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Return To Invoice Cover in Car Insurance: What is RTI in Car Insurance [2024 Guide]

Team AckoApr 30, 2024

People are familiar with what is car insurance, its benefits, or even coverages and exclusions for that matter.

Car insurance will financially protect you in case of an unfortunate incident involving the insured vehicle.

However, a car insurance policy is not just about financial protection when a liability occurs, it can prove to be of great help if you ensure certain things while buying the policy.

One such beneficial coverage is the Return to Invoice Protection Cover Add-on. In this article, we will discuss various aspects of this additional coverage. Take a look:

Contents

What Is RTI In Car Insurance?

RTI is an abbreviation for “Return To Invoice”.

The literal meaning of these words is going back to the original value mentioned on the invoice of a product.

The Return to Invoice (RTI): When Return To Invoice in car insurance is concerned, it means that the insurance company will return the value of the car approximately equal to the one mentioned on the original invoice of a car in case of a major damage. RTI in car insurance is additional coverage that an owner can purchase while buying a car insurance policy. The decision to include Return To Invoice Cover in car insurance lies with the owner of a car and is not mandatory by law.
Insured Declared Value (IDV): This is the current value of a car. IDV is supposed to be declared by the car owner, which can be calculated using an IDV calculator, while purchasing a new policy or during the process of policy renewal. It is ideal to set the IDV of a car approximately equal to the current market value of a car. Setting a high value will increase the cost of a policy and setting a lower value will decrease the sum insured.

Benefits of RTI (Invoice Protection) Add-on Cover:

The Return to Invoice in car insurance can be beneficial in various ways.

It can prove to be a great financial help in the time of need and one does not have to endanger their savings for buying a car.

Here is a list of advantages of RTI in a car insurance policy:

1. Increases The Scope of Coverage:

Return to Invoice is an Add-on, that means it is an additional coverage that you will buy with your car insurance policy.

Add-ons increase the scope of coverage and make it customized. Since it is not free coverage, not everyone chooses to buy this cover.

2. Is Available For New Cars

Some people take extra care of their new car as compared to an old one.

Thus, it is also true that it is more emotionally draining if a new car gets into an accident of any sort and damage is caused.

However, if one has purchased the RTI add-on while buying car insurance, he/she can be worry-free in case of major damages.

3. Beneficial In Case of Theft

Car theft is common in India. Someone with a malicious intention can steal your car.

All the money that you spent on buying a brand-new car will go in vain without the RTI coverage.

4. Beneficial In Case of Total Loss

Total loss is a situation where a car is so damaged that repairing it would cost more than its resale value.

Thus, it would be better to salvage the car and keep what little amount you receive. RTI can prove to be a boon in such a situation.

It will help you get the entire value of the car without worrying about damage, repairs, or salvage.

5. Available With Own Damage

A car insurance policy can be of two types.

First is the basic Third-party Liability coverage and the second is a Comprehensive policy that offers multiple coverages.

The Return to Invoice Add-on is available with a Comprehensive car insurance policy i.e. Own Damage cover.

Thus, you can increase the benefit offered by a Comprehensive policy with the help of RTI.

Also, read: Loss of Personal Belongings Add-on in Car Insurance

How Does Return To Invoice Cover Work?

The Return To Invoice cover instantly springs into action when your car experiences damage beyond repair i.e. total loss or when your vehicle gets stolen.

There could be a number of reasons that could cause a car to be considered as a total loss. Here are a few:

Fire: A damage of high magnitude is caused if a car explodes due to fire.
Floods: Water may enter important components of a car and damage it to a great extent.
Landslide: Large rocks, trees, and debris can crush the vehicle and damage it beyond repair.
Accident: An accident, especially with a larger vehicle can cause a total loss.

This is when you can make a claim against the RTI in car insurance policy.

Note that without this cover, you would be liable to only the IDV of the car in a total loss or theft situation.

When Is The Return To Invoice Cover Applicable?

Depending upon the insurance company, the Return to Invoice cover is applicable to cars that are less than 3 to 5 years old.

One can make a claim against this cover only in case of total loss to the insured car. Submitting the original invoice of the car may be necessary at the time of claim.

When Is The RTI Cover Not Applicable?

The Return to Invoice cover is very useful for those who buy it with their Comprehensive car insurance policy.

Since it is so beneficial, it can be purchased only under certain conditions.

Here is a list of situations where the RTI cover is not applicable.

Third-party (TP) Liability Policy: The Return to Invoice cover is not applicable to a TP policy because Own Damage coverage is not applicable in this type of car insurance.
Older Cars: After a certain number of car insurance renewals, the policyholder will not be allowed to purchase the RTI in car insurance. This number of years depends upon the terms and conditions of the insurance policy.
Minor Damages: The policyholder cannot make a claim against his/her RTI add-on for any damage other than total loss or theft. Even if a claim is raised, the RTI will not come in force for minor damages to the car.

