The pain of a stolen car is similar to a punch to your heart. It will need some time to heal. Luckily, a car insurance policy is here to speed up the process. It will cover all the losses when your car gets stolen. This is possible only when you buy Return to Invoice (RTI) add-on cover.
Return to Invoice cover gives you the full purchase value of your car in case it is stolen. In easy terms, RTI will give extra payment to fill the gap between IDV value and the purchase price of the car. However, in normal cover, you only get Insured Declared Value (IDV) of the car. The cover is available at cheaper rates & the price would be 10% of the basic premium.
Insured Declared Value: The current market price of a vehicle that is calculated by taking annual depreciation into account.
Purchase Price: The final cost is written on the invoice of the car including road price, road taxes, registration cost & dealer-handling expenses.
Who Needs RTI Cover For a Car?
- If a reliable parking place is not available around your home and you reluctantly park your car in an unsafe region, then RTI is an option.
- Depreciation is another factor. The rate of depreciation applicable to a new vehicle is 5% for starting 6 months from the date of purchase. However, for the second year, this rate increases to 10%. This trend of increasing depreciation persists as long as the vehicle is used. For those new car owners, depreciation can be a threat as they will get very little IDV value against damages. So, RTI cover becomes useful in fighting depreciation.
- Cars who are less than 3 years of age should take this cover.
- Expensive and luxury cars are highly recommended to add this cover in their car insurance policy. Its reason- higher chances of suffering from theft and burglary in comparison to economical cars.
When To Make a Claim?
You should make a claim only when someone steals your car. Make sure you first report the claim to police officers present in your locality. File an FIR by describing the event. This is necessary to establish that the car was not taken away due to your negligence. After finishing the above duties, approach the car insurance provider.
Disclose all the details of the incident like time, date, location, to the insurer. Also, show the FIR report. The claim may get rejected if you have not informed the police first. Also, keep car keys with you as this is the proof for your stolen car and not happened due to negligence. The insurer will ask you to furnish a list of documents for claim approval.
Verification of the claim will be organized by the company’s representative. The claim is verified and cleared for payment. As you have Return to Invoice cover, the insurer will give you the purchase price of the vehicle lost.
Claim Payment Process (Reimbursement of Loss)
To understand this, let’s take an example of Mr. Yadav who purchased a comprehensive cover for his new Honda Civic. The invoice or purchase price of the car is Rs. 21 lakhs. Mr.Yadav also added Return-to-Invoice cover to your comprehensive car policy as the car is new. This way he made himself tension-free from theft like events.
In the third year of the policy, his car got stolen at night parked 100 meters away from his home. The next morning while leaving for the office, Mr.Yadav found that his car was not present in the parking place.
He ran to the nearest police station and briefed the incident. He also contacted his insurer as he very well knows that claim is acceptable.
As Mr.Yadav fulfills the whole claim criteria to avail the RTI cover, the company pays out the original car price.
The reimbursement is usually made in three ways-
- The entire road price amount of the insured car including the expense of specifics will be reimbursed.
- Payment of road price including the first time registration fee and road tax printed over the invoice/bill.
- Payment of ex-showroom prices plus an extra percentage.
Which companies offer Return To Invoice cover?
In India, there are several companies that give the ‘Return to Invoice’ option to the insured car owner. Some popular companies are stated below-
- ICICI Lombard
- Bajaj Allianz
- TATA AIG insurance
- Bharti Axa
- HDFC ERGO
- National Car Insurance
- Oriental Insurance Company
Annual Premium Prices of RTI
The premium of RTI cover depends on the cost of the car. Lower the cost of cars lower would be the annual premium. Also, the premium of an add-on is always lesser than the basic premium.
|Price Of The Car||Return To Invoice (Premium)|
|Less than 5 lakhs||Rs 1000|
|Between Rs 5 lakhs to 10 lakhs||Rs 2000|
|Rs 10 lakhs to 15 lakhs||Rs 3000|
Note: These are the estimated prices and can vary from company to company.
Conditions Under Which RTI Does Not Work
- This cover is not valid for cars who are more than 3 years old.
- The cover is not valid for small damages and repairs in your car.
- Any damages due to explosion, fires, accidents, collision & explosion are not covered under RTI cover.
- The cost of electrical/electronic or non-electronic accessories (mentioned in the invoice) additionally fitted in the car which is not in-built is not compensated.
- A claim is rejected if the FIR proving the theft of the car is not issued or submitted.
- If your car is imported, it will not be covered.
- Car models whose production is closed cannot take this add-on.
With the mounting cases of car thefts, it is safe to buy return to invoice cover with your car insurance. Within days, you will get the required claim amount without going through heaps of trouble. Reality check- only a few companies are able to offer an easy claim process. Luckily, PolicyX.com insurance company is one of them. They are known to offer superb assistance in the time of need. So, whenever you decide to buy an RTI cover, make sure to contact them.