Zero Depreciation V/s Return to Invoice in Commercial Vehicle Insurance

What is the Zero Depreciation Add-on Cover for Commercial Vehicles?

A zero depreciation cover for commercial vehicles is an optional add-on. It is also known as zero-dep add-on, nil depreciation add-on, and bumper-to-bumper add-on cover. It ensures that the insurance company does not deduct depreciation on the repaired and replaced vehicle parts while settling an accidental claim against your commercial vehicle insurance.

Commercial vehicles are prone to wear and tear due to their heavy usage, which leads to expensive repair costs. To reduce the financial burden on the policyholder, insurers offer the zero depreciation cover for commercial vehicles. Under this add-on, all the parts damaged in any accident, such as nylon, plastic, glass, rubber, etc., are fully covered at 100% costs, except for tyre, tube and battery costs that are covered at 50%.

What is RTI Add-On Cover for Commercial Vehicles?

The RTI or the return to invoice, is an add-on with commercial vehicle insurance that helps the policyholder to receive the invoice value of the insured commercial vehicle in case of theft or total loss (damaged beyond 75% of the market value).

If the insured commercial vehicle is lost or totally damaged, a commercial vehicle insurance company is liable to pay only the insured declared value (IDV) to the policyholder. An IDV is the current market value of the vehicle after deducting the applicable depreciation cost based on its age. To bridge the gap between the IDV and the actual cost of the commercial vehicle, insurers offer the RTI add-on cover.

The RTI add-on cover for commercial vehicles is beneficial as it provides a significant financial relief by minimizing the gap between the IDV and the original invoice cost, as it does not factor in the depreciation value. It also helps the policyholder to quickly replace the damaged or lost vehicle without facing a major financial setback.

Difference between Zero Depreciation and RTI Add-on for Commercial Vehicles

A standard commercial vehicle insurance can be clubbed with the RTI or zero depreciation add-on to cover uninsured parts and increase its protection. However, it is crucial to understand the differences between these add-ons and make an informed choice.

Check out the table given below to know the difference between the zero depreciation and return to invoice add-on covers for commercial vehicles:

When to Choose Zero Depreciation Add-on Cover for Commercial Vehicles?

It is advisable to choose the zero depreciation add-on cover with a commercial vehicle insurance if the insured vehicle is new, used daily, and prone to frequent damages. Commercial vehicles, such as delivery vans, taxis, auto-rickshaws, etc., can include this add-on for an enhanced coverage. It is better to include this add-on as it helps to minimise repair costs and ensures a better claim amount without deducting any depreciation costs.

When to Choose RTI Add-on Cover for Commercial Vehicles?

Policyholders can opt for the RTI add-on cover for their insured commercial vehicles and receive the full invoice amount, instead of just the IDV. This add-on is beneficial in cases of total loss and theft. It is ideal for heavy-duty and expensive commercial vehicles that are integral to business operations and expensive to replace. If the vehicle is stolen or suffers a total loss, RTI helps reduce your financial stress by offering better compensation to the policyholder.

Over to You

Both RTI and zero dep add-ons for your commercial vehicle offer strong financial protection while serving different purposes. Zero depreciation commercial vehicle insurance is suitable for accidental claims, whereas the RTI add-on for a commercial vehicle is better if the insured vehicle is stolen or damaged beyond repair. Choosing the right add-on for your commercial vehicle depends on the vehicle age, business needs, and the level of risk you want to reduce. Choosing the right add-on with commercial vehicle insurance will ensure minimal downtime and maximum financial stability.