: RTI cover is usually available as an add-on to comprehensive car insurance policies. It may not be applicable for third party only or basic third-party with their own damage policies.
- The purchase value of the vehicle: The purchase price of the vehicle, as mentioned in the invoice, is an important factor in determining eligibility for RTI cover. There might be minimum and maximum value limits specified by the insurance provider.
- Research and selection: Begin by researching insurance providers that offer RTI coverage as an add-on. Compare their offerings, terms, and conditions to choose the one that best suits your needs.
- Application: When purchasing or renewing your car insurance policy, inform the insurance provider about your intention to include RTI coverage. This can usually be done through the insurance company's website, offline agents, or customer service channels.
- Documentation: You may be required to provide certain documentation to support your application for RTI cover. This typically includes the purchase invoice of the vehicle, vehicle registration papers, and any other documents as specified by the insurance provider.
- Premium payment: Pay the additional premium for RTI cover along with the regular premium for your car insurance policy. The premium amount for RTI coverage varies depending on factors such as the value of the vehicle and the insurance provider's pricing structure.
- Policy issuance: Once the application and documentation process is completed, the insurance company will issue your car insurance policy with the added RTI cover. Make sure to review the policy document carefully to ensure that it includes the RTI cover as requested.
- Claim settlement conditions: In case of theft or total loss, policyholders are generally required to inform the insurance company promptly and follow the necessary claim settlement procedures. Failure to adhere to these conditions may impact the eligibility for reimbursement under the RTI cover.
It is essential for policyholders to carefully review the terms and conditions of RTI coverage provided by their insurance provider to understand the specific eligibility criteria, requirements, and restrictions associated with the coverage.
How Return to Invoice differs from regular car insurance?
depreciated value of the vehicle when settling claims for theft or total loss. This means that policyholders may receive a reimbursement that is lower than the actual purchase price of the car. In contrast, RTI cover offers a higher level of protection by guaranteeing the full invoice value of the vehicle in case of theft or total loss, regardless of depreciation. It helps policyholders recover their original investment and provides greater financial security.
While regular car insurance focuses on repairs or replacements based on the market value, RTI cover specifically addresses the financial gap between the original purchase price and the depreciated value. It ensures that policyholders are not left out of pocket and can replace their vehicle with a similar model or make a down payment for a new car. Overall, RTI cover acts as a valuable supplement to regular car insurance, providing policyholders with enhanced protection and peace of mind in situations where their vehicle is stolen or completely written off.
|
Distinguish |
Return to Invoice (RTI) Cover |
Regular Car Insurance |
| Purpose |
Ensures full reimbursement of invoice value in case of theft or total loss
|
Provides coverage for damages, repairs or replacements based on market value |
| Reimbursement
|
Full invoice value
|
Depreciated value of the vehicle |
| Protection
|
Protection against financial loss due to theft or total loss
|
Protection against damages and losses due to accidents, natural calamities, and other covered events, and other covered events |
| Coverage |
Enhanced coverage beyond market value |
Coverage based on market value at the time of loss |
| Eligibility |
Available as an add-on to comprehensive car insurance policies |
Standard coverage available for all types of car insurance policies |
| Premium |
Additional premium cost
|
Standard premium based on various factors such as vehicle type, age, etc. |
| Claim Settlement |
Full reimbursement of the invoice value |
Settlement based on market value and terms of the insurance policy |
| Financial Impact
|
Minimizes financial loss for policyholders in case of theft or total loss |
Potential financial impact due to depreciation and market value |
It is important to note that the specifics may vary based on the insurance provider and policy terms. This table provides a general overview of the key differences between RTI cover and regular car insurance.
Why it is important to have RTI Cover in Car Insurance?
Having RTI (Return to Invoice) cover in car insurance is important for several reasons:
- Financial Protection: RTI cover provides an additional layer of financial protection in case your car is stolen or declared a total loss (written off) due to an accident. In such situations, the standard comprehensive car insurance policy typically reimburses you for the current market value of the car, which may be significantly lower than the original purchase price. RTI covers bridges this gap by ensuring you receive the invoice value of your car, including taxes and registration fees.
- Value Preservation: With RTI cover, you can preserve the value of your investment in the car. Vehicles tend to depreciate over time, and in the event of a total loss, you may suffer a substantial financial loss if you receive only the depreciated value. RTI cover ensures that you can replace your vehicle with a new one of the same make and model, without being significantly out of pocket.
