Insurance Encyclopedia

Return to invoice cover

Motor insurance · Updated 17 October 2026

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In short

Return to invoice cover is a motor own damage add-on that, on theft or total loss, pays the gap between the vehicle's insured declared value and its original invoice price.

Also called: RTI cover, invoice cover, invoice protection, return to invoice add-on, gap insurance

What is return to invoice cover?

Return to invoice (RTI) cover is an optional add-on to the own damage section of a motor policy. If the vehicle is stolen and not recovered, or is damaged so badly that it is declared a total loss or constructive total loss, the base policy pays only the insured declared value (IDV), which is the listed price less age-based depreciation. RTI pays the difference between that IDV and the vehicle's original invoice price, so the owner can come close to replacing the vehicle.

It pays nothing on partial damage. Its only trigger is a total loss, constructive total loss or theft that the base policy accepts.

How return to invoice cover works

Because each insurer files its own add-on with IRDAI, the detail differs. A typical private car wording works like this:

  • Basic benefit. The difference between the original invoice price (in practice the ex-showroom price, plus listed accessories) and the IDV.
  • Extended plans. Some plans also pay first-time registration charges and road tax, often capped (one wording caps these at 20% of the invoice price), and refund the unused part of the own damage premium. Other plans pay a smaller difference, such as invoice price less a small fixed depreciation.
  • Replacement option. Some insurers may choose to provide a similar vehicle instead of cash.
  • Theft claims wait for the police. Payment for theft usually needs the police final report or a non-traceable report, and typically not before 90 days from the theft.
  • One claim per year. The add-on normally pays only once in a policy period, and the payment is full and final.
  • Age limits. Insurers usually sell RTI only for vehicles in their first few years, and some only on renewals without a break.

Example

A car bought for ₹10,00,000 ex-showroom is stolen when it is 20 months old. Its IDV for the year is ₹8,00,000 (20% depreciation). The base policy pays ₹8,00,000 less any deductible. With a basic RTI plan the insurer adds ₹2,00,000. With an extended plan that also covers registration and road tax, the payout can rise further, up to that plan's cap.

What return to invoice cover means for distribution

  • It belongs in the new vehicle sale. The gap between IDV and replacement cost is largest in the early years, and that is when RTI is cheapest and easiest to get. Dealers, MISPs and banks financing the vehicle are best placed to offer it.
  • Relevant to financed vehicles. On a total loss of a hypothecated vehicle, the claim is settled with the lender's involvement and the loan is cleared first. If the loan outstanding is close to the invoice price, the IDV may not clear the loan. RTI narrows that gap. Credit teams and loan sales staff should understand this, without making it a condition of the loan.
  • Theft-heavy areas. In cities and for models with high theft rates, RTI is a strong candidate alongside zero depreciation. Distribution teams can prioritise it by geography and model.
  • Do not overpromise "full refund". Customers often hear RTI as "you get your money back". The plan may not include road tax, registration or accessories bought later, and the theft payment takes months. Writing down what the chosen plan pays avoids complaints.
  • Keep continuity at renewal. Because many insurers will not add RTI after a break or at a late renewal, switching a customer to a cheaper insurer can lose the cover. Advisers should check this before moving a renewal.

Sources

Motor insuranceIDV (insured declared value)IDV (insured declared value) is the sum insured under a motor own damage policy: the vehicle's listed selling price less age-based depreciation, and the most an insurer pays on theft or total loss.Motor insuranceOwn damage insuranceOwn damage insurance is the part of a motor policy that pays for loss of or damage to the insured's own vehicle from accident, theft, fire or calamity, up to its insured declared value.Motor insuranceZero depreciation coverZero depreciation cover is a motor own damage add-on that removes the depreciation deducted on replaced parts in a partial loss claim, so the insurer pays the full cost of parts.Motor insuranceComprehensive motor insuranceComprehensive motor insurance is a package policy that combines compulsory third party liability cover with own damage cover for the insured vehicle, and can carry add-ons.Claims and policyholder serviceSalvageSalvage is the value left in damaged insured property after a loss, such as a wrecked car or fire-damaged stock, which is deducted from the claim or taken over by the insurer after payment.Distribution and intermediariesMotor insurance service provider (MISP)A motor insurance service provider (MISP) is a vehicle dealer appointed by an insurer or intermediary to sell and service motor insurance for the vehicles it sells, under IRDAI's 2017 guidelines.

Cite this entry

Glotus456 Research. "Return to invoice cover." Insurance Encyclopedia (India), updated 17 October 2026. https://www.glotus456.com/research/encyclopedia/return-to-invoice

About this entry. Written by the Glotus456 Research team, a BFSI distribution consultancy in Gurugram working with insurers, NBFCs and FinTechs across India. It explains how things work and is general information, not legal, tax or financial advice. Rules change: check the current IRDAI regulation or circular, or the official scheme or tax source, before acting.