Understanding Return To Invoice Cover In Car Insurance

Car Insurance add-ons are additional coverage which gives you extra financial protection against damages or loss incurred by your car due to an accident, theft, or any other mishap. You can get different add-ons by paying an extra amount for them. The add-ons are only available with standalone and comprehensive car insurance policies. Different add-ons offer different types of protection like the one which gives invoice protection is known as Return To Invoice or Invoice Protection Cover.

What is Return To Invoice in Car Insurance?

The Return to Invoice (RTI) is an add-on cover, which is also known as Invoice Protection Cover. This add-on helps you receive a claim amount equivalent to the cost of your car mentioned in its invoice. It bridges the gap between the Insured Declared Value (IDV) and the Invoice value of the car. With this coverage, you can receive an amount equivalent to the on-road price that was finally paid by you to get the car in the case of constructive total loss.

This Return To Invoice add-on is applicable only if your car has sustained any major damage and is not in a usable condition. The Return To Invoice add-on is not applicable in case of small damages.

How Return To Invoice Add-On Cover Works in Car Insurance?

You can request a claim against your car insurance in several circumstances, which may range from a broken headlight to the theft of your car.

However, in situations, where your car becomes irrevocable due to theft, fire or any other unfortunate event. In such cases, insurance companies pay an amount equivalent or up to the car’s insured declared value (IDV), which is lesser than the invoice value of your car, i.e., what you actually paid while purchasing it.

Here comes the return to invoice add-on cover, with which you become entitled to receive the invoice value of your car as compensation rather than the IDV, in the case of the total loss of the car. The invoice value that you would get includes the road tax and registration charges of your car in addition to its market price.

For instance, if you have a car that you purchased with an invoice value of Rs. 5.20 lakh, which includes Rs. 5,000 as registration charges and Rs. 15,000 as road tax. This means that the car’s selling price is Rs. 5 lakh. However, in case it gets stolen or gets completely damaged, then with the comprehensive policy or standalone own-damage plan, you would only get Insured Declared Value (IDV) of your car, i.e., Rs. 5 lakh less depreciation. It will bring a loss of at least Rs. 20,000 for you as you have paid Rs. 5.20 lakh for it. Hence, if you own an invoice protection cover, you could get a claim as much as Rs. 5.20 lakh and refrain yourself from suffering any loss.

Features of Return To Invoice Add-On Cover

Below are some crucial points you need to know about the Return To Invoice add-on cover:

• Generally, this add-on can be bought for cars not older than 3 years of age.
• You can get it by paying a cost of around 10% more than your normal comprehensive/standalone own-damage car insurance policy.

Who Should Buy RTI Add-On Cover?

• Those who have a new car
• Those who have an expensive car
• Those who live in a theft-prone area.

What are the Benefits of the Return to Invoice Cover?

The following are the benefits of purchasing a return to invoice cover:

• It is best suited for new cars and will help compensate for the cost of a stolen car or one that has been damaged beyond repair.
• If you live in a location where thrift of cars and two-wheelers is a common phenomenon, it is a good idea to purchase this cover as it will ensure that you are protected from these cases.
• The compensation provided by standard car insurance is always lower than the amount you paid for a car. Thus, if your car is stolen or totally destroyed no insurance provides complete compensation for it. However, with the RTI cover, this is no longer a concern.

In Which Cases is the Return To Invoice Cover Not Valid?

The following are the situations in which a return to invoice cover cannot be applied:

• The return to Invoice cover is meant for new cars. Hence, if your car is more than 5 years old you cannot opt for this add-on cover.
• If the damage to your car can be repaired, the return to invoice add-on cover cannot be applied. It is only available to people who have either had their car stolen or damaged to a point beyond repair.
• If you fail to file an FIR after the vehicle is stolen or is damaged totally due to an accident, the RTI cover cannot be applied. This is because the FIR is crucial as supporting evidence to your claim.

FAQ

1. What is the difference between Return to Invoice and Zero Depreciation?

Return to Invoice and Zero Depreciation are both additional insurance covers that serve distinct purposes. Return to Invoice covers you in case of total loss or theft of your vehicle by compensating you for the original invoice price. On the other hand, Zero Depreciation covers the difference between the actual cost and the depreciated value of car parts damaged in an accident, ensuring you get full coverage for repairs.

2. Is Zero Depreciation better than Return to Invoice add-on?

No, both add-ons offer equal benefits when chosen based on your specific needs.

Take Away

The Return To Invoice add-on cover is imperative to get compensation for the entire loss incurred by your car without losing the registration charges and tax amount paid by you. With this coverage, you can get the coverage up to the on-road price of your car. If your car is new or expensive, owing this add-on becomes indispensable. Buy it today and shield yourself from the expense of the total loss of your car in the future.

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.