As a car owner, it’s essential to have comprehensive car insurance that covers all possible risks. Having car insurance ensures that you’re financially protected in case of an accident, theft, or damage to your car. However, when purchasing car insurance, there are several terms that you need to understand, including RTI premium.
RTI stands for Return to Invoice, and it’s an add-on feature that you can purchase along with your comprehensive car insurance policy. The RTI premium is the additional cost you’ll incur to add this feature to your policy. Let’s delve deeper into what RTI premium is and how it works.
What is RTI Premium?
In simple terms, RTI premium is an optional add-on feature that you can include in your car insurance policy. It provides financial protection if your car is stolen or declared a total loss in an accident. With RTI, you’ll receive the total invoice value of your car from the insurance company instead of the depreciated value.
For instance, let’s say you bought a brand-new car for $20,000, and after two years, it gets stolen or is involved in an accident resulting in a total loss. In such a scenario, the insurer would calculate the actual cash value (ACV) of your vehicle based on its current market value, which may be lower than what you paid for it. However, with RTI, you’d receive the full $20,000 instead of the ACV.
How does RTI Premium Work?
RTI premium works by bridging the gap between the invoice value and the actual cash value of your car. When you purchase RTI, you’re essentially buying an extra layer of protection to ensure that you don’t incur any financial loss in case of a total loss or theft of your vehicle.
To understand how RTI works, let’s consider an example:
Suppose you purchased a brand-new car for $30,000 and insured it with a comprehensive policy that includes RTI. After three years, your car gets stolen or declared a total loss due to an accident. The current market value of your car is around $18,000. However, since you have RTI, your insurer would pay you the full invoice value of $30,000 instead of the depreciated ACV.
In this example, the RTI premium paid by the car owner would be an additional cost on top of the comprehensive insurance policy’s premium. The RTI premium typically ranges from 1% to 3% of the vehicle’s invoice value.
Is RTI Premium Worth It?
Whether or not RTI premium is worth it depends on various factors such as the age of your vehicle, its market value, and how much you’re willing to spend on additional protection. RTI premium is recommended for those who want complete financial protection in case of a total loss or theft of their vehicle.
If you have a brand-new car, purchasing RTI makes sense as it ensures that you get back the full invoice value of your car if it’s stolen or written off in an accident. Moreover, RTI can also be beneficial for those who’ve purchased a used car as it provides a higher level of protection compared to a standard comprehensive policy.
However, if your car is old and has already depreciated significantly, RTI may not be worth it. In such cases, the difference between the actual cash value and the invoice value may not be substantial enough to justify the additional premium cost.
Things To Remember About Return To Invoice Cover:
Here are a few points that will summarize all you need to know about RTI before buying:
Return to Invoice is an additional cover. It will increase the cost of your car insurance policy.
It can only be purchased with a new car. Insurance companies usually offer it for cars that are not more than 3 years old.
RTI covers total loss and theft only. Other damages to the car are not covered.
RTI is not suitable for every car owner.
Return to Invoice cover is highly beneficial for claiming the price you paid for buying the car.
Conclusion
RTI premium is an optional add-on feature that provides an extra layer of financial protection in case of a total loss or theft of your vehicle. It ensures that you receive the full invoice value of your car instead of the actual cash value, which may be lower due to depreciation. Whether or not RTI premium is worth it depends on various factors, including the age and value of your vehicle. It’s always recommended to weigh the pros and cons before opting for RTI and make an informed decision.