Also, read: Compare Car Insurance Policies Online

How To Calculate RTI?

It is very easy to calculate the sum insured associated with Return To Invoice Cover in India.

To know the claim amount against your RTI cover simply take a look at the amount on the invoice of your car.

The claim amount can be approximately equal to the amount on the invoice. This is how you can calculate RTI.

How Much Does Return To Invoice Costs?

Return to Invoice is additional coverage that you can choose to buy along with your comprehensive car insurance policy.

Since it increases the scope of coverage it will also increase the cost of a policy.

You can expect to pay around 10% more premium if you buy the Return to Invoice.

This cost is usually negligible as compared to the sum insured that RTI offers in the time of need.

Also, read: Vehicle Scrappage Policy in India

Example of RTI In Car Insurance:

Here is an example that will help you understand how a claim against RTI is paid:

Situation:

Consider you have bought a brand-new SUV for your family. The cost of this car is 15 Lakh rupees.
You spent a little more than one year driving it and enjoyed these drives to the fullest. The age of your car is 1 year and 2 months.
Consider, you live in a flood-prone area and your parked car was submerged in water for a long time.
Your SUV has suffered irrevocable damage (total loss) and now you need to make a claim.

Result:

The following table will show how your claim is settled against total loss with and without Return to Invoice Add-on:

With RTI Cover	Without RTI Cover
Consider you bought the Return to Invoice cover while renewing your car insurance policy.	Consider you did not buy the Return to Invoice cover while renewing your car insurance policy.
You are stress-free as you have made the right decision of buying RTI.	You are stress-full as you will suffer a loss now.
Your claim amount is approximately equal to the invoice value of the car i.e. 15 Lakh rupees.	Your claim amount is approximately equal to the current IDV of the car i.e. 12 Lakh rupees.
You did not suffer any loss virtually.	You suffered a loss of 3 Lakh rupees.
You bought the exact same model with the claim amount.	You had to shell 3 Lakh rupees from your pocket to buy the same model again.

Also, read: Return to Invoice vs. Zero Depreciation

Who Should Opt For A Return To Invoice Protection Cover?

One can buy many car insurance Add-ons with their policy.

However, every Add-on is not beneficial to every policyholder.

Thus, it is said that a person should first assess his/her personal requirements and then buy a car insurance Add-on.

For example, buying an Accessories cover and having no additional accessories in the car will be a waste of coverage and money.

Similarly, buying a Return To Invoice cover will not be beneficial for everyone.

Here is a list of profiles that are suitable for purchasing the RTI Add-on:

Who	Why
Owners of new cars	Because the Return To Invoice cover is available for new cars
People who reside in a theft-prone area	Theft is claimable against RTI
People living in areas where natural calamities are common	Natural calamities can cause total loss which is covered under RTI

Validity of The Invoice Protection Cover:

Any add-on bought with a car insurance policy is approximately valid for one year.

Likewise, the Invoice Protection Cover will also be valid for one year after which the policyholder needs to renew his/her car insurance policy.

Note, it is also possible that an insurer decides to increase or decrease the validity of the policy.

Thus, it is a good idea to take a look at the policy document for the mention of an expiry or renewal date.

Which of The Add-on Covers Is Better? ZERO Depreciation Or RTI?

As mentioned earlier, an Add-on should be chosen to suit a personal requirement.

When a person decides to buy a ZERO Depreciation or RTI cover, he/she should consider certain factors that will decide the usefulness of an Add-on.

When in doubt, ask yourself the following questions:

Question	Yes/No	Return to Invoice	Zero Depreciation
Do I have a brand-new car?	Yes	✓	✗
Do I have a brand-new car?	No	✗	✓
Are there chances of car theft?	Yes	✓	✗
Are there chances of car theft?	No	✗	✓
Are natural calamities common in the area where I live?	Yes	✓	✗
Are natural calamities common in the area where I live?	No	✗	✓
Am I a rash driver?	Yes	✓	✗
Am I a rash driver?	No	✗	✓

Return to Invoice vs IDV (Insured Declared Value)

Here is a detailed comparison of the Return to Invoice and Insured Declared Value in car insurance.

