Return to Invoice vs. Zero Depreciation Add-on

A personal car offers the comfort of traveling anywhere you want, any time you want. To travel anywhere and anytime in your car without major problems, your vehicle needs to be well-maintained and insured against accidental damage at all times. To secure your vehicle against damage and for wide-ranging benefits, you can insure it with the Comprehensive Insurance plan.

One of the main benefits of Comprehensive Insurance is the option to include add-ons that further increase the coverage for your car. In this article, you’ll learn about Return to Invoice vs. Zero Depreciation add-on cover and how it impacts your claim settlement.

Zero Depreciation car insurance (Nil Depreciation) is also popularly called ‘bumper-to-bumper’ insurance. When you buy the Zero Dep cover with Comprehensive Insurance for an extra premium, ACKO will not deduct the depreciation amount while settling your claims, enabling you to receive a higher claim amount. The premium will be higher when you include the Zero depreciation add-on to the Comprehensive policy. 

Wondering what is Return to Invoice meaning? Suppose the damages to your car are considerable, and the liability is considered a total loss. In that case, ACKO will pay the Insured Declared Value (IDV), the approximate market value of the car, as stated in your policy. The IDV of your car can easily be calculated using any IDV calculator.

However, with the Return to Invoice add-on, ACKO will pay the amount stated in the car’s original purchase invoice. This way, you can get the maximum claim amount when you include RTI in car insurance, not based on the IDV.

When you insure your vehicle with Comprehensive Insurance, you have the option to buy both these add-ons. But, what are the differences between the two add-ons? The below table pits the Return to Invoice vs Zero Depreciation add-on cover

If your car is less than 5 years old and you do not want higher out-of-pocket expenses during repairs, it is suggested that you opt for the Zero Depreciation add-on. As the car ages, the value of the car depreciates due to regular wear and tear. Nil Depreciation or bumper-to-bumper insurance is ideal for financial security to mitigate the depreciation of the car parts.

For example, if your car was damaged due to a minor accident, and the repair cost is Rs. 40,000, ACKO will pay Rs. 25,000 towards the repair cost after deducting the depreciation of the parts being repaired or replaced. However, your claim settlement amount will be Rs 35,000 if you have chosen to include the Nil Depreciation or Zero Depreciation add-on along with the Comprehensive Insurance plan after deducting the Compulsory Deductible.

As mentioned above, RTI cover pays the price as mentioned in the original invoice in case of a total loss. Total loss is when the car is damaged beyond repair or is stolen. Here is who and why you should buy the RTI cover.

Who:

Why:

Add-ons are a great addition to your car insurance plan since they cover losses that are not covered under the basic plan. However, you need to choose the right add-ons that benefit you during financial liabilities. 

Both the Return to Invoice and Zero Depreciation add-on cover help mitigate potential losses. While the former protects and compensates you if your car was damaged beyond repair or stolen, the latter bridges the gap between the actual cost and the depreciated value of car parts. 

A new car that may not require too much maintenance may need the RTI cover. An old vehicle that is less than 5 years old that may require a lot of repairs, may need the Zero Depreciation cover. Hence, choose the car insurance add-on cover that fits your needs.