What is Return to Invoice in Car Insurance (RTI)?
When purchasing car insurance, the standard coverage typically provides compensation based on the car’s Insured Declared Value (IDV), which accounts for depreciation.
However, Return to Invoice (RTI) is an add-on that ensures you receive the full original purchase price of your car in case of theft or total loss, without considering depreciation.
This add-on is designed to offer additional protection, especially for those who own newer cars and want to safeguard their original investment.
Contents
Table of Contents
How RTI Works (Pointwise)
- Incident Occurs: If your car is stolen or severely damaged (beyond repair), you should report the incident to your insurer immediately.
- Claim Submission: You will need to submit relevant documents, including an FIR (for theft), photos, and a description of the incident. This helps the insurer assess the loss.
- Insurer’s Survey: The insurance company will send a surveyor to inspect the vehicle or verify the circumstances of the theft. If the vehicle is deemed irreparable, the insurer will approve your claim.
- Claim Settlement: Unlike standard insurance where the claim is based on the Insured Declared Value (IDV), RTI reimburses you based on the original invoice value of your car—this is the price you paid when you bought it.
- Payout: Once the claim is approved, the insurer will pay the amount corresponding to the original invoice value of the car, which helps you avoid losses due to depreciation.
Pros and Cons of Return to Invoice (RTI)
| Pros | Cons |
|---|---|
| Full Invoice Coverage: RTI ensures that you receive the full value of the car as per the original invoice, protecting you from depreciation. | Additional Premium: RTI comes with an extra cost, typically around 10% more than the standard premium. |
| Protection Against Theft: If your car is stolen and not recovered, RTI will cover the full invoice value, reducing the financial setback. | Limited to Newer Cars: RTI is usually available only for cars less than 3-5 years old, meaning older cars are typically not eligible. |
| Ideal for New Cars: New car owners can benefit the most from RTI, as it ensures full compensation for the vehicle’s original price in case of total loss. | Not for Minor Damages: RTI covers only total loss or theft, not minor accidents or damages that don’t render the car beyond repair. |
| No Worries About Depreciation: RTI removes the concern of depreciation, ensuring that your claim reflects the car’s original purchase price. | Documentation Requirements: The claim process may require submitting the original invoice and other supporting documents, which can take time. |
| Comprehensive Coverage: RTI provides coverage for both theft and total loss, offering peace of mind in case of major damage or theft. | Exclusivity: Not every car owner will need RTI, especially if the car is older or if they are willing to accept depreciation coverage. |
When is RTI Useful?
- For New Cars: RTI is most beneficial when purchasing a new car because it ensures that you receive full compensation for the original price in case of a loss.
- In Case of Total Loss or Theft: RTI comes into play when your car is stolen or damaged beyond repair, ensuring you get a fair settlement without the financial burden of depreciation.
- For Expensive Cars: If your car is expensive or a high-end model, RTI can be invaluable as the difference between IDV and the invoice value could be significant.
Important Things to Consider About RTI
- It’s an Add-On: RTI is not included in standard policies. You must buy it separately as an add-on, which will increase your premium.
- Eligibility: Typically, RTI is available for cars that are less than 3–5 years old. After this, the vehicle’s depreciation is too high for RTI to be applicable.
- Covers Only Total Loss or Theft: RTI does not apply to repairs for minor damage. It is specifically designed for total loss situations, like theft or a car being written off after an accident.
- Required Documents: When filing a claim, make sure you have the car’s original invoice, photographs, and any other documents required by the insurer. Keeping the original invoice safe is essential for RTI claims.
Should You Opt for RTI?
RTI is best suited for:
- New car owners who want to safeguard the full value of their car from depreciation.
- People living in high-risk areas, such as places prone to theft or natural calamities, where the risk of total loss is higher.
- Owners of high-value cars who want to protect their investment.
However, if you own an older car or are less concerned about the value of your car in case of a loss, RTI may not be necessary.
Conclusion
The Return to Invoice (RTI) cover is a valuable add-on for those who want to ensure they’re compensated for the original price of their car in case of theft or total loss. While it does come at an extra cost, it offers significant peace of mind, particularly for new car owners. If you want to avoid the financial setback of depreciation, RTI can be a wise choice. However, it’s important to consider your car’s age, the likelihood of theft, and your specific needs before deciding if RTI is right for you.
Faq
Q.What is Return to Invoice in car insurance (RTI)? RTI is an add-on cover in car insurance that ensures you receive the original invoice value of your car in case of total loss or theft, rather than just the Insured Declared Value (IDV).
Q.Is RTI available for all cars? RTI is typically available for new cars and is usually offered for vehicles up to 3 to 5 years old, depending on the insurer’s terms.
Q.What does RTI cover in car insurance? RTI covers total loss or theft of your vehicle. If your car is damaged beyond repair or stolen, it reimburses you for the invoice value, helping to recover the full cost of your vehicle.
Q.How is the RTI amount calculated? The RTI claim amount is based on the original invoice value of your car at the time of purchase. It is different from the market value or Insured Declared Value (IDV) that may decrease over time due to depreciation.
Q.Does RTI cover partial damages? No, RTI only applies in cases of total loss or theft. It does not cover minor damages or partial accidents.
