When discussing car insurance, most individuals recognize its fundamental purpose of providing financial protection in the event of accidents, theft, or damages. Nevertheless, some coverage options extend beyond the essentials to offer further tranquility. One such option is Return to Invoice Protection Cover (RTI), a feature that guarantees you receive the original invoice amount for your car if it’s totalled or stolen.
In this article, we delve into the concept of RTI in car insurance, its advantages, functionality, and additional details.

What is Return to Invoice Protection Cover?

Return to Invoice (RTI) is an additional coverage that can be integrated into a comprehensive car insurance policy. It guarantees that if your car is either stolen or deemed irreparable, the insurance provider reimburses you the sum equivalent to the car’s original invoice value instead of the current market value, which is likely to be lower due to depreciation. This coverage is particularly advantageous in a total loss situation, providing the financial assistance necessary to replace your car without incurring a considerable financial strain.

How Does Return to Invoice Cover Work?

RTI in car insurance becomes effective when the insured vehicle undergoes a total loss or theft. A total loss scenario may result from various circumstances, including:

• Fire:
  A vehicle harmed by fire may be classified as a total loss.
• Flood:
  Water damage from floods can make a car irreparable.
• Accidents:
  A serious accident, particularly one that involves larger vehicles, can cause extensive damage.
• Theft:
  If your vehicle is stolen and remains untraceable, RTI covers the complete invoice amount.
  Without RTI, you would receive compensation based on the Insured Declared Value (IDV), calculated after depreciation.
  
  Benefits of RTI Cover in Car Insurance
  The benefits of having RTI coverage are outlined below:

1. Increases the Scope of Coverage
   RTI is not a compulsory element of a comprehensive insurance policy, but it undoubtedly enhances the coverage, thereby adding value. It helps close the gap between the car’s current market value and the price you actually paid. With this coverage, you won’t incur losses resultant from depreciation deductions.
2. Beneficial for New Cars
   For individuals who own new vehicles, RTI can prove particularly advantageous. The emotional turmoil of losing a brand-new vehicle can be significant, and replacing it can incur high costs. Possessing comprehensive insurance with RTI guarantees that you can recoup the full amount, making the replacement experience less financially burdensome.
3. Helps in Case of Theft
   Car theft is a prevalent concern that often leaves owners feeling frustrated. Without RTI, you will only receive a compensation amount after depreciating the value of your car. However, with this add-on, you’ll receive the entire value, accounting for any additional expenses such as registration and road tax.
4. Covers Total Loss Situations
   If your vehicle gets into a serious accident and incurs significant damage that makes repair impossible, it may be deemed a total loss. In these situations, RTI guarantees you receive the original invoice amount, which aids you in acquiring a new vehicle.
   When is the RTI Cover Applicable?
   Generally, RTI cover is provided for cars that are up to 3–5 years old. To claim RTI benefits, you need to present the original purchase invoice and proof of total loss or theft. This ensures that the insurance company reimburses you with the invoice amount without factoring in the vehicle’s depreciated value.
   
   
   
   When is the RTI Cover Not Applicable?
   
   There are certain circumstances in which RTI is not applicable. These consist of:

• Third-party car insurance:
  RTI is not offered under third-party liability coverage, as this policy does not address damages to the insured vehicle.
• Older Cars:
  RTI is typically not available for vehicles older than 3–5 years, as their value has diminished considerably.
• Minor Damages:
  RTI only pertains to total loss situations. If your vehicle is damaged but can be repaired, RTI will not be applicable.
  
  
  How to Calculate RTI in Car Insurance?
  
  
  Calculating the RTI amount is very straightforward. It is based on the original invoice price of the vehicle, which includes the ex-showroom price, registration fees, and road tax. For example, if the invoice value of your car is ₹10,00,000, you would receive this sum in the event of theft or total loss instead of the depreciated value. The comprehensive insurance plan, along with the RTI add-on, guarantees that no depreciation is subtracted.
  Cost of Return to Invoice Protection Cover
  Incorporating RTI into your comprehensive insurance policy will result in a slight increase in the premium. Nonetheless, this additional fee is relatively modest, usually adding 10% to the total cost. Given its considerable financial protection, especially for newer vehicles, the extra premium is often deemed to be a worthwhile investment.
  
  Return to Invoice vs Insured Declared Value (IDV)
  The IDV indicates the market value of your car, which decreases as the car gets older. Conversely, the Return to Invoice Protection cover ensures you receive the original invoice amount of your vehicle without any deductions for depreciation. As a result, RTI provides a more favorable option if you wish to prevent any financial loss due to the car’s depreciation over time.
  
  Is Return to Invoice Protection Cover Worth It?
  The choice to opt for RTI in auto insurance hinges on several factors, including your car’s age, how much you value complete financial protection, and your budget. If you own a new vehicle and want to safeguard your investment against loss or major damage, RTI may be a prudent choice. However, if your car is older or if you lean towards a more basic coverage level, it might not be essential.
  
  Conclusion
  
  Return to Invoice Protection Cover in car insurance presents significant advantages in the event of theft or total loss, ensuring that you receive the original purchase price of your vehicle rather than a settlement amount after accounting for depreciation. It’s an add-on worth evaluating if you desire comprehensive financial protection for your vehicles.
  Disclaimer: The information provided above is solely for illustrative purposes. For additional details, kindly consult the policy wordings and prospectus prior to finalizing the sales.