What is RTI in car insurance

RTI stands for Return to Invoice. It is an additional add-on that can be purchased along with a car insurance policy. You would simply need to purchase an RTI add-on and pay the required additional fee to avail of RTI coverage.
The article aims to help you in understanding RTI in car insurance better. Topics covered would be:

• What is RTI in car insurance?
• Benefits of return to invoice (RTI)
• Eligibility of RTI
• Example of RTI 

What is RTI in car insurance ?

A Return to Invoice (RTI) cover gives the policyholder the ability to claim towards the total cost of the vehicle (on-road price, including road tax). The RTI cover bridges the gap between the Insured Declared Value (IDV) and the on-road price of the car. If a person takes an RTI cover along with his car insurance and is met with a serious accident, he is eligible for making a claim on the car’s on-road price, and not just the IDV.

This difference between the RTI price and the IDV price can be many lakhs, and it would be a prudent choice for new car owners to opt for an IDV add-on along with their car insurance.

Benefits of Return to Invoice (RTI)

Mentioned within are some of the notable benefits of an RTI add-on:

Enhanced coverage: A person will be eligible for a much larger coverage if he/she opts for an RTI coverage compared to a regular IDV coverage.

Relatively cheap: An RTI Rider can generally be availed for less than 10% of the total car insurance premium.

Theft protection: The policyholder will be compensated up to the billing amount of the car in the event of a theft. This amount can be far greater compared to just the IDV value of the vehicle.

Beneficial when a car is totaled: The RTI rider truly protects the policyholder when the vehicle is totaled. This is where the insurance company will compensate the holder with the billed value, not just the IDV.

Eligibility of RTI 

• Brand new cars are eligible for RTI coverage.
• Cars over the age of 3 years will not be eligible for RTI add-ons
• This type of cover will only provide protection if the car is totaled (unrepairable). If the car can be repaired, RTI will not be applied.

Example of RTI 

Let us assume that Mr. Shantilal has bought a car insurance policy with RTI cover for his new Honda City. After 3 months, his vehicle is stolen. He files an FIR with the local police station, intimates the insurance company, and duly fills the claim-related documents.

Post this, the insurance company does its due diligence and disburses the total billed value of the vehicle (Rs 15 Lakhs) to Mr. Shantilal. Had Mr. Shantilal not taken the RTI cover, the insurance company would only provide him compensation up till the vehicles IDV (which was Rs 7 Lakhs as per his policy)