RTI in Car Insurance

RTI full form in car insurance- return to invoice is an add-on cover that allows you to receive the invoice value of the car without any deduction. RTI meaning in car insurance is simply that in case of a total loss of theft, you receive maximum financial protection to recover from the loss.

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 four-wheeler insurance plan, the insurer pays the sum insured as compensation in such cases. However, the claim amount is calculated after depreciation is deducted.

Car insurance offers financial protection in the event of a claim based on IDV and the current market value of your vehicle. So, in case of a total loss or theft, you will receive the claim amount depending on the plan’s IDV.

However, if you opt for RTI add-on cover while buying our car insurance plan, you will receive full invoice value in the same event. This add-on ensures complete reimbursement, including road tax and registration fees, in case of total loss or theft. With the RTI cover, you get the following claim settlement:

Claim Amount (with RTI) = Ex-showroom price + Registration Charges + Road Tax

Here is how it works:

Imagine your car’s purchase price was ₹10 lakhs. After two years, its IDV depreciates to ₹7.5 lakhs. A standard policy would reimburse ₹7.5 lakhs for total damage. However, with RTI, the insurer compensates ₹10 lakhs—the invoice price.

RTI in car insurance is applicable during the following:

• Theft, when the car is unrecoverable.

• Total damage due to fire, severe accidents, or natural calamities like floods and earthquakes.

This add-on is typically valid for cars up to three years old, offering owners financial security against depreciation losses.

Rate of Depreciation

For the standard car insurance claims, the IRDAI sets the depreciation rate per the age of the vehicle. Here are the current rates:

This means that if your car is, say, 2-3 years old and is stolen or damaged beyond repair, the insurer will deduct 30% of your claim amount before processing it. Thus, without the RTI cover, the above rates will be applicable during claims.

Also Read: Zero Depreciation in Car Insurance

You can opt for a return to invoice cover under the following circumstances:

With an Active Comprehensive Plan:

If you hold a comprehensive car insurance plan, you can easily add return-to-invoice coverage when renewing your policy. Here’s how:

• Visit the official TATA AIG website, click the “renewal ” tab and select “car”.

• Enter your car’s registration number or policy details to proceed.

• Review the existing plan and upgrade the protection by opting for the RTI add-on car insurance.

• Verify your choice and complete the payment to receive the renewed policy document.

Without an Active Comprehensive Plan:

If you do not already have comprehensive coverage, you can switch your policy during car insurance renewal to include a return-to-invoice cover.

• Alternatively, you can choose to terminate your existing plan and switch to a new policy offering return to invoice cover immediately. Here’s how to buy our car insurance plan:

• Visit the official TATA AIG website and click on “personal” dropdown. Select car insurance.

• Enter your car registration number, make and model and manufacturing year.

• Select a suitable car insurance plan, such as our comprehensive car insurance.

• Select the RTI option add-on and review the quote.

• Complete the payment and receive the policy document instantly over email.

New Car Buyers: If you are buying a new car, this cover is especially important until it is at least three years old. It ensures you receive the entire invoice value in case of total loss.

Luxury Car Owners: Luxury car owners invest a hefty amount of money in buying and accessorising their cars. Thus, it is best for them to ensure full reimbursement.

Loan Holders: If you have an ongoing car loan, it is ideal to use this option, as it relieves the loan repayment stress in such an event.

Residents of High-Risk Areas: Those living in high-risk locations with high theft or accident rates are at a higher risk of losing their cars. Thus, it is beneficial to have this cover added.

First-Time Car Owners: RTI add-on cover offers complete protection, easing the financial burden and giving peace of mind.

Frequent Travellers: It is essential for those extensively using their cars, increasing risk exposure.

Owners of Rapidly Depreciating Cars: The add-on protects cars that lose value quickly due to depreciation.

Return-to-invoice car insurance is applicable in specific situations to provide maximum financial relief:

Theft of the Vehicle: If your car is stolen and cannot be recovered, RTI ensures you receive the full invoice value, including road tax and registration fees.

Total Loss or Constructive Total Loss (CTL): In case the repair cost exceeds 75% of the car’s IDV, the vehicle is considered a total loss. In this case, RTI covers the gap between the IDV and the invoice price.

New or Recently Purchased Vehicles: This is most relevant during the initial years of ownership when depreciation significantly impacts the car’s market value.

Accidents Causing Irreparable Damage: RTI ensures you are compensated for the full invoice price if your car is damaged beyond repair.

This add-on is ideal for those who want comprehensive financial protection against depreciation losses in such unfortunate circumstances.

Also Read: Constructive Total Loss in Car Insurance

Partial Damage or Repairs: It does not apply to minor accidents or repairable damages. Only total loss or theft situations are eligible.

Vehicles Beyond a Certain Age: Typically, cars older than 3 to 5 years are not eligible for RTI coverage.

Commercial Vehicles: Return-to-invoice car insurance is generally offered only for private cars and excludes vehicles used for commercial purposes.

Policy Lapses: If your car insurance policy has expired or the RTI add-on was not renewed, you cannot claim this coverage.

