What is Return to Invoice Cover (RTI) in Car Insurance?

Is Comprehensive Car Insurance Enough?

Let us take a look at this example. In 2023, Rajeev Saxena purchased a brand-new car worth ₹15 lakh, but it was stolen 2 years later. Now there are 2 scenarios in which things could have proceeded.

• Scenario 1: Rajeev had a regular car insurance plan that paid the claim based on the IDV. He would have received not more than ₹10 to ₹12 lakh, a value much lower than what he paid when he purchased his car.
• Scenario 2: Rajeev had purchased the return-to-invoice add-on cover along with his new car insurance plan. Even after 2 years, he would have received the original invoice sum, without any deductions.

A car getting stolen can be a significant financial and mental loss. And the Return to Invoice add-on can come to your rescue in such a situation. Being one of the most popular add-on covers, Return to Invoice can be a game-changer. Let us now get into the details of Return to Invoice so you can make a well-informed decision.

What is Return to Invoice Cover?

Return to invoice is an optional cover you can buy with a new policy or add to your existing own-damage insurance plan or comprehensive car insurance policy. This add-on cover makes you eligible to receive compensation from your insurer. In case your vehicle is stolen or damaged beyond repair. However, remember that this add-on cover is usually available only for vehicles up to 3, or in some cases up to 5, years old.

Return to invoice cover can help bridge the gap between the IDV and the original price of your car. What makes compensation under return to invoice cover appealing is that you get a car compensation amount equivalent to the car's invoice value. This means that your insurer will not deduct depreciation from your car's value, unlike a regular motor insurance policy, which offers compensation after depreciation is deducted.

How Does Return to Invoice Cover Work?

The return-to-invoice add-on is a type of coverage that becomes active only when your vehicle is either stolen or damaged beyond repair. In such cases, where your vehicle loses its usage, you can raise a claim with your insurer and get compensation equivalent to your vehicle’s invoice.

Not just this; typically, a return to invoice cover also offers reimbursement for the following.

1. First-time registration charges you have paid for the insured vehicle.
2. Road tax of the insured vehicle.
3. Cost incurred on adding accessories to the insured vehicle. Provided that these accessories were specifically insured in the car insurance policy.
4. New vehicle insurance policy.

Note: Policies may differ, so kindly check your policy documents to understand the coverage and terms and conditions for such reimbursements.

What are the Benefits of Return to Invoice Cover?

Extends the Coverage Limits of Your Existing Policy

Your regular car insurance policy pays you if your vehicle is stolen or damaged beyond repair. However, it only compensates you based on your vehicle's IDV, which is much lower than what you paid when you bought the car. With the return to invoice cover, you can easily extend the coverage limits of your existing policy.

Protects Your Car Against Depreciating Value

A car is considered a depreciating asset that impacts your insurance claim in case of a total loss of the vehicle. But when you have secured your car with return to invoice cover, depreciation becomes irrelevant. Your insurer does not deduct the depreciation amount while compensating you.

Did You Know that the Insurance Regulatory and Development Authority of India has fixed the rate of depreciation for vehicles? Here’s the detailed depreciation rate. Here’s a table explaining the depreciation rate:

• Less than 6 months: NIL
• From 6 months to a year: 5%
• From 1 to 2 years: 10%
• From 2 years to 3 years: 15%
• From 3 years to 4 years: 25%
• From 4 years to 5 years: 35%
• From 5 years to 10 years: 40%
• Over 10 years: 50%

An Affordable Addition for Long-Term Benefits

Return to invoice cover is an add-on cover that can be added to your existing car insurance policy with a minimal additional premium. This small addition can have several benefits for your vehicle for years.

Brings Peace of Mind

Knowing that your car’s value is protected in case of a total loss brings peace of mind. This ensures that you drive your vehicle with less worry and anxiety.

Helps Buy A New Car

If your vehicle is stolen or damaged beyond repair, and you wish to purchase a new car, return-to-invoice cover ensures you receive adequate compensation to reduce the burden of buying a new one.

Things to Keep in Mind While Purchasing Return to Invoice (RTI) Cover

If you are planning to get the return to invoice cover, here are a few things you must bear in mind.

Inclusions and Exclusions

Depending on the kind of return to invoice, cover and insurance company, the inclusion and exclusion might differ. Do check the detailed list to avoid any future confusion.

Eligibility for RTI Cover

Return to invoice is an add-on cover that can be purchased only if you have your own damage car insurance or a comprehensive car insurance policy.

The Additional Premium Amount

Be mindful of the additional premium you have to pay to add return to invoice cover to an existing car. You can head to Jio Insurance Broking to find an affordable plan. Here you can view policies of various insurance companies before picking one.

The Right Insurance Provider

Ensure to explore and choose the right insurance provider. A reputable insurance company means a simple claims settlement process, so you get the compensation amount with just a few easy steps. Trust Jio Insurance Broking to explore policies of the most trusted insurance companies in India.

Pro Tip: You can check the claim settlement ratio of every insurance company by the annual claim settlement report published by the Insurance Regulatory and Development Authority of India.

To Conclude

The return to invoice cover is an efficient and smart way to extend the coverage on your existing policy. By offering compensation equivalent to your car’s invoice value, this cover becomes a lifesaver in the event of an unfortunate incident. Be mindful of the claim settlement process to avoid any hassle in the future.