Common add on covers in auto insurance!


Vehicle insurance is an integral part and process of owning a vehicle. While insurance is thought as a recurring annual expenditure by some, there are various auto insurance add-ons that provide users multiple benefits increasing the protective cover for the vehicle as well as the owner. In this day and age of growing needs, various external factors affect each vehicle owner directly or indirectly in some way or the other. Sometimes having general car insurance is not adequate and various add-ons are increasingly becoming an essential part of the auto insurance package.

Click on the following link to find a list of some of the common insurance add-ons offered by various auto insurance companies today.


Is return to invoice cover essential?


Your vehicle price does not end at the ex-showroom price. The road taxes, parking fee, number plate charges etc all add up to increase the final cost of your vehicle. With return to invoice add-on you get a protection towards all these expenses even if you are claiming for a total loss of your vehicle. So if you want adequate protection is a must have insurance add-on.


Hi Sohini,

Return To Invoice (RTI) cover is an option provided by insurers to bridge the gap between the invoice value of the vehicle and its Insured Declared Value (IDV). By availing this coverage, you are liable to get a reimbursement of the entire loss incurred, that is, the on-road price that was paid for the car, if you happen to lose the vehicle. The cost of this add-on is usually 10% more than the comprehensive car insurance policy. This is offered by Insurance providers until the vehicle reaches a predefined age limit.

Using the RTI cover, you cannot make claims for small cracks or dents on your car, as minimal damages do not come under the ambit of this add-on cover. The cover is useful when you are looking to minimise financial losses arising from a stolen vehicle or a car that has been completely damaged.

If you stay in a theft-prone area or if your car is not usually parked at a secure place, you can opt for the RTI add-on cover to enhance your auto insurance. In case you meet with an accident that damages your vehicle beyond repair, you can get a complete reimbursement of the initial cost of the car when you are protected by this cover. This is particularly significant when your car is absolutely new. The main advantage of this cover as opposed to other add-on packages is the fact that you will be able to retrieve the invested on-road price of the car.
The depreciation of a vehicle is generally 5% for the initial 6 months from the date of purchase. It subsequently increases to 10% the next year, and continues rising for each following year. This could amount to a large depreciation value for a car that is relatively new. Hence, all new car owners should consider adding this cover to their comprehensive Car Insurance policy.

It should be noted that the RTI cover is not offered for vehicles that are more than 3 years old. This is due to the fact that a car that is older than 3 years would have a significant amount of wear and tear that cannot be ignored during claim settlement. The insurer would practically be at a loss if they offered you this facility.

When the insurer settles a claim, they may either pay you the entire on-road price of the car or exclude the cost of specifics, that is, road tax, registration charges, etc., that are specified in the invoice. They may also compensate you on the basis of a percentage in addition to the ex-showroom price of your car. The insurance policy documentation will elaborate the scope of settlement; so it is important to read through the documents carefully.

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BB Expert