For a car owner, insurance is the best option to safeguard his investment in the vehicle. It can help him in numerous ways if the car is damaged completely or stolen. A Comprehensive Insurance Policy can help one save his pocket in the event of damage caused to the car. Damages can happen due to natural calamities like earthquake or flood as well as manmade acts such as riots or any terrorist activity. There are various add-ons provided by the car insurance companies in this segment, among which one notable add-on is ‘Return to Invoice’ which is also popularly known as RTI.
After the purchase of the car, its IDV goes down due to the depreciation over a period. Usually in the first six months of a new car, this rate is 5% while from the next year onwards it increases to 10%. This is known as the depreciation of the vehicle with time. In case the vehicle is stolen or lost or has met with an accident where no repair is possible, it is considered as total loss. In such a case, the insurer offers the value as per IDV of the car. When the car is new, the client may have to bear a huge loss even if he is not at any fault.
To overcome such trouble, one can go for the add-on known as RTI. As per this add-on, one can have the value of the car as per the on-road price of the same.
More about the term RTI
RTI is an add-on offered to the car owners who have bought a car recently. It can be taken for a car which is not more than three years old. Obviously, for older cars, the insurer may be at a loss with such clause; and hence to protect the interest of the insurer as well as the client, the clause of 3 years is maintained. The major benefit under this add-on is one can have the value of a new car (i.e. ex-showroom price of the car) if it suffers a major damage.
Is there any exclusion?
There are also a few exclusions for clients who want to go for this add-on. Here, the price of the car is paid under RTI; but there are some deductions such as Road Tax, Insurance and other taxes. Therefore, one has to bear the expenses to that extent and rest of the amount is borne by the insurer. Here one needs to note that different service providers may have a different age limit of the car for this add-on; hence one needs to check the same in-depth.
For whom is it more useful?
This add-on can be highly beneficial for those car owners who live in an area where the car theft ratio is much higher. They can save their back from the additional expenses with the help of this add-on. However, the risk of total loss is always there, and for this reason, it can be beneficial to all other buyers too. The main aspect one needs to note here is that the car must not be older than three years else this add-on is not offered by the service providers. Besides that, one should also keep in mind that this add-on may also raise your premium of a comprehensive plan by up to 10 percent.
The applicability explained in simple words
This add-on is not for making small claims caused due to accident, as they cannot be taken as a total loss of the car. It is to safeguard the investment in the event of an accident in which the car is damaged severally, and repair can prove costlier than buying a new one. It can be applied in the event of a lost car or damage to the car due to a natural disaster. For the accurate applicability of this add-on, one needs to go through the policy document carefully.
If you have own parking and stay in a place where car theft is not a common event, you can avoid going for this add on as it may significantly increase the premium of your insurance plan.