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- Recent years
- New Car
What is RTI in Car Insurance
We all have a few friends for whom their car is their baby! They’ll painstakingly care for it, look after it and protect it. But one can never quite predict what fate has in store. There is always the risk of your car getting stolen or totally damaged. And while you would still be recovering from that terrible shock, you get another one when you get your insurance money, which would be the depreciated amount, based on your Insured Declared Value or IDV. If this sounds like a nightmare, you need to know about Return to Invoice (RTI) cover in car insurance.
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 Greek and Latin?
Basically, the coolest thing about the RTI option is that it fetches you the on-road price means, the price you paid for your car and doesn’t account for any depreciation! It can almost make you feel good about your car being stolen or totalled. (We said, 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!
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 have suffered total loss.
How do you calculate it?
When you bought your car, you would have paid the ‘On-Road’ Price. That would have included 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 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.
Read more: Use Car Insurance Calculator to calculate the premium of your Car Insurance policy with add-ons
And where does Digit come into this?
We know RTI already sounds pretty cool and you can’t wait to know what Digit offers you 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.
Not only do we pay the First-time Registration Charges of the New Vehicle, we also pay the Road Tax. We believe it’s better to be safe than sorry and even provide you with an Insurance Policy to cover the New Vehicle, which includes Own Damage Cover, Third Party Liability Cover and other Add-on covers.
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.