IDV is the maximum insured value that will be paid by your policy in case of a total loss or theft, after depreciation. Return to Invoice (RTI) is an add-on that covers the gap between your car's depreciated value and its original invoice value usually the ex-showroom price plus registration and road tax.
The difference is simple: IDV is set as the maximum value of your car your insurer will cover while RTI can cover the gap between gradual depreciation in car's market value and original cost.
What are the key differences between IDV and RTI?
The main difference is that IDV is the current, depreciated market value of your car, while RTI is an add-on that upgrades your payout to the original purchase price if the car is stolen or totaled.
| Key Difference | IDV | RTI |
|---|---|---|
| Full form | Insured Declared Value | Return to Invoice |
| What it means | The policy's insured value for the car after depreciation | An add-on that covers gap between IDV and original invoice value |
| Coverage | Provides coverage in case car is stolen or treated as a total loss | Provides coverage with an accepted theft or total-loss settlement |
| Covers | The depreciated vehicle value, excluding registration, road tax and insurance cost | The invoice-value gap, based on ex-showroom price plus registration and road tax |
| Eligibility | Applies to comprehensive or own-damage car insurance | Generally available for newer cars, commonly up to 3 years old |
| Cost | Built into the own-damage premium calculation | Usually adds about 10 to 15% to the premium for the add-on |
V How is IDV for a vehicle calculated?
IDV is calculated from the manufacturer's listed selling price of the vehicle at the start of the policy period, reduced by depreciation for the car's age. The formula is: IDV = listed selling price minus age-based depreciation.1 IDV deliberately excludes registration charges, road tax and insurance cost. This is why the IDV of a car can be lower than the amount you paid on the road, even when the car is fairly new.
| Age of the Car | Depreciation Used for IDV |
|---|---|
| Not exceeding 6 months | 5% |
| More than 6 months but not more than 1 year | 15% |
| More than 1 year but not more than 2 years | 20% |
| More than 2 years but not more than 3 years | 30% |
| More than 3 years but not more than 4 years | 40% |
| More than 4 years but not more than 5 years | 50% |
| More than 5 years | Mutually agreed value between insurer and policyholder |
For example, if a car's selling price for IDV is set at Rs 10 lakh, the depreciation is 20%, in this case IDV becomes Rs 8 lakh.
You can also use the IDV calculator to instantly calculate a vehicle's IDV.
What does the RTI add-on cover as part of car insurance?
RTI covers the gap between the selected IDV and the car's original invoice value.
RTI works only when the insurer has already accepted a total loss or theft claim under the car insurance policy. If your car is repairable and the claim is for partial damage, RTI does not apply.
| Invoice Component | Included in IDV? | Included in RTI Invoice Value? |
|---|---|---|
| Ex-showroom price | Yes, after depreciation | Yes |
| Registration charges | No | Yes |
| Road tax | No | Yes |
| Insurance cost | No | No |
Did you know?
A car can be treated as a constructive total loss when the repair cost is about 75% of the IDV. For a car with an IDV of Rs 9.5 lakh, that threshold is about Rs 7.12 lakh. This is why RTI can matter even when the car is not stolen.
Difference in claim payout with and without RTI add-on
Difference in claim payout with and without RTI add-on
| Claim Scenario | Without RTI | With RTI |
|---|---|---|
| Original invoice value | Rs 13.5 lakh | Rs 13.5 lakh |
| IDV at claim time | Rs 9.5 lakh | Rs 9.5 lakh |
| RTI gap paid | Rs 0 | Rs 4 lakh |
| Total claim payout before any policy-specific deductions | Rs 9.5 lakh | Rs 13.5 lakh |
In this example, RTI increases the claim payout from Rs 9.5 lakh to Rs 13.5 lakh because the add-on pays the difference between the IDV and invoice value.
Is RTI the same as zero depreciation?
RTI is not the same as zero depreciation. Zero depreciation is relevant for repair claims because it reduces or removes depreciation deductions on replaced parts. RTI is relevant for theft or total loss because it bridges the gap between IDV and invoice value.
| Point | RTI | Zero Depreciation |
|---|---|---|
| Main use | Total loss or theft claims | Partial damage repair claims |
| What it addresses | Gap between IDV and invoice value | Depreciation deducted on parts during repairs |
| Does it help if the car is repairable? | No | Yes, subject to policy terms |
| Can you hold it with the other add-on? | Yes | Yes |
| Can you have either one without the other? | Yes | Yes |
You can hold both RTI and zero depreciation, either one of them, or neither. They are not substitutes because they solve different claim problems.
