The Return to Invoice Cover provides protection in situations where the vehicle is stolen or damaged beyond repair. In such cases, the insurer has to pay the complete invoice value (ex-showroom price) of the vehicle to you. Not just that, the insurer will also pay you the road tax, the insurance charges, the registration charges that were made at the time of purchasing of the vehicle. Simply put, the insurer gives you back the complete amount that you paid for the car (when you bought it).
For example: Rahul, a 28-year-old guy, got himself a Tata Nexon in July 2023. When Rahul got insurance for his car, he made sure to add the return to invoice feature. In just 2 months of getting the car, bad luck struck and his Nexon was stolen. Luckily, because he had the return to invoice cover, the insurance company paid him the full amount he paid for the car. Hence, he received back the invoice value as well as the registration charges, road tax charges and insurance cost. The important thing to remember is that this cover is only available as an add-on with a comprehensive insurance policy. It cannot be bought with a third party insurance.
In case your car is completely damaged, the insurance company will compensate you in either of the following ways:
In addition to the above, you will also receive the following benefits:
There are certain important points to be kept in mind while buying the cover. These are:
According to any insurance policy, the maximum amount that can be claimed in the Insured Declared Value (IDV) of the vehicle which is calculated at the time of policy purchase. Even in case your vehicle is damaged or stolen, you will be paid back the IDV of the vehicle. The Return to Invoice Cover helps to bridge the gap between the IDV of the vehicle and the purchase price of the vehicle. The IDV is always lower than the purchase price because the depreciation is also included in the IDV. The difference in the IDV of the vehicle and the purchase price is due to depreciation, road tax, registration charges, insurance charger, all of which is compensated under the Return to Invoice Cover.
For example: Let's say Mehul bought a car with a showroom price of 10,00,000. Apart from the showroom price he also pays Rs. 2,00,000 as road tax, registration charges etc. The IDV for a new four-wheeler is 95% of the showroom price, so the IDV for Mehul’s new car is 9,50,000. Now, Mehul’s car gets stolen. If he does not have the Return to Invoice cover, he will be paid back 9.5 lacs from his insurer. He still has to bear a loss of 2,50,000. Had Mehul purchased a Return to Invoice Cover at the time of policy purchase, he would not have to forgo the extra money he paid and he will be paid back the complete 12 lacs he invested in the purchase of a new car.. Isn’t it amazing? The grief of losing your car will be definitely less knowing that you will be reimbursed for the full amount you paid for the car. It does not account for any depreciation! But please note, it is only applicable in case your car is completely damaged or stolen. Even the Zero Depreciation cover sounds as a good option but it only pays back the ex-showroom price whereas the Return to Invoice cover pays you back the road tax, the registration fee and the insurance policy cost as well.
The cover is not applicable under the following circumstances:
To avail the benefits of the add-on, the price of the policy will also go up. Usually, an extra 10% of the premium on comprehensive insurance policy will have to be paid in order to purchase the add-on.
The insurance company is not liable to compensate for the RTI claim under the following circumstances:
Step 1: In case of complete loss, firstly an authorized garage has to prove that your car is beyond repair. In case of theft, you have to wait for 90 days before filing an FIR. After the FIR is filed, you can start your application process.
Step 2: Upload/ Submit all relevant documents of your vehicle such as invoice value, registration certificate, proof of all expenses incurred at the time of purchase of the vehicle to your insurance company.
Step 3: The insurance company will take it up from there. You can follow-up with them from time to time to get an update on your application.