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Return to Invoice (RTI) Cover in Car Insurance
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A Return to Invoice cover, also known as RTI, is an add-on that can be purchased when you have a comprehensive car insurance policy. This add-on saves the insured from a financial burn when the vehicle has undergone severe damage or is stolen.
When you choose an RTI add-on, your compensation will be the same as the invoice price of the car.
To understand, let’s look at an example. Rahul recently purchased a Maruti Suzuki Swift Dzire with an on-road price of INR.6,74,370. So did Akhilesh. The two live in a small town that’s prone to regular thefts, and both their cars got stolen. Rahul only received compensation from his insurance company based on the IDV of his car, while Akhilesh got the entire invoice amount back. This is because Akhilesh had purchased the RTI cover.
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Features and Benefits of Return to Invoice Add-on
- This add-on can be availed by only those car owners whose car is less than 3 years old.
- The entire cost of the vehicle including the on-road taxes can be recovered by the insured in circumstances that the car was lost, stolen, or damaged.
- This add-on will come forth as a boon in case of a total loss, where the car is so severely damaged that the cost of repairing the car would be higher than the resale value of the car.
- This add-on however cannot be used for minor damages to the car.
- A return to invoice cover will help the policyholder get the same or similar model of the vehicle, at the last invoice value of the same.
What is Covered?
- Theft - the return to invoice cover includes specifics like the on-road price of your car, registration charges, dealer-handling costs, road tax on your new car, etc.
- Total loss or constructive total loss - for a claim of total loss or constructive total loss, the car insurance company compensates for the lower of the two values
- The price of the vehicle includes the Ex-Showroom Price, the Road Tax, and also Registration Charges at the time of the original purchase.
- The current replacement price of the vehicle includes the Ex-Showroom Price, the Road Tax, and the Registration Charges, in case the same model is available.
- The total loss may be caused due to fire, floods, landslides, accidents, etc.
What is not Covered?
Standard policy exclusions are as follows –
- No claims can be made if the car was driven under the influence of alcohol or other intoxicating substances.
- No claims can be made if the car was driven by an individual who does not have a valid driver’s license.
- No claims will be entertained if there was contributory negligence on the part of the policyholder or if it was a voluntary act that caused the damage.
Other exclusionary clauses are -
- Those who have a simple third-party car insurance cover cannot avail this cover.
- When the age of the car exceeds 3 years then the return to invoice cover will not be available.
- Minor repairs cannot be claimed under this cover. Partial loss can be handled through its own damages car insurance and zero depreciation car insurance cover.
- If the car has been stolen and the policyholder does not have an FIR or a police complaint to that effect.
Who Should Buy this Cover?
It goes without saying that the choice of purchasing this cover is entirely dependent on the requirements of the policyholder. However, experts suggest that the following individuals must consider the purchase of such an add-on cover for a car insurance policy -
- It should be opted in by those who have newly purchased/expensive cars.
- One must opt for it if the city or area that you reside in is prone to thefts.
- One must opt for it if the residence of the policyholder is in an area where natural calamities are common.
How to Raise a Claim?
To raise a car insurance claim, you need to:
- File an FIR so that you have documented proof that the vehicle was stolen.
- Contact your insurance provider with requisite documents like your policy number, Aadhar card copy (or any other ID. proof), and car registration (or any other proof of sale).
- The insurance company will verify your claim.
- You will receive the pay-out.
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Return to Invoice Cover Car Insurance FAQs
1. How can one calculate the return to invoice?
The claim amount will be equal to the amount that is present on the invoice that was given at the time of the car purchase. But this amount will be dependent on the terms and conditions of the car insurance policy, so it is best to refer to that once.
2. What is the approximate increase in the premium amount for availing this benefit?
This additional coverage comes at a 10% increase in the premium. Weighed in monetary terms, this increase in premium is negligible as the sum that one will get at the time of the claim will be significantly high.
3. What is the validity of the return to invoice cover?
The cover is valid for a period of one year after which it needs to be renewed.
4. How is a return to invoice cover different from a zero depreciation cover?
A return to invoice cover is used when there is total or constructive loss or theft of the vehicle. A zero depreciation cover is used in case of partial repairs to the vehicle. The purpose of both the covers is different and complementary to one another.