Return to Invoice (RTI) Add-On Cover for Commercial Vehicle Insurance

What is the Return to Invoice (RTI) Add-On Cover for Commercial Vehicles?

A motor vehicle starts to depreciate from the moment it is purchased. When an insured commercial vehicle meets with a severe accident, theft, or total loss, i.e., damaged beyond 75% of its value, a standard commercial vehicle insurance with an own-damage cover only reimburses the IDV. The IDV is the current market value of your vehicle and the maximum amount the insurance company is liable to pay in case of a total loss or theft.

However, to avoid getting a lower amount and settling for the IDV of the insured commercial vehicle, policyholders have the option to choose and buy the return to invoice add-on cover at an additional premium. This add-on with a commercial vehicle insurance policy ensures that the insured receives the original invoice value of the commercial vehicle in case of a total loss or theft. It includes the vehicle price, registration charges, road tax, and even the first insurance cost paid.

Reasons to Buy the RTI Add-On Cover with Commercial Vehicle Insurance?

Policyholders can only buy the RTI add-on cover if they have a comprehensive commercial vehicle insurance policy. Here are some of the reasons to buy the RTI add-on cover for a commercial vehicle:

• Ensures a Better Payout: With this add-on, the insurance company is liable to pay the full invoice amount, including taxes, registration costs, insurance costs, etc., in the event of theft or total loss. It does not consider the depreciation costs and ensures a better payout as the insurer pays more than just the IDV.
• Covers Total Loss & Theft: Since commercial vehicles are at a greater risk of being stolen or severely damaged, this add-on is better in such cases. Whether the insured vehicle is damaged due to an accident, natural calamity, fire, or man-made disasters, the RTI add-on cover for commercial vehicles will be helpful to cover such situations.
• Financial Security: The add-on helps the policyholder to recover the full invoice amount, including taxes and registration costs, instead of just the IDV. It helps to avoid potential business losses and ensures financial security, along with the necessary peace of mind.

What Does the RTI Add-On Cover for Commercial Vehicles Include?

The return to invoice add-on cover with a commercial vehicle insurance includes the following:

*The exact inclusions will vary as per the terms and conditions of the policy

For example, the insured commercial vehicle was purchased for ₹20 lakh (including taxes and registration costs). After two years, its IDV may reduce to ₹15-16 lakh due to depreciation (approximately 20%). If the vehicle gets stolen or suffers total damage, the insurer will reimburse only ₹15-16 lakh without the add-on, but the full invoice amount of ₹20 lakh with the RTI add-on for commercial vehicles.

How does the RTI Add-On Cover with Commercial Vehicle Insurance Work?

The RTI add-on cover for commercial vehicles comes into play under the following situations:

• Total Loss: If the insured commercial vehicle is severely damaged due to an accident, fire, flood, etc., and is declared a Constructive Total Loss (CTL) because the repair cost is more than 75% of the current market value.
• Theft: In case the insured commercial vehicle is stolen and is declared untraceable, the commercial vehicle insurance company is liable to pay the IDV or the RTI, if the add-on is purchased separately.

Is it Worth it to have the RTI Add-On Cover for Commercial Vehicles?

The RTI add-on cover for your commercial vehicles provides a better payout in case of theft and total loss. The add-on helps to protect the insured vehicle if it is totally damaged (more than 75% of its current market value) or stolen and untraceable. Apart from that, the reimbursement cost also covers the road tax, registration costs, and the first insurance premium paid while purchasing the vehicle, and not just the current vehicle price or the IDV.

Therefore, purchasing the RTI add-on with a commercial vehicle insurance is always beneficial as it helps in safeguarding the policyholder and minimizing any out-of-the-pocket expenses.