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Invoice Protection – Bike Insurance

Team AckoNov 22, 2021

A comprehensive policy covers loss or damage to your vehicle and third party. It covers against the risk of loss or damage caused to your bike due to fire, explosion, self-ignition or lightning, earthquake, flood, burglary, theft, riot, strike, etc. Moreover, it covers third-party liability loss or damage to a third person or property that may incur due to the insured bike.

Invoice Protection – Bike Insurance

However, there are certain conditions, for instance, Total Loss of bike, in which case you need to opt for an add-on cover to maximize the coverage provided under a comprehensive policy.

Invoice Protection is an add-on cover that is beneficial in the case of Total Loss of bike.

What is Invoice Protection Cover?

Invoice Protection Cover helps you to claim Ex-showroom plus other additional charges, in case of Total Loss, i.e. theft or total damage. It helps you to get reimbursed the gap between the Insured Declared Value (IDV) and the additional charges that you pay at the time of bike purchase – registration charges, road tax, and other charges.

In case of Total Loss, an insurance company will pay Insured Declared Value (IDV) of your bike under a comprehensive policy. Whereas, with Invoice Protection Cover, you can claim a total Ex-showroom + Registration charges + Taxes, instead of just IDV.

What is RTI in Bike Insurance?

Through the RTI cover in two-wheeler insurance, ACKO will pay the difference between on-road price of your bike and the Insured Declared Value (IDV) declared in the policy. In case your bike is stolen, lost or damaged beyond repair, we will pay the invoice value of the bike and recover almost the entire cost of the bike, including registration charges and road tax.

Benefits of RTI Add-on Cover:

Your bike insurance should provide all-around coverage. The RTI add-on enhances the standard comprehensive plan to cover your losses in case your bike is beyond repair or is lost/stolen. Here are the advantages of the RTI in bike insurance and pays the entire invoice value of your bike in the following situations:

  • Get the entire invoice value (purchase) in case your bike is stolen or lost.

  • Pays the invoice value in case your bike is totally damages and cannot be repaired due to accidents, fire, earthquakes, floods, riots, vandalism, etc.

  • Coverage includes road tax and registration charges of the bike.

  • Peace of mind knowing your bike is well-protected in case of a total loss.

How Does Return to Invoice Cover Work?

In case your bike is totally damaged due to an accident, you can claim a maximum of the Insured Declared Value (IDV), which is essentially the approximate current market value of your bike. However, the RTI cover bridges the gap between the invoice value and the IDV of your bike. The RTI add-on gets you the on-road price of the bike, thereby, eliminating the depreciation factor. If your bike is totally damaged or is stolen, you get back the entire invoice value through the RTI add-on cover.

When is the Return to Invoice Cover Applicable in Bike Insurance?

The Return to Invoice Cover helps when you want to recover the entire cost of the bike in case of a total loss. The RTI cover is applicable in bike insurance in the following instances:

  • Theft/lost

  • Total loss due to natural and man-made calamities.

  • Damages are beyond repair.

When is the Return to Invoice Cover Not Applicable in Bike Insurance?

Following the reasons when ACKO is not liable to provide coverage under the Return to Invoice cover in two-wheeler insurance:

  • The stolen or lost bike is recovered within 90 days of the theft.

  • The local police have not issued the First Information Report (FIR).

  • Any damage or loss to any non-built-in or non-embedded electronic/electrical and non-electronic/electrical accessories not insured under the insurance policy.

  • You were riding the insured bike without a valid driving licence.

  • You were riding the insured bike in an intoxicated state.

  • The insured vehicle was being used for illegal activities.

  • The insured bike was being used for commercial purposes when it was insured for personal use.

How to Calculate RTI Cover for Bike Insurance?

The cost of a new bike includes the ex-showroom price, road tax and registration charges. However, when you raise a claim for a total loss, you only get the IDV or the approximate current market value since depreciation is taken into consideration. You end up receiving only part of the money that you spent on buying the bike. However, the RTI cover will pay the on-road price of the bike (ex-showroom price, road tax and registration) and the IDV. Effectively, you get back the money that you spent on buying your bike.

How Much Does Return to Invoice Costs?

The Return to Invoice cover is an additional option when you buy comprehensive bike insurance. For a nominal additional premium, you get complete financial coverage in case of a total loss. The cost of the RTI cover depends on the date of manufacture, model and the brand of the vehicle. The Return to Invoice for a two-wheeler can cost you about 10% of the comprehensive insurance policy you have opted for your bike.

Why do you need an Invoice Protection add-on cover?

