RTI in Car Insurance

Return to invoice cover or RTI in car insurance provides compensation to the policyholder in case the insured car is stolen or gets damaged and declared a total loss. Under this cover, the policyholder is eligible to get the full compensation from the insurer that is the last invoice amount of the car.

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What Is Return To Invoice in Car Insurance?

Return to invoice cover is an add-on that a policyholder can get along with a comprehensive car insurance policy. You have to pay an extra amount in your car insurance premium to get covered under this add-on. This add-on compensates a policyholder with an amount equal to the invoice value of the car if it's considered total loss or is damaged beyond repair. .

How Does the RTI Cover in Car Insurance Works??

A basic car insurance policy would not fetch you the actual value of your car or the money you have invested at the time of purchasing the car. If we consider the rate of depreciation, 5% depreciation is applied on the car which is 6 months old from the day of purchase, 10% for one year.

In such a case, you tend to lose quite a huge amount. But with an invoice return cover, you need not have to bear the differences, as the insurer pays the full value (invoice value) of your car until it reaches the age of 3 years.

When Return to Invoice Cover Comes into the Picture?

This cover comes to your rescue to cover the gap between the IDV and the invoice value of your car. It is an optional cover to fetch you the complete amount of loss when you claim insurance in case of an accident or total loss.

However, you can avail of this cover at an additional cost. Usually, RTI costs 10% more than your comprehensive car insurance. Moreover, you can avail of this cover until your car reaches a specific age i.e. 3 years.

When is the RTI Cover Applicable?

We don't recommend you to buy return to invoice car insurance to cover small dents and repair expenses or a crack of the windshield. This cover comes in handy in covering the full value of the vehicle in case of complete damage or loss. It is helpful if your car is stolen or sustains damages beyond repair.

Moreover, if you stay in a theft-prone area or you don't have a secured parking area, you must consider this cover.

However, you can't always carry the cover. After a few policy renewals, you'll have to withdraw this cover. Usually, it is a loss for the insurance provider to pay you a value that is more than the current market value of your vehicle, especially those cars whose wear and tear would have increased over the period.

How Return To Invoice Is Calculated?

While purchasing the car, you pay the on-road price. On-road price includes the ex-showroom price, road tax and registration charges that depend on the make & model of the car. However, if your car is declared a total loss, then if you do not have an RTI add-on cover, the insurer will provide you coverage as per your insured declared value.

However with a Return to Invoice cover, when you make a claim under the total loss scenario the insurance company compensates for the below-mentioned values:

• Ex Showroom price + Registration Charges + Road tax, when you purchased the brand new car.
• Current replacement charges that include Ex-showroom price + Road tax + Registration charges.