Aspect	Return to Invoice in car insurance	Insured Declared Value in car insurance
Definition	It is an add-on cover that pays the difference between the Insured Declared Value (IDV) and the invoice value of your car in case of total loss or theft.	It is the maximum amount that an insurer will pay in case of total loss or theft of your vehicle. It is based on the car’s approximate market value.
Purpose	Provides financial protection by covering the difference between your car’s IDV and invoice value, ensuring you receive the original purchase price in case of total loss or theft.	Determines the maximum claim amount you can receive in case of total loss or theft of your vehicle based on the approximate market value of the car.
Coverage	Covers the difference between the IDV and invoice value of your car, which may vary over time due to depreciation or market fluctuations.	Provides coverage up to the IDV, which is calculated based on the market value of your vehicle and its age.
Premium	Requires an additional premium to be paid on top of the standard car insurance policy premium.	Included in the standard motor insurance policy premium and is calculated based on your car’s IDV.
Benefits	Ensures you receive the original purchase price of your car in case of total loss or theft, reducing financial loss.	Provides a maximum claim amount based on your car’s approximate market value, which may be lower than the original purchase price but is a more accurate reflection of the vehicle's worth at the time of loss.
Applicability	Applicable for new vehicles and usually available for a limited number of years (e.g., up to 5 years) from the date of purchase.	Applicable for all vehicles and is determined at the time of policy purchase and renewal based on the vehicle's age, make, model, and approximate market value.
Considerations	Suitable for those who want to protect their car’s original invoice value.	Suitable for those who want to ensure they receive the maximum claim amount based on the car’s approximate market value, without considering the original purchase price.
Example	If a policyholder's new car is stolen or declared a total loss, the insurance company will reimburse the car’s original purchase price through the Return to Invoice cover, reducing the financial impact.	If a policyholder's car, which is a few years old, is stolen or declared a total loss, the insurance company will pay the IDV of the vehicle based on its approximate market value, which may be lower than the original purchase price.

Things To Remember About Return To Invoice Cover:

Here are a few points that will summarize all you need to know about RTI before buying:

Return to Invoice is an additional cover. It will increase the cost of your car insurance policy.
It can only be purchased with a new car. Insurance companies usually offer it for cars that are not more than 3 years old.
RTI covers total loss and theft only. Other damages to the car are not covered.
RTI is not suitable for every car owner.
Return to Invoice cover is highly beneficial for claiming the price you paid for buying the car.

Also, read: Car warranty vs insurance. Which is better?

Frequently Asked Questions:

Will there be any deductions while making a claim under RTI?

It is possible that the exact amount mentioned on the invoice of your car may not be refunded at the time of claim. The claim amount will depend upon the terms and conditions mentioned in your car insurance policy. Don’t hesitate to speak to the insurance company to get your queries resolved.

Can Return to Invoice cover be bought for cars older than 3 years?

Yes, it is possible to buy the Return to Invoice cover if your car is older than 3 years, provided your insurance company is offering this Add-on for your car.

Are additional accessories covered under RTI?

No, only the invoice value of the vehicle will be claimable.

What are the exclusions of Return to Invoice cover?

Please refer to the “When Is The RTI Cover Not Applicable?” section by scrolling up to understand the exclusions of RTI Add-on cover.

Are minor damages covered under RTI?

No, any kind of minor damage is not covered under RTI.

What is the difference between RTI and IDV

RTI stands for Return to Invoice and IDV stands for Insured Declared Value. RTI is an Add-on that can be bought separately with a car insurance policy. Whereas, a policyholder needs to declare the IDV of a car each time while buying a car insurance policy. It is the approximate current market value of a car.

I have bought the RTI cover and my car got stolen. What should I Do?

You should inform your car insurance company about the theft as soon as possible and raise a claim against the RTI coverage that you purchased. Your insurer will guide you on the claim process.

Is RTI better than Zero Depreciation Add-on?

No, both covers are equally beneficial when bought at the right time.

I have an expensive sedan car that is 6 years old. Should I buy the RTI Add-on?

It is a good idea to buy the RTI cover for new cars i.e. cars that are 3 to 5 years old. After this time your insurance company may not allow you to buy the RTI coverage. Check if your insurer is ready to offer this Add-on.

When can I buy the RTI Add-on?

You can buy the Return to Invoice Cover while buying a new car insurance policy. This cover may also be available at the time of renewal, provide your car is less than 3 to 5 years old.

Can I claim the on-road price against RTI if my car is damaged beyond repair?

Yes, you can claim the value for road tax and registration charges of the car i.e. the on-road price against your Return to Invoice coverage.

Can I buy other Add-ons if I have purchased a Return to Invoice cover?

Yes, you can add as many suitable Add-ons as you wish to buy along with your comprehensive car insurance policy.

Is Return to Invoice insurance worth it?

The worthiness of the Return to Invoice insurance depends on various factors such as the type of vehicle, insurance coverage, personal financial situation, cost of RTI insurance, and length of ownership.

It's important to carefully consider your circumstances and weigh the costs and benefits before deciding.

It's also recommended to read and understand the terms and conditions of the RTI in car insurance to make an informed decision.

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet; and is subject to changes. Please go through the applicable policy wordings for updated ACKO-centric content and before making any insurance-related decisions.

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