IDV is the depreciated amount of the Ex-showroom price and does not include registration charges, on-road tax and other charges.

The table below shows how IDV is dependent on Ex-showroom price of your bike and vehicle age.

Two Wheeler Age IDV (% of Ex-showroom)
< 6 months 95%
6 months to 1 year 85%
1 year to 2 years 80%
2 Years to 3 years 70%
3 years to 4 years 60%
4 years to 5 years 50%
5 years+ To be negotiated

The IDV after one year and till two years is 80% of the Ex-showroom price. That means, if you lose your bike during this period you can’t claim more than IDV (80% of Ex-showroom price).

Here’s where an Invoice Protection Cover can help you.

Example:

The Ex-showroom price of Royal Enfield Classic 350 in Mumbai is Rs. 1,36,500.

While RTO + Road Tax + Other charges will cost Rs. 14,300 (excluding insurance).

The on-road price of Royal Enfield Classic 350 in Mumbai is Rs. 1,50,800 (excluding insurance).

Now, if a bike gets stolen after a year, then the insurance company will pay upto IDV i.e. Rs. 1,09,200 (80% of Ex-showroom price).

But with an Invoice Protection Cover, you can claim Rs. 1,50,800.

Benefits of Invoice Protection Cover

Without Invoice Protection With Invoice Protection Cover
Ex-showroom price Rs. 1,36,500 Rs. 1,36,500
IDV after 1 year (80% Ex-showroom)Rs. 1,09,200 Rs. 1,09,200
On Road price (RTO + Road tax + others)Rs. 14,300 Rs. 14,300
Total price (excluding insurance)Rs. 1,50,800 Rs. 1,50,800
Maximum Claim Amount Rs. 1,09,200 Rs. 1,50,800
Difference Rs. 41,600 Nothing

So an Invoice Protection Cover helps you to get invoice price of your bike in case of Total Loss.

Acko offers an Invoice Protection add-on cover on the Comprehensive Bike Insurance Policy.

Invoice Protection add-on covers:

  • Registration charges

  • Taxes (Road Tax, Octrois, etc.)

With the help of this cover in your new bike insurance policy, you can purchase a brand new bike without an additional financial burden on your pocket. Thus, making you worry-free.

Who Should Opt for a Return to Invoice Protection Cover for a Bike?

All should consider adding the RTI cover for two-wheelers; however, it is important especially for the following people:

  • People who live in an area where theft is common.

  • Those who own a new bike.

  • Those who do not have a safe parking space.

  • People who travel long distances and are exposed to road accidents.

  • People who love their bike.

Which Add-on Cover is Better? Zero Depreciation or Return to Invoice?

The Zero Depreciation for bike or Bumper to Bumper add-on cover pays only the ex-showroom price of the bike in case you have chosen the IDV as per the ex-showroom price. However, the Return to Invoice pays the on-road price. Ideally, it even pays the registration charges and the road tax. Going that extra mile certainly pays off especially in case of a total loss.

Things to Remember:

Consider the following guidelines when you buy the Return to Invoice cover for your bike:

  • It provides financial protection for your bike against theft.

  • It provides complete reimbursement compared to the IDV.

  • It provides financial protection in case of a total loss to your bike due to an accident.

  • It offers you peace of mind knowing that it will pay the on-road price of the bike.

Frequently Asked Questions:

The RTI in bike insurance is an essential add-on to the comprehensive policy and here are a few frequently asked questions about the add-on cover:

1) What is the validity of the Return to Invoice cover for bike insurance?

Add-on covers are usually for a period of one-year which you buy along with a comprehensive insurance policy.

2) Does the Return to Invoice cover only apply to the total damage to the bike?

The RTI cover for bike insurance also covers theft or if the insured bike is lost.

3) Why should I choose Return to Invoice or Invoice Protection for my bike insurance?

The Return to Invoice cover is essential for new bikes because it will compensate you with the on-road price of the bike in case it is stolen, lost or damaged beyond repair. Also, in case you stay in an area where thefts are common, then the RTI will help you to recover the entire cost of buying the bike.

4) Are accessories covered under the RTI cover?

No, the RTI add-on does cover accessories. However, you can include them through the Personal Belongings add-on covers.

5) What are the exclusions of the RTI cover in two-wheeler insurance?

You can refer to the above-mentioned list of exclusions under the RTI cover in bike insurance.

6) When can I buy the Return to Invoice add-on for my bike?

You can purchase the RTI cover while buying a new bike insurance policy and while renewing the existing policy.

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