Who is eligible for getting RTI and how much does it cost?
You are eligible for a Return to Invoice (RTI) add-on if you own a new car or a vehicle that is less than 3 to 5 years old. The add-on generally increases your premium by 10% to 15%. It can be bought along with a new policy or during an eligible renewal.
| Base Own-Damage Premium | RTI Loading | Extra Premium for RTI | Premium After Adding RTI |
|---|---|---|---|
| Rs 20,000 | 10% | Rs 2,000 | Rs 22,000 |
| Rs 20,000 | 15% | Rs 3,000 | Rs 23,000 |
When should you consider RTI add on for car insurance?
- Best Times to Choose RTI:
- Brand New Car: Buy it immediately when purchasing a new vehicle. Cars lose 5% of their value the moment they leave the showroom, and up to 20% in the first year.
- High-Theft Area: Choose it if you live or park in a city or neighborhood with high vehicle theft rates.
- Highway Commutes: Opt for it if you frequently drive long distances or on dangerous highways where the risk of a major, vehicle-totaling accident is high.
- Road Tax: Get it if you live in a state with high road tax and registration fees. Standard IDV insurance does not refund those taxes, but RTI does.
- Car bought on a loan: If a new car is damaged beyond repair without RTI add-on, the standard claim payout might be lower than your remaining bank loan. Thus leaving you paying for a car you can no longer drive.
- Who Should Skip RTI Add On?
- Old Cars: Skip if your car is older than 3 to 5 years, as insurers will no longer offer it.
- Budget: Skip if you are on a tight budget as RTI adds an additional 10-15% to the premium cost.
| Car Owner Situation | Will Having RTI Help? |
|---|---|
| New car owner | Your car's insured value may drop below its original purchase price as insurance subtracts for age and excludes extra costs like registration and road tax. |
| High-value car model | A small percentage drop in value can create a large rupee gap. |
| Financed car | If your car is purchased on a loan and is completely destroyed, the insurance payout might not cover what you still owe the bank. |
| High-theft area | RTI is a relevant add-on if the car is stolen and the theft claim is accepted. |
| Old car close to or past eligibility window | Due to car age, it may not be eligible for RTI add-on. |
Key takeaways
- IDV is the maximum insured value, that will be paid by your policy in case of a total loss or theft, after depreciation.
- RTI is an optional add-on that covers the gap between your car's depreciated value and invoice value.
- IDV excludes registration, road tax and insurance cost.
- RTI add-on pay for claims only when the car is stolen or declared a total loss, not when you make ordinary repair claims.
- RTI pays only when the car is stolen or declared a total loss, not for ordinary repair claims.
- A constructive total loss generally applies when repair cost is about 75% of the car's IDV.
- RTI is generally available for newer cars, commonly up to 3 years old, and usually adds about 10 to 15% to the premium.
- RTI and zero depreciation are different add-ons and can be bought together, separately, or not at all.
Frequently asked questions
RTI is not better than IDV because it does a different job. IDV is the base insured value of the car, while RTI is an add-on that can increase the payout to invoice value in theft or total-loss claims.
No. RTI does not increase the IDV shown in your policy. It pays the difference between the IDV-based settlement and the eligible invoice value when a covered total loss or theft claim occurs.
No. RTI is not meant for repair claims. It applies only when the car is stolen or is treated as a total loss under the policy.
No. IDV excludes registration charges, road tax and insurance cost. That exclusion is one reason the IDV can be lower than the car's on-road price.
Yes, based on the supplied brief, RTI invoice value includes ex-showroom price, registration and road tax. The exact wording in your policy decides the final payable components.
RTI is generally offered for newer cars, commonly up to 3 years old. After that, many policies may not offer it at renewal.
Sources and references
- 1.India Motor Tariff, General Regulation 8: Insured's Declared ValueReference basis for IDV definition and standard vehicle-age depreciation schedule.
- 2.Primary research brief: Return to Invoice (RTI) vs IDVEditorial research brief supplied for this article, including RTI components, eligibility window, premium loading and worked example.
About the authors
Nikhila PS
Written by · Senior Content EditorNikhila is a content creator with 6+ years in EdTech and motor insurance, turning complex policies into clear, engaging content. She enjoys exploring digital trends, social media, and art while planning her next short escape.
Rekhit Singh Kaushal
Reviewed by · Senior Director - Motor UnderwritingRekhit Singh Kaushal is Senior Director at ACKO, a leading digital motor insurance provider in India. With deep expertise in insurance strategy and innovation, he brings trusted insights on car and bike insurance to help drivers stay protected.
