What is RTI in Car Insurance
RTI or, better known as a Return to Invoice cover is an add-on cover offered in a comprehensive car insurance plan.
The same allows the insured customer to receive full compensation, i.e. the last complete invoice value of their car, in case it has been stolen or damaged beyond repair.
Who can opt for RTI cover in car insurance?
A Return to Invoice cover is an exclusive cover offered to new cars. (an insurance cover for the actual babies!).
How does Return to Invoice cover work?
In a normal insurance cover, the maximum amount of claim you can make is restricted to its IDV. RTI is an add-on option which covers the gap between the Insured Declared Value and the invoice value of the car. For context, the IDV is lesser than the invoice value of your car because of depreciation that happens over years. Sounds like Greek and Latin to you?
Basically, the coolest thing about the RTI option is that it fetches you the on-road price; the price you’ve paid for your car and doesn’t account for any depreciation! And perhaps this can almost make you feel good about your car being stolen or damaged beyond repair. (Well, we did say “almost”! 🙁)
When is RTI Applicable?
Return to Invoice is NOT an option you can claim to compensate for small blemishes and repair bills, like the last dent in your car or the crack on your windshield.
In fact, partial loss can be handled through Own Damage Cover and other addons like ‘Zero Depreciation’, whereas RTI helps you recover financial losses that arise because of a stolen car or a car damaged beyond repair i.e., when you’ve suffered a complete loss of your car.
How do you Calculate it?
When you buy a new car, you will be paying for the ‘On-Road’ Price. This will include the Ex-Showroom Price Plus the Road Tax. And then to top it off, the Registration Charges depending on the class / make of the car. Phew! After all those payments, when your car is totalled, you get back a lesser amount than what you initially paid based on your IDV! We agree, it’s pretty unfair.
This is why, on the RTI cover, your IDV is the same as the ‘On-Road’ price (a.k.a. the total of all those three things you paid). In other words, when your car is stolen or damaged beyond repair, you get the original price you paid while buying it, as compensation.
However, when you make a claim under Total Loss / Constructive Total Loss or Total Theft, the insurance company generally compensates the lower of the following two values:
- The price of the vehicle including the Ex-Showroom Price, the Road Tax and also the Registration Charges at the time of the original purchase.
- The current replacement price of the vehicle including the Ex-Showroom Price, the Road Tax and the Registration Charges, in case the same model is available.
And where does Digit come into this?
We know RTI already sounds pretty cool and you would ideally like to know what is it that Digit offers as part of our Return to Invoice cover. We shall pay the cost of a new vehicle of the same or equivalent make, model, features, specification of the Insured Vehicle;
If the exact same make, model, variant is discontinued, we shall compensate with the last available invoice price of the Insured Vehicle immediately before discontinuation.
What’s great about a Return to Invoice Cover?
Let’s just say that a return to invoice cover is like that one friend, who’ll always be there for you except that it does drift away as time, and years pass by.
- A Return to Invoice cover is best suited for new vehicles, to protect and compensate you in case your vehicle is stolen or damaged beyond repair.
- You should opt for a Return to Invoice cover if you stay in a city or area that is prone to thefts. This way, your motor insurance plan will provide you complete protection in any possible case.
- Generally, when you make a claim in any type of motor insurance, the amount you’re compensated for also accounts for your vehicle's depreciation too. However, in case one has opted for a RTI insurance in their plan, no depreciation would be accounted for and you will only get back compensation based on the last invoice value of your vehicle.
When is the Return to Invoice Cover not Applicable?
The Return to Invoice Cover is not applicable in the following situations:
- If your vehicle is an old one. In this case, you won’t be offered to opt for a RTI insurance.
- If your vehicle is damaged, but only to an extent where it can still be repaired. This is because a RTI insurance can only be benefited from, if the damage caused to your vehicle is beyond repair or worse, stolen.
- If you claim that your vehicle is stolen, but don’t have an FIR or police complaint towards the same to confirm the same. Don’t get us wrong! A RTI insurance is valid for times when your vehicle is stolen. However, you will need to support your claim with relevant documents.
Advantages of a Return to Invoice Cover
- Enhances your car insurance plan by giving your new car better protection from total damage or theft.
- It protects your pocket against losses that you incur if, and when your vehicle is unfortunately stolen. This is because, as a benefit of a return to invoice cover, your insurer will compensate for your car as per the last invoice value, without considering any depreciation and, also accounting for its road tax when you buy your new vehicle again.
- In case your vehicle is damaged to a point where repair is not possible, then your return to invoice cover will help you get the same or similar model of the vehicle, at the last invoice value of the same.
Explain it like I'm five
We're making insurance so simple, now even 5-year-olds can understand it.
A dad has promised his kid a pizza, and they visit a pizza shop to buy him one. The kid selects one for Rs.300, but then goes on to add extra toppings which increases the price to Rs.450. The child eats two slices and gets the rest packed to take home. As the child rushes out in a hurry to meet his dad, the pizza falls from his hand. He’s very disappointed. His dad agrees to buy another pizza for him,and gives him the full Rs.450 instead of Rs.300, so that the kid can buy the entire pizza with his favourite toppings all over again. The dad just Returned to Invoice (RTI) with the pizza.