- Peace of Mind: Having RTI cover offers peace of mind, knowing that you are financially protected against a total loss scenario. It eliminates the worry of being left with a significant financial burden or having to compromise on the quality of your next vehicle purchase.
- Higher Claim Settlement: RTI cover can expedite the claim settlement process. Since the insured amount is based on the invoice value, there is less room for negotiation or dispute regarding the car's worth at the time of loss. This can result in a smoother and quicker settlement process, helping you get back on the road faster.
- Enhanced Coverage: RTI cover is typically available as an add-on or optional coverage with comprehensive car insurance. By opting for this additional coverage, you enhance the overall protection offered by your policy, making it more comprehensive and robust.
It's worth noting that the availability and terms of RTI coverage may vary between insurance providers and policies. It is important to review and understand the terms and conditions of your insurance policy, including any add-ons or optional covers, to ensure you have the desired level of protection for your car.
Comparison with other Car Insurance Add-ons:
|
Return to Invoice (RTI) Cover |
Zero Depreciation Cover |
Engine Protect Cover |
| Purpose |
Ensures full reimbursement of invoice value in case of theft or total loss |
Provides coverage for repairs or replacements without factoring in depreciation |
Offers coverage specifically for damage to the engine |
| Coverage |
Financial protection against depreciation and loss |
Protection against repair costs due to depreciation |
Coverage for repair costs in case of engine damage |
| Reimbursement |
Full invoice value |
Cost of repairs without depreciation deduction |
Cost of repairs due to engine damage |
| Eligibility |
Available for new or recently purchased vehicles |
Generally available for vehicles up to a certain age |
Available for vehicles of various ages |
| Premium |
Additional premium cost |
Higher premium compared to standard car insurance |
Additional premium cost |
| Claim Settlement |
Full reimbursement of invoice value |
Full reimbursement of repair costs without depreciation |
Reimbursement for repair costs due to engine damage |
| Limitations |
May have age restrictions for the vehicle |
Limited to a certain number of claims or specific models |
May have exclusions for engine damage causes |
| Scenarios Covered |
Theft, total loss, or write-off |
Damages to the car due to accidents or other covered events |
Damage to the engine due to internal or external causes |
| Scenarios Not Covered |
Partial damage, mechanical breakdown, wear and tear |
Routine maintenance, consumables replacement |
Damage due to external factors (floods, fire, etc.) |
Factors to Consider While Choosing the Right Add-ons:
- Individual needs: Assess your specific requirements and priorities. If protecting the vehicle's invoice value is crucial, RTI cover would be beneficial. If minimizing out-of-pocket expenses for repairs is a priority, Zero Depreciation cover might be more suitable. For engine-related risks, Engine Protect cover is recommended.
- Vehicle age and condition: Consider the age and condition of your vehicle. RTI cover is more relevant for newer vehicles, while Zero Depreciation cover can be advantageous for vehicles of any age, especially if their parts are costly to replace. Engine Protect cover is essential for vehicles prone to engine-related issues.
- Budget: Evaluate the premium costs of the add-ons and their affordability within your budget. Compare the additional premium charged for each add-on and weigh it against the potential benefits it offers.
- Policy terms and restrictions: Carefully review the terms and conditions of each add-on, including limitations, exclusions, claim settlement procedures, and any additional requirements imposed by the insurance provider.
- Insurance provider reputation: Consider the reputation and reliability of the insurance provider. Research customer reviews, claim settlement ratios, and overall customer satisfaction to ensure a smooth claims experience.
By considering these factors, you can make an informed decision regarding the add-ons that best align with your needs and provide comprehensive coverage for your vehicle.
Conclusion:
In conclusion, Return to Invoice (RTI) cover is a valuable add-on feature in car insurance policies in India. It provides policyholders with the assurance of receiving the full invoice value of their vehicle in case of theft or total loss, ensuring they are not financially burdened by depreciation. RTI cover offers enhanced protection compared to regular car insurance by bridging the gap between the market value and the original purchase price of the vehicle. While there may be eligibility criteria and restrictions, RTI cover provides policyholders with peace of mind, allowing them to replace their vehicle or make a down payment for a new one without facing a significant financial setback. By opting for RTI coverage, car owners in India can safeguard their investments and enjoy comprehensive coverage against unforeseen circumstances.