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Benefits of Return-to Invoice Add-on Cover Car Insurance

By Vikas Chandra Das
21 July 2022, 11:46 AM

People are familiar with auto insurance, its advantages, or even coverage and exclusions, for that matter. Car insurance will cover you financially in the event of an unforeseen occurrence involving an insured vehicle. Its utility is further enhanced by add-ons that provide extra cover. 

But what if your car is stolen? Which add-on covers theft of the vehicle? In this article, we will discuss various aspects of this additional coverage called the return to invoice.

What is a Return-to-invoice Add-on?

The literal sense of these words means reverting to the original value shown on the invoice for the product. As far as Return To Invoice in car insurance is concerned, it means that the insurance provider will return the value of the car approximately equal to that shown on the car's original invoice in the event of major damage or theft. The decision to include RTI in automobile insurance is with the car owner and is not legally binding.

What are the Benefits of Buying an RTI Add-on Cover?

The Return to Invoice add-on cover in car insurance is very useful in plenty of ways. It can be of great financial aid at a time of need, and one does not have to place their savings on the purchase of a car at risk. Here is a list of the benefits of RTI in the insurance policy for cars:

1. Increases coverage scope

Add-ons will broaden the reach of coverage and make it personalized. But remember that buying it will also increase the cost of the premium.

2. Protect your new car

Some people take extra care of a new car compared to the old one. However, it is also true that it is more emotionally exhausting if a new car is involved in an accident of some kind and the damage is incurred. However, if one bought the RTI add-on when purchasing new car insurance, he/she could be free to worry about significant losses.

3. Save money in case of theft

Car theft is widespread in India. Someone with a sinister intent might steal a car from you. All the money you spent on buying a brand-new car would go in vain without RTI coverage.

4. Beneficial in case of a total loss

Complete loss is a case in which a vehicle is so damaged that repairing it will cost more than its resale value. It will be safer, therefore, to sell the car and retain what little amount you get. In such a case, RTI will prove to be a bonus. It will help you get the full value of your car without thinking about an injury, repair, or salvage. For example-Naman's car got severely damaged in an accident and after taking the car to a garage, Naman came to know that its repairing cost would be more than its resale value. If a car is damaged more than 75% of its value, in such a case car insurance companies take complete possession of the car. And, in return offer the market value of the car to the policyholder. But with RTI cover, instead of getting the market value, a policyholder receives the invoice value of a car which is surely a benefit. Thus, if Naman also had an RTI, he would receive an invoice value of the car. Hence, having an RTI Cover is a win-win situation.   

5. The increased benefit with your comprehensive insurance policy

There may be two forms of car insurance policy. The first is the standard third-party liability car insurance coverage, and the second is a comprehensive car insurance scheme providing various coverages. The Return to Invoice Add-on is available with a comprehensive insurance policy, i.e., Own Damage Car Cover. Thus, with the aid of RTI, you can increase the benefits provided by a comprehensive policy.

How does RTI Work?

The Return To Invoice cover immediately springs into motion when your car suffers damage beyond repair, i.e., complete loss or when your vehicle is stolen. There may be a variety of reasons that could lead to a car being deemed a complete loss. Here are a few of them:

  • Fire: Damage of high severity is caused when a car explodes due to a fire.
  • Floods: Water can enter and damage important components of a car to a large extent.
  • Landslide: large rocks, trees, and debris might crush the vehicle and cause damage beyond repair.
  • Accident: An accident, particularly with a larger vehicle, may lead to a total loss.

This is when you can put a claim against the Return to Invoice add-on to your auto insurance policy.

When is RTI Applicable?

Depending on the insurance provider, the Return to Invoice coverage only extends to vehicles less than 3 years of age. A claim against this coverage can be made only in the event of a complete loss to the insured vehicle. The submission of the original car invoice may be required at the time of the claim.

When will RTI not Stand Valid?

The Return to Invoice insurance cover is very useful for those who purchase it with their Comprehensive Automobile Insurance policy. It can only be invoked under certain circumstances. Here is a list of cases where the RTI does not apply.

  • Third-Party Liability Policy: Return to Invoice coverage does not apply to the TP policy because Own Loss coverage does not apply to this form of auto insurance.
  • Older Cars: This cover is not available for cars older than 3 years. Hence, the policyholder will not be able to buy the RTI Add-on. This number of years depends on the terms and conditions of the insurance policy.
  • Minor Damage: The policyholder cannot claim against his/her RTI add-on for any damage other than complete loss or theft. Even if a lawsuit is made, the RTI will not come into effect for minor damages to the vehicle.

How to Calculate RTI?

It is very straightforward to measure the insured sum associated with the Return to Invoice Cover in India. To know the cost of the claim against your RTI cover, take a look at the amount on your car's invoice. The value of the claim will be roughly equal to the amount on the invoice.

What is the Cost of Buying RTI Cover?

Return to Invoice is extra coverage that you can opt to purchase along with your comprehensive auto insurance policy. If it expands the breadth of coverage, the cost of the policy would also increase. You should expect to pay about 10% more if you buy a Return to Invoice. This expense is typically insignificant compared to the amount insured that RTI provides at the time of need.

Final Thoughts

Return To Invoice in car insurance means that the insurance provider will return the value of the car approximately equal to that shown on the car's original invoice in the event of major damage or theft. The value of the car insurance claim will be roughly equal to the amount on the original invoice. 

You should expect to pay about 10% more if you buy a Return to Invoice, which is insignificant compared to the amount insured that RTI provides. Hence, RTI is a very beneficial add-on.

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