Invoice Protection – Car Insurance

A basic car insurance policy protects you only from certain liabilities related to your car. But, to fully safeguard it, you need a solid cover that can you compensation as much as the original price of your car. This is aided by an invoice protect cover / return to invoice cover.

What is Invoice Protection Cover?

An invoice protection cover, also known as a return to invoice value cover, is an add-on that provides complete financial security to your car.

How does it work?

You could claim on your car insurance under a lot of circumstances. It could be a broken headlight because of an accident or a theft of your car.

In case of incidents where your car is irrecoverable – because of theft or complete loss in a fire etc – your car insurance company pays you up to the insured declared value of your car. Needless to say, this insured declared value is much lower than the ‘invoice value’ of the car.

With a return to invoice value add-on cover, you could get as much as the invoice value of your car, in case of total loss of the car. The amount that you get also includes the registration charges of your car and the road tax paid.

How much does it cost?

If you buy a return to invoice add-on, you may have to pay around 10 percent more than your comprehensive premium policy. The underwritten premium, however, depends on the make-model and age of your car among other factors.

When does return to invoice cover comes handy?

Situation

You bought a car 6 months back. The invoice value of your car was Rs. 5 lakh.

The depreciated value of your car after six months is Rs 4.75 lakh.

In an unfortunate car accident, your car gets completely damaged.

Your reaction:

When You Have An Invoice Protection CoverWhen You Do Not Have An Invoice Protection Cover
You are sad. Of, course.

But, you do not worry much.

You know that your add-on cover will pay the original value of your car to you.

You could claim as much as Rs. 5 lakh from your insurer.
You are sad.

But, you are also worried.

This is because your comprehensive policy will pay the Insured Declared Value (IDV) of your car. This is equivalent to the depreciated value.

You could only claim Rs 4.75 lakh from your insurer.

Who Should Opt For a Return To Invoice Cover?

WhoWhy
Those who have a new car

Those who live in a theft-prone area
The loss or theft would cause financial as well as emotional damage.

You will be heart-broken if your newest possession is stolen or damaged beyond repair.

A complete financial support in such a situation pacifies you.
Those who have an expensive carAn expensive car will have a higher accumulated depreciation.

Without this add-on, your insurer pays the written down value of your car to you.

This means, in the absence of such a cover, you can bear a signification amount of loss.

Is There a Validity For an Invoice Protection Cover?

  • Such a cover can be taken only for cars that are not older than 3 years.
  • This is because, time increases the gap between the original value and the written down value of your car.
  • After a point of time, it is not feasible for the insurer to bear the depreciation cost of your car.
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