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Make the Most of Your Car Insurance with a Return to Invoice Add-On

Published on July 13, 2020  EST READ TIME: 5 MIN

As a car is a major investment as well as a milestone for anyone, it is extremely important to purchase a car insurance policy to protect yourself against losses due to accidents, theft, natural calamities etc. Now, comprehensive car insurance provides coverage based on the IDV or the Insured Declared value of the car, as decided by the insurance provider. The IDV is based on the market value of the car and is generally the ex-showroom price. This is lower than the on-road price, which includes road taxes, registration etc. This difference between the IDV and the invoice value of the vehicle is covered by the Return to Invoice add-on (RTI). Wondering why you should opt for this? Read on. 

Return to Invoice Add-On Offers Multiple Benefits

Below are some notable benefits of Return to Invoice add-on:-

Compensation as per the invoice value 0 Once you purchase the RTI as an add-on cover along with your car insurance, you can get complete coverage of the car value, including the on-road taxes, registration etc. This will compensate you for the full invoice value of the vehicle in case of theft or damage due to accidents, natural calamities etc.

Available for new cars - It can be mentally, physically and economically stressful if your car suffers any kind of damage, more so if it is a new one. That’s where the RTI add-on helps. It is available on brand new cars and is valid for 3 years from the date of purchase. With an RTI in place, you can be worry-free and drive around with ease.

Helpful in case of total loss - Sometimes, in case of accidents, cars are damaged beyond repair. This means, the repair might cost more than its resale value. In such cases, it is advisable to salvage the car and keep whatever amount you can receive. Return to Invoice can be a boon in such instances as the owner can get compensated for the entire invoice value of the car.

When is RTI applicable?

It is important to know that RTI is not applicable in case of minor accidents or repairs. It is only applicable in case of complete loss of car as in case of theft, natural calamity or a major accident where the vehicle suffers extreme damage and becomes unusable.

So, RTI is applicable in the following cases:-

  • Fire

  • Floods

  • Landslide

  • Accident

In case of accidents, if the cost of the repairs is more than 75% of the IDV, it is considered to be total loss. If you frequently go for out of city travels or live in an area where there is no secured parking or car thefts are common, RTI is perfect for you.

Let’s consider an example here. Say, you have bought the latest SUV, which costs you INR 21 Lakhs. A standard car insurance cover will provide you a coverage of somewhere around INR 16-17 Lakhs, which is equivalent to the ex-showroom price. However, if you take the RTI cover, you can get coverage for the full invoice value i.e. INR 21 Lakhs.

RTI - Cost and Calculation

Since Return to Invoice is an add-on cover that you take along with your car insurance policy, you have to pay 10% extra premium. It is very easy to calculate the sum insured in case of Return to Invoice cover as it is approximately equal to the invoice value of the car. For instance, if your car is worth Rs. 12 Lakhs, the insured value with RTI would be around the same amount.


RTI cover is a must if you want a cover that takes care of the complete cost of the car, including depreciation, road taxes etc. This especially holds true if your car is new, expensive and is susceptible to thefts or road accidents. Buying this add-on cover at a little extra cost can shield you against many unfortunate incidents that may arise in future.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

This blog has been written by

S. Gopalakrishnan | Motor Insurance Expert | 40+ years of experience in insurance industry

A veteran in insurance industry. S. Gopalakrishnan is a name to reckon with in the field of reinsurance, he has headed the Reinsurance department and has rich experience in other fields of motor insurance. He loves to share his opinion on latest topics in the insurance industry and how he can help people in safeguarding their assets using insurance products.

Mr.S. Gopalakrishnan recommends"HDFC ERGO for your vehicle insurance needs, it has always put customer’s interest at the forefront, with round the clock assistance to deal with emergency breakdown issues and hassle free claims process. You can be assured of complete and reliable guidance through the whole process."

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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