You bought a brand new Creta or Nexon for ₹15 Lakhs (On-Road Price).
You love your car. But 8 months later, disaster strikes.
Your car is stolen from outside your house, or it gets submerged in a flood and declared a "Total Loss."
You expect the insurance company to pay you ₹15 Lakhs so you can buy the same car again.
The Shock: They send you a check for only ₹12.5 Lakhs.
Why? Because of Depreciation on your IDV.
You just lost ₹2.5 Lakhs. The only way to stop this is a small add-on called Return to Invoice (RTI).
Disclaimer: Insurance add-ons vary by insurer (e.g., Acko, Digit, ICICI Lombard). RTI is usually available only for cars up to 3-5 years old.
New Car Stolen?
1. The "IDV" Trap (Insured Declared Value)
When you buy car insurance, the "Sum Insured" is called IDV (Insured Declared Value).
The IDV is NOT the price you paid. It is the current market value of the car.
- Day 1: Your car's value drops by 5% the moment it leaves the showroom.
- Month 6: It might be depreciated by 10-15%.
- Year 1: Standard depreciation is 20%.
So, if your ₹15 Lakh car is stolen after 1 year, the insurer legally only owes you the depreciated value (approx. ₹12 Lakhs).
2. What Is "Return to Invoice" (RTI)?
Return to Invoice (RTI) is an add-on cover that bridges the gap between the IDV and the Invoice Price (the price you originally paid).
🆚 Scenario: Car Stolen After 11 Months
- Without RTI: You get the IDV = ₹12.5 Lakhs.
(You lose ₹2.5 Lakhs). - With RTI: You get the On-Road Price = ₹15 Lakhs.
(Includes Registration Charges + Road Tax).
Result: For an extra premium of ₹1,000 - ₹2,000, you save ₹2.5 Lakhs.
3. RTI vs. Zero Depreciation (Don't Confuse Them!)
Many people confuse these two. They are completely different.
| Feature | Zero Depreciation (Zero Dep) | Return to Invoice (RTI) |
|---|---|---|
| When it works | Minor Accidents / Repairs (Dents, Bumpers) | Theft or Total Loss Only (Car is gone) |
| What it covers | Cost of Parts (Plastic/Metal) without depreciation | Gap between IDV and Purchase Price |
Pro Tip: You need BOTH. Zero Dep for daily dents, RTI for the ultimate disaster.
4. Crucial Legal Rules (The Fine Print)
RTI sounds magical, but there are strict conditions:
- The "75% Rule": Your car is only declared a "Total Loss" if the repair cost exceeds 75% of the IDV. If the repair cost is 70%, they will repair it, and RTI will NOT trigger.
- The "Non-Traceable Report": In case of theft, filing an FIR is not enough. You must obtain a "Non-Traceable Report" (NTR) from the court/police, proving the police failed to find the car. Without this document (which can take 3-6 months), the insurer won't pay the RTI amount.
5. Does It Cover Road Tax?
Yes! A good RTI policy covers the On-Road Price, which includes:
- Ex-Showroom Price
- Registration Charges (RTO)
- Road Tax
Standard insurance never covers Road Tax/RTO charges in a claim. Only RTI does.
Protect Your Investment
A car is the second most expensive thing you will buy (after a house).
Don't let a thief or a flood wipe out 20% of its value.
Check your policy renewal notice today. If you don't see "Return to Invoice" in the add-ons list, tick that box immediately. It costs less than a tank of petrol.
Action Plan:
- Check your car's age. Is it under 3 years? (Some insurers offer it up to 5 years, but don't risk missing the renewal).
- Compare quotes with and without RTI (the difference is typically small).
- Ensure the RTI cover specifies "On-Road Price" (not just Ex-Showroom).
Helpful Resources:
Acko: What is Return to Invoice?
PolicyBazaar: RTI Add-on Explained
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