Modifications and Accessories: RTI does not cover the cost of aftermarket modifications or accessories installed after purchase.

Illegal Activities or Negligence: Losses arising from illegal activities, drunken driving or negligence by the owner are not covered.

Understanding these exclusions ensures you are aware of when RTI will not provide financial assistance.

Note that you must submit a final investigation report in case you are claiming your car insurance for theft.

• Visit our claims support page or call us at 1800-266-7780 to report the incident and file a claim.

• Carefully fill out the details of the damage to your car and the incident in case of theft.

• Our expert surveyor team will inspect your car.

• Submit policy-related and other necessary documents. You must also submit a stamped FIR copy saying that your car is untraceable in case of theft or a letter from an authorised garage that proves that your car is beyond repair.

• Once the claim is approved, you will receive the entire invoice for your car.

Complete Protection: RTI in car insurance ensures you receive the full invoice price of your car, covering the cost of registration, road tax and insurance premiums in case of total loss or theft.

No Depreciation: Unlike regular car insurance, which compensates for the depreciated value of the car, RTI add-on car insurance covers the original cost. It does not account for depreciation, ensuring it does not affect your reimbursement.

Financial Security: RTI provides financial peace of mind, helping you avoid out-of-pocket expenses when replacing a new car after it is damaged or stolen.

Loan Repayment Help: If you have an outstanding loan on your car, RTI helps you repay the balance by providing the full invoice value, reducing the financial strain.

Customisable Coverage: RTI can be easily added to your standard car insurance policy, making it an ideal upgrade to increase your vehicle's protection.

No Hidden Costs: The reimbursement includes not only the car's value but also additional costs like taxes, providing complete compensation.

Steps to Calculate RTI

Determine the Original Invoice Price:** This includes the ex-showroom price, road tax and registration fees.

Assess the Insured Declared Value (IDV): This is the car’s current market value after depreciation.

Calculate the Depreciation Gap: Subtract the IDV from the invoice price.

RTI Claim Amount: The claim amount is the difference between the invoice price and IDV.

Formula:

RTI Claim Amount = Invoice Price - IDV

TATA AIG approves RTI claims by comparing two values:

Invoiced Car Price: The total ex-showroom price, road tax and purchase restoration fees.

Car Replacement Price: This considers the ex-showroom price, registration expenses and applicable road taxes.

The sanctioned RTI claim amount is determined to be the lesser of these two figures. For example, if the invoiced car price is ₹10 lakhs and the replacement price is ₹9.5 lakhs, the claim amount will be ₹9.5 lakhs, ensuring full financial protection.

RTI add-on cover plays a significant role in ensuring extensive financial security for car owners. By opting for this add-on, you ensure that you recover from a total loss of your vehicle without the financial burden. Since standard insurance plans do not offer such extensive coverage, a theft or total loss can result in a reduced claim amount.

To understand how RTI cover impacts and benefits car owners, let us take a look at the following example:

Let us assume that Aditi purchased a brand new Hyundai Electric Creta for around ₹20 lakhs. She lives in a flood-prone area that often experiences huge floods. One such incident resulted in her car being swept away within just two years of purchase. All efforts to locate it proved futile. Losing a hefty investment can be a significant financial loss.

Let us look at the claim amount she would receive in such a condition from a standard car insurance policy and with RTI insurance cover.

This illustrates the significant impact of RTI in recovering financial losses incurred due to theft or total loss. With RTI insurance, you are protected from financial loss, as you are eligible to receive the full invoice amount in case of total loss or theft of the insured vehicle.

Return to Invoice (RTI) and Insured Declared Value (IDV) both serve distinct purposes in car insurance coverage. Here is a comparison of IDV vs RTI:

• RTI cover is exclusively available for new cars, and cars up to three years old are eligible for its benefits.

• An add-on RTI cover means it is not included in the basic car insurance plan.

• To buy RTI, you must have a comprehensive car insurance plan. This add-on is not compatible with a third-party car insurance policy.

• RTI cover renewal must be initiated annually, along with comprehensive premium renewal. The cost will depend on the car’s last or latest invoiced value.

• RTI cover provides complete reimbursement based on the invoice amount. This ensures you receive the total amount as per the invoice.

• RTI cover applies only to total loss and theft scenarios and does not extend to damage resulting from minor road incidents

Return to invoice car insurance is an optional add-on available with our comprehensive car insurance that provides extensive financial protection. While you will be required to pay an additional premium amount to buy RTI in motor insurance, its impact on the claim amount justifies this cost. RTI in car insurance means​ that you are financially covered with the entire invoice amount of your car in case of total loss or theft.

You can use TATA AIG’s free online car insurance calculator to assess the impact of the add-on cover on the premium amount. You can also instantly make changes to the policy to match your budget and requirements. Additionally, you can compare car insurance online using the free tool and choose the best-suited plan.

With TATA AIG’s wide-ranged car insurance plans, you get comprehensive coverage against fire, natural calamities, theft, accidents and more. In addition, benefit from our exceptional customer service with 24/7 customer service, a high claim settlement ratio and over 650 claim experts across India for valuable assistance during critical times.