1. Home
2. Blogs

The Importance of Invoice Price Cover in Car Insurance

• 
• 
• 
• 0
• 0

When it comes to car insurance, most people understand its basic purpose of offering financial protection in case of accidents, theft, or damages. However, certain coverage options go beyond the basics to provide additional peace of mind. One such option is Return to Invoice Protection Cover (RTI), a feature that ensures you get the original invoice value of your car if it's written off or stolen.

In this blog, we explore what RTI in car insurance is, its benefits, how it works, and more.

What is Return to Invoice Protection Cover?

Return to Invoice (RTI) is an add-on coverage that can be added to a comprehensive car insurance policy. It ensures that if your car is stolen or damaged beyond repair, the insurance company reimburses you the amount equivalent to the car’s original invoice value instead of the current market value, which would be lower due to depreciation. This cover is particularly beneficial in case of a total loss scenario, offering you the financial support needed to replace your car without a significant financial burden.

How Does Return to Invoice Cover Work?

RTI in car insurance is activated when the insured vehicle experiences a total loss or theft. A total loss situation could arise from several factors, including:

• Fire:

A car damaged by fire can be considered a total loss.

• Flood:

Water damage from floods can render a car irreparable.

• Accidents:

A severe accident, especially one involving larger vehicles, may cause significant damage.

• Theft:

If your car is stolen and cannot be traced, RTI covers the full invoice amount.

Without RTI, you would only be compensated based on the Insured Declared Value (IDV), which is calculated after depreciation.

Benefits of RTI Cover in Car Insurance

The advantages of having RTI cover are as follows:

1. Increases the Scope of Coverage

RTI is not a mandatory part of a comprehensive insurance policy, but it certainly adds value by enhancing the coverage. It helps bridge the gap between the current market value of the car and what you actually paid for it. With this cover, you won’t have to bear loss due to depreciation deduction.

2. Beneficial for New Cars

For new car owners, RTI can be especially useful. The emotional distress of losing a brand-new car can be overwhelming, and replacing it can be expensive. Having comprehensive insurance with RTI ensures that you can recover the full amount, making the replacement process less financially painful.

3. Helps in Case of Theft

Car theft is a common issue that leaves owners frustrated. Without RTI, you will only get a compensation amount after deducting the depreciated value of your car. However, with this add-on, you'll receive the entire value, considering any extra costs such as registration and road tax.

4. Covers Total Loss Situations

If your car is involved in a major accident and suffers extensive damage that makes repairs impossible, it could be declared a total loss. In such cases, RTI ensures you get the original invoice amount, which can help you purchase a new vehicle.

When Ii the RTI Cover Applicable?

Typically, RTI cover is available for cars up to 3–5 years old. To claim RTI benefits, you must submit the original purchase invoice and proof of total loss or theft. This ensures the insurance company compensates you with the invoice amount without considering the vehicle's depreciated value.

When is the RTI Cover Not Applicable?

There are specific situations where RTI does not apply. These include:

• Third-party car insurance:

RTI is not available under third-party liability coverage, as this policy does not cover damages to the insured vehicle.

• Older Cars:

RTI is usually unavailable for cars older than 3–5 years, as their value has depreciated significantly.

• Minor Damages:

RTI only applies to total loss scenarios. If your car is damaged but repairable, RTI will not cover it.

How to Calculate RTI in Car Insurance?

Calculating the RTI amount is quite simple. It is based on the original invoice value of the car, including the ex-showroom price, registration charges, and road tax. For instance, if your car’s invoice value is ₹10,00,000, you would receive this amount in case of theft or total loss rather than the depreciated value. The comprehensive insurance policy, along with the RTI add-on, ensures that no depreciation is deducted.

Cost of Return to Invoice Protection Cover

Adding RTI to your comprehensive insurance policy will slightly increase the premium. However, this additional charge is relatively minimal, generally adding 10% to the overall cost. Given its significant financial protection, especially for new cars, the extra premium is often considered well worth it.

Return to Invoice vs Insured Declared Value (IDV)

The IDV represents the market value of your car, which depreciates as the car ages. In contrast, the Return to Invoice Protection cover ensures that you get the original invoice value of your car without any deductions for depreciation. Therefore, RTI offers a better option if you want to avoid any financial loss due to the car's depreciation over time.

Is Return to Invoice Protection Cover Worth It?

The decision to opt for RTI in auto insurance depends on various factors, including the age of your car, how much you value having full financial protection, and your budget. If you have a new car and want to protect your investment against loss or major damage, RTI could be a wise addition. However, if your car is older or you prefer a more basic level of coverage, it may not be necessary.

Conclusion

Return to Invoice Protection Cover in car insurance offers substantial benefits in case of theft or total loss, ensuring you receive the original purchase price of your vehicle rather than a settlement amount after deducting for depreciation. It's an add-on worth considering if you want comprehensive financial protection for your vehicles.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

RELATED ARTICLES

Return to Invoice vs Comprehensive Car Insurance

Top Situations Where Return to Invoice Cover is Essential

Difference between Zero Depreciation & Return to Invoice

Safeguarding Your Luxury Car with RTI Coverage

Top Car Insurance Tips for 2025

---

• 
• 
• 
•