Return To Invoice (RTI) Car Insurance
No matter how much protection you provide, your pricey possession is not free from risk on road. And you can imagine how much even a single accident will cost you. And you have not provided your prized possession with enough protection until you insure this with adequate add-on insurance covers such as Return to Invoice, along with the basic insurance. Here’s why!
Let’s understand this with an example:
Mehta’s newly-bought car was stolen from the parking area when he parked it outside his residence at night. As soon as he realised the situation, he rushed to file an FIR against the loss and informed his insurer. his claim was accepted and Mr Mehta was sure of getting the full value of his car under his comprehensive cover. But while the settlement amount was received it bought sheer disappointment as Mehta was not compensated with the full value his car. Then only he came to know that even a new car is stolen, the insurer can’t pay the full amount. Instead, they can pay something equal to the IDV.
How Much Reimbursement can be Availed
At the time of buying car insurance, the insurance provider decides the IDV of your vehicle by applying the depreciation from the invoice value. It is the current market price of your car or the maximum amount up to which you can claim your insurance policy in case of a total loss.
When Return to Invoice Cover Comes into the Picture!
This cover comes to your rescue to covers 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 the insurance in case of an accident or total loss. However, you can avail this cover at an additional cost. Usually, RTI cost 10% more than your comprehensive car insurance. Moreover, you can avail this cover until your car reaches a specific age.
When is the Cover Applicable?
We don’t recommend you to buy return to 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 is a theft-prone area or you don’t have a secured parking area, you must consider this cover.
How Does the Cover Works for You?
A basic car insurance policy would not fetch you the actual value of your car or the money you’ve 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 of your car until it reaches the age 3 years.
It’s Not for the Lifetime!
Well, you can’t carry the cover always. 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.
The invoice cover usually includes one-road price, registration costs, road tax, dealer’s handling etc. When you claim your insurance using Return to Invoice for your stolen car or completely/partially damaged car, the insurer is bound the rather pay the invoice cover in full or evade one or more charges under the above specifics.
Or they may compensate with a specified amount say 10% or 20% compensation, apart from the car’s showroom price mentioned in the actual invoice.
Thus, Return to Invoice cover plays its role of saving you from paying a huge depreciation amount and get the full value of the car.
Note: This is your car’s recommended IDV as per IRDAI’s depreciation guidelines.asdfsad However, insurance companies allow you to modify this IDV within a certain range (this range varies from insurer to insurer). Higher the IDV, higher the premium you pay.Read More