[tiagoatrix]

I had two options while renewing my 4 years old Tiago's Insurance from a public limited company,

A- IDV - 2.5 L - Premium - 6000Rs
B - IDV - 3.5L - Premium - 9000Rs

6 months after insurance renewal my beloved Tiago met with an unfortunate accident, Gearbox and under body parts had an impact, after much deliberation surveyor decided to go with total loss as repair cost was not profitable for the insurance company.

After a number of office visits and few weeks of time, I received NEFT of 3.5L to my account. My Tiago went as a scarp for 80K, rest was from insurance companies pocket. An extra two thousand helped me save 1 L.

Our country records most number of road accidents in the world, resulting in life and material loss, number of squids in roads has increased multiple folds in the last few years, there's little to no road discipline. A term insurance and solid car insurance is must in IMHO.

Zero dep, RTI, Consumable covers if offered should be taken without second thought. Spending few thousands extra on premium will help you incase of an mishal, odds are high in india.

So,Incase of total loss /theft, RTI will fetch the on road price of your vehicle or a new vehicle of similar specification.Rto value will always be higher than IDV

IDV is the value you will be paid by the insurer in case of theft /total loss. IDV will keep reduced every year because of depreciation, whereas RTI will be constant as your invoice amount.

[divyadeeptsi]

Originally Posted by kapilsharma80

Hello all, assuming that a car is sold within 1st or 2nd year of ownership, then in this case what will be the RTI for 2nd owner?
1- The original invoice amount
Or
2- The amount paid to 1st owner

RTI addon is only applicable to first owner. If the car is sold and 2nd owner transfers it in their name then RTI addon won’t be applicable and in case of theft or total loss IDV - Deductible will be paid as claim amount.

The reason behind this the principle of indemnity. As the second owner didn’t pay the on road price of new car, he’d be in profit if Invoice price of new car is paid and purpose of insurance is to only indemnify and not to put the policyholder in profit.

Hence RTI is only valid for 1st owners.

[armumbai]

Originally Posted by Bsimhan

This is exactly right. The IDV is an agreed value between the insurer and the insured Rgds, Bsimhan.

Over 33 years and 5 different cars, I’ve never been offered the opportunity to negotiate the IDV at any of the 33 renewals/buyouts. It’s a mark of my ignorance that I didn’t even know that this is a thing. I would be grateful if anyone could elaborate how one goes about negotiating the IDV to have it lower or higher as per one’s choice and personal need. The IDVs have always been thrust at me and I have paid the premiums after checking the Covers offered. I would not be surprised if I form about 90% of buyers in India who are like me

Looking forward to your experienced advise

[Quoter]

Originally Posted by armumbai

I would be grateful if anyone could elaborate how one goes about negotiating the IDV to have it lower or higher as per one’s choice and personal need.

Not all insurance companies offer the flexibility of changing IDV, especially in the first 5 years. If you buy / renew insurance which your OEM has pre negotiated for you, the IDV is generally fixed based on vehicle model and age. For increasing or decreasing IDV, the best option is to go through one of the online insurance brokers such as policybazaar, coverfox etc. The IDV is clearly mentioned for each insurance company and you can change it as per your requirement wherever possible.
If you buy insurance through an agent, in most cases he/she should also be able to help you with increasing or decreasing the IDV as required.

[pcpranav]

allow me to put some data, on my personal experience :

a) RTI - available till 5 yrs old vehicle, depends on insurance company too : I have this for 5th yr on my car.

b) RTI - can be availed for a second owner : I have this too, including a recent porting between insurance companies

c) I don't unnecessarily lower the IDV value for any of vehicles.
Additionally, for my super-bike and car, I also include the Zero-Depr, RTI, max IDV (talk to agent), Engine & Gear Box Protection, NCB Protector.
> Especially on the Engine & GB - I read many of the policy statements, and found this is surely covered differently than the regular IDV scope.
> while porting between policies, I have also transferred the NCB Discount, and if available taken the NCB Protector - which basically doesn't reset my NCB Discount percentage in event of a claim.
> Recently I observed separate add-on for Windshield glass coverage in one of the company - so check your policy offering carefully

Look at this article : https://www.hdfcergo.com/blogs/car-i...cover-in-brief

Quoted : RTI is only applicable if your car is damaged extremely and becomes unusable. For small damages, RTI is not applicable. When the cost of repair of the vehicle is over 75% of the IDV, it is considered as total loss. If you are worried about partial loss then zero depreciation cover can take care of such losses. RTI also comes into force in case of theft of the vehicle. In short, Return to Invoice is not an option for you to compensate for small dents and repairs.

Which means RTI will help to bridge the gap between IDV and Invoice Value, at-least its beneficial in the initial years of vehicle age.

Check the underwriting of different companies, more-or-less the RTI trigger would be for similar calculation.

regards,
Pranav

[Voodooblaster]

Hope the following essay will clarify the many queries raised in this thread:

First and foremost: Like any other business Ins Cos exist to make profit. So go through the fine print and try to get the best possible deal before taking the policy.

IDV Determination

IDV or Insured Declared Value is the value given to our vehicle in a policy. Insured and policyholder are same. For the first 5 years IDV is calculated as follows: Age of vehicle is calculated from date of Registration

New Vehicle-95% of Ex Showroom price as on date of taking the policy
Not Exceeding 2 years-80% of Ex Showroom price as on date of taking the policy
Not Exceeding 3 years-70% of Ex Showroom price as on date of taking the policy
Not Exceeding 4 years-60% of Ex Showroom price as on date of taking the policy
Not Exceeding 5 years-50% of Ex Showroom price as on date of taking the policy

After 5 years, IDV is settled based on mutual understanding between Ins Co and the customer. Normally vehicles that sell in good numbers and have a good resale value get higher IDV even after 5 years (Toyota, Maruti etc). Sales duds and high maintenance brands get a lower IDV (VW, Skoda, Tata etc). Normally insurers refuse to cover Obsolete Models or charge higher premium (Almost all models of Chevrolet)

IDV is the maximum value the Ins Co will pay a customer. As everyone would have guessed by now, with raise in IDV , the premium will also raise.

If the total payable amount exceeds 75% of the IDV, insurance co.s will settle the claim on total loss basis.

Once RC is cancelled they will pay the IDV minus scrap value. Most Ins Co.s help to find scrap merchant. The scrap merchant will pay the remaining value. If there is any outstanding loan on the vehicle, the payment will be made only to the bank.

Now lets come to Zero Depreciation Cover

When settling a claim, Ins Co.s normally pay only a depreciated value of the replaced parts.
Plastic, rubber and Fibre parts attract a flat 50% depreciation.
Depreciation rate of Metal parts increase with age of vehicle. A vehicle older than 5 years will attract 40% depcn on metal parts. For veicles more than 10 years, depcn on metal parts will be around 50%

The Zero Depreciation is an add on cover. Taking this cover will make the ins co to pay the full amount for spare parts without any depreciation. Normally Zero Dep is available upto 5 years of age. Nowadays a few pvt companies like Universal Sompo and IFFCO Tokio are offering the Nil Dep cover for vehicles upto 10 years of age. Needless to say the premium rates for Nil Dep Cover rