Return to Invoice in Car Insurance

The core purpose of a car insurance policy is to offer financial protection for damages to a third-party property or person and/or to the insured vehicle based on the coverage offered.

Many reputed insurers offer riders or add-on covers to help you customise your car insurance policy. Buying the right car insurance plan requires selecting the coverage carefully and selecting add-ons based on your requirements. One such add-on is the Return to Invoice cover.

Today, we will explain the return to invoice insurance meaning and discuss everything that you need to know about it to make an informed decision.

What is Return to Invoice Cover in Car Insurance?

When you buy a comprehensive car insurance policy, you get coverage for third-party liabilities and damages to your car due to an accident, man-made disaster, natural calamity, fire, collision, or theft.

In other words, these policies are designed to offer the maximum coverage for a fixed premium. However, comprehensive policies have certain terms, limits, and exclusions too.

For example, If the insured car is stolen and the police declare it non-traceable, then you can file a claim with the insurance company. As per the usual terms of a comprehensive plan, the insurer pays the sum insured as compensation in such cases. However, the claim amount is calculated after deducting depreciation.

Return to Invoice or RTI in car insurance is an add-on cover that allows you to receive the invoice value of the car without any deduction.

What is Depreciation Deduction and How Does Return to Invoice Work?

The Insurance Regulatory and Development Authority of India (IRDAI) determines the depreciation rates for all vehicles in the country. Here are the rates:

Age of Your Car Percentage of Depreciation
0 to 6 months 0.05
6 months to 1 year 0.15
1 year to 2 years 0.2
2 years to 3 years 0.3
3 years to 4 years 0.4
4 years to 5 years 0.5