Team AckoAug 11, 2021
A personal car offers the comfort of traveling anywhere you want, any time you want. To travel anywhere and anytime in your car without major problems, your vehicle needs to be well-maintained and insured against accidental damages at all times. To secure your vehicle against damages and for wide-ranging benefits, you can insure it with the Comprehensive Insurance plan.
One of the main benefits of Comprehensive Insurance is the option to include add-ons that further increase the coverage for your car. In this article, you’ll learn about Return to Invoice vs. Zero Depreciation add-on cover and how it impacts your claim settlement.
Zero Depreciation car insurance (Nil Depreciation) is also popularly called ‘bumper-to-bumper’ insurance. When you buy the Zero Dep cover with Comprehensive Insurance for an extra premium, ACKO will not deduct the depreciation amount while settling your claims, enabling you to receive a higher claim amount.
Suppose the damages to your car are considerable, and the liability is considered a total loss. In that case, ACKO will pay the Insured Declared Value (IDV), the approximate market value of the car, stated in your policy.
However, with the Return to Invoice add-on, ACKO will pay the amount stated in the car’s original purchase invoice. This way, you can get the maximum claim amount and not based on the IDV.
When you insure your vehicle with Comprehensive Insurance, you have the option to buy both these add-ons. But, what are the differences between the two add-ons? The below table pits the Return to Invoice vs Zero Depreciation add-on cover.
|Factor||Return to Invoice||Zero Depreciation|
|Meaning||The add-on cover is applicable when the damages to your car are beyond repair, or in case your car is stolen.||The add-on cover is applicable to car repairs when it is damaged due to an accident, natural or man-made calamities, fire, or explosion.|
|How does it work?||It helps fill the gap between the IDV and the invoice value of the car during claim settlement.||It bridges the difference between the actual cost of car parts being repaired or replaced and the depreciation value of the car parts.|
|Example||Mr. A’s car was stolen and was declared untraceable. Since he has the RTI add-on, he got the purchase invoice value of the car.||Mr. A’s car was damaged due to an accident and required repairs. Since he had the Zero Dep cover, he got the total claim amount as the depreciation of car parts was not considered.|
If your car is less than 5 years old and you do not want higher out-of-pocket expenses during repairs, it is suggested that you opt for the Zero Depreciation add-on. As the car ages, the value of the car depreciates due to regular wear and tear. Nil Depreciation or bumper-to-bumper insurance is ideal for financial security to mitigate the depreciation of the car parts.
For example, if your car was damaged due to a minor accident, and the repair cost is Rs. 40,000, ACKO will pay Rs. 25,000 towards the repair cost after deducting the depreciation of the parts being repaired or replaced. However, your claim settlement amount will be Rs 35,000 if you have chosen to include the Nil Depreciation or Zero Depreciation add-on along with the Comprehensive Insurance plan after deducting the Compulsory Deductible.
As mentioned above, RTI cover pays the price as mentioned in the original invoice in case of a total loss. Total loss is when the car is damaged beyond repair or is stolen. Here is who and why you should buy the RTI cover.
Owners of a new car
Car owners living in a theft-prone area
Car owners living in areas where natural calamities are common (for example, flooding)
The add-on is available for cars between 1 and 3 years
In case of vehicle theft
To protect against damages caused due to natural calamities
Add-ons are a great addition to your car insurance plan since they cover losses that are not covered under the basic plan. However, you need to choose the right add-ons that benefit you during financial liabilities.
Both the Return to Invoice and Zero Depreciation add-on cover help mitigate potential losses. While the former protects and compensates you if your car was damaged beyond repair or stolen, the latter bridges the gap between the actual cost and the depreciated value of car parts.
A new car that may not require too much maintenance may need the RTI cover. An old vehicle that is less than 5 years old that may require a lot of repairs, may need the Zero Depreciation cover. Hence, choose the car insurance add-on cover that fits your needs.
Here are some common questions about Zero Dep cover and RTI cover in car insurance.
While Comprehensive Car Insurance policy covers damages or losses incurred by the insured vehicle, the compensation will be after deducting the depreciation of car parts. However, the Zero Depreciation cover that is purchased as an add-on along with the Comprehensive Car Insurance policy will ensure that the compensation will be without deducting the depreciation of car parts.Is Zero Depreciation cover applicable for older cars?
The add-on is available for cars less than 5 years old. If your car is over 5 years old, then contact our support team for more details.Are there any deductions while making a claim against the Return to Invoice cover?
The claim settlement amount may not be the exact amount mentioned in the purchase invoice of your car. It depends on the terms and conditions of the insurance policy. For more details, you can email us at [email protected].Does the RTI cover additional accessories?
No, under this add-on, the purchase invoice of your car will be covered, and not the cost of any additional accessories.What is the difference between Insured Declared (IDV) and Return to Invoice (RTI)?
IDV is the approximate market value of the insured vehicle, while the Return to Invoice is an add-on that compensates the vehicle’s original invoice value when you make a claim.Is Zero Depreciation better than Return to Invoice add-on?
No, both add-ons are equally beneficial if you buy for the relevant requirement.Does RTI cover the on-road price of the insured car?
Yes, the RTI will cover the road tax and registration cost of the car.What are the exclusions under the RTI cover?
The RTI cover does not apply to a Third Party Car Insurance policy (TP) since the Own Damage (OD insurance) cover is not applicable under the TP policy. Also, after a certain age of the car, RTI cover may not be available for purchase. Another exclusion is minor damages since the cover is only useful in case of theft or total loss.
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