Return to Invoice (RTI) Cover: Closing the Gap Between IDV and Invoice

IDV starts at 95% of the ex-showroom price and leaves out registration and road tax. If a new car is stolen, the payout can fall well short of what it costs to buy the same car again. Return to Invoice (RTI) — also called invoice cover or invoice protection — is the add-on that closes that gap.

How big is the gap?

For an SUV with an ex-showroom price of ₹9,00,000 and ₹95,000 of registration and road tax (invoice value ₹9,95,000), insured on the purchase date:

The gap grows every year, which is why RTI is most useful in years two and three — if the insurer still offers it.

What RTI pays — and doesn’t

• Pays: on theft, total loss or constructive total loss, the difference between the IDV and the invoice value (as defined in the add-on), subject to the base claim being admissible.
• Doesn’t pay: partial-loss repairs, or the cost of accessories and charges not included in the definition of invoice value.
• Check: whether invoice value includes registration and road tax (usually yes) and the first-year premium (varies).

RTI and car loans

If a financed car is written off early, the outstanding loan can be higher than the IDV. The lender is paid first from the claim, and without RTI you may have to repay the shortfall while also needing a new car. For financed vehicles in the first two or three years, RTI is often the most valuable add-on.

Is it worth the price?

RTI is priced by each insurer, and it is usually a modest add-on relative to the gap it covers. Because theft and total loss are rare but expensive, think of it as protection against the worst case rather than something you expect to use. It makes most sense for new, high-value, financed or theft-prone vehicles.

RTI on a two-wheeler

A motorcycle with an ex-showroom price of ₹1,50,000 and ₹15,000 of registration and road tax (invoice value ₹1,65,000) is stolen at 18 months. Its IDV is ₹1,20,000 (20% depreciation). RTI would add about ₹45,000 to the claim — a large share of the bike’s value for an add-on that is usually inexpensive on two-wheelers.

How an RTI claim is settled

1. The base theft or total-loss claim is admitted and settled on the IDV.
2. The insurer calculates the RTI benefit — invoice value as defined in the add-on, minus the IDV paid.
3. Both amounts are paid together, to the financier first if the vehicle is on loan.

Keep the original tax invoice and the registration and road tax receipts safe — they are needed to prove the invoice value.

Why not just raise the IDV?

Insurers only allow the IDV to move within a band around their schedule value, and IDV never includes registration or road tax. RTI is the only standard way to be paid the full invoice value on theft or total loss.

FAQs