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Buying a car is an expensive financial goal. One that requires most people years of planning, saving, and equated monthly installments (EMIs). This is why when you finally have a car parked in your driveway, you should do everything in your ability to keep it secured and well-functioning.
Out of the many ways to look after your vehicle, getting a comprehensive car insurance policy is a must. Although the law only mandates third-party car insurance, a comprehensive car insurance plan can offer more benefits.
Some of these come with the additional riders that you can club together to enhance your policy. The Return-to-Invoice rider is one such add on.
Here is a detailed guide on how to use the Return-to-Invoice rider in a car insurance policy.
What Is The Return-To-Invoice Rider?
Insurance companies for car plans offer coverage based on the Insured Declared Value (IDV) of the vehicle. When they calculate car insurance, they look at the make, model, accessories, location of the car and driver, etc. and then decide the premium and sum assured. The IDV is not the same as the price at which you buy your car. Rather, it is its current value.
The Return-to-Invoice rider ends the gap in these two values. With this rider, if you make a claim, the insurance company will pay you the invoice price of your car and not the IDV. This will include on-road taxes, the ex-showroom price, and the cost of registration.
When Can The Return-To-Invoice Rider Be Used?
The Return-to-Invoice rider can only be used in the case of complete damage or loss to your vehicle. This means if your car gets stolen or has been damaged so badly that it can no longer be repaired or used, you can claim its entire value from the insurance company. However, you will be asked for a police report to validate your claim of loss or damage to get the settlement.
In addition to the above, the Return-to-Invoice can also only be used if your vehicle is not older than 3 to 5 years. The precise time can differ from insurer to insurer. An important thing to remember is that in the case of small claims, the Return-to-Invoice rider is not applicable.
What Are The Benefits Of The Return-To-Invoice Rider?
You can add the Return-to-Invoice option to your car insurance policy for a number of reasons. Here are some advantages of this rider.
Better protection: In the case of complete loss or damage, a Return-to-Invoice rider can be of great help by ensuring that you get back the worth of your car. The loss of a four-wheeler can be hard to bear, and this add-on can help you cover for it.
Covers hidden costs: Not only the price of the car, but the rider also accounts for road tax and registration charges, so that you receive comprehensive protection.
Enables future purchases: The money from the Return-to-Invoice insurance claim can be used to buy another car if your old car is stolen or damaged beyond repair. You do not have to spend any more from your pocket or apply for a new loan.
What Are The Things To Consider While Buying A Return-To-Invoice Rider?
Along with the many advantages, you should be careful about certain aspects of a Return-to-Invoice rider, such as:
Does not cover old cars: A Return-to-Invoice will not work for old vehicles. If your vehicle is older than 3 to 5 years, the rider will not be added to your policy. In case of existing riders, the insurance company will automatically delete the add-on from your plan.
Increases the cost of insurance: A Return-to-Invoice provides additional security to your car but also comes at an extra cost. At an average, the rider can increase the cost of a car insurance policy by 10%.
Covers only own damage: The Return-to-Invoice rider can only be added to a comprehensive car insurance plan. It cannot be bought with a third-party insurance policy. The add-on only includes own-damage and not third-party damage.
Accounts for complete loss: The Return-to-Invoice add-on can be used in cases of fire, theft, natural calamities, and accidents, as long as the car has been fully destroyed or stolen. The Return-to-Invoice is not applicable for minor repairs or petty thefts.
What Is The Difference Between A Return-To-Invoice And A Zero Depreciation Rider?
The zero depreciation cover is useful in the case of small or partial repairs. A Return-to-Invoice, on the other hand, is for permanent loss or damage to the vehicle.
To Sum It Up
A good insurance policy can be your car’s companion and safeguard it for a long time. And the right riders add to this security with their unique offerings.
So, make sure to thoroughly check the plan and pick suitable riders before hitting on the ‘Pay’ button while buying an online 4 wheeler insurance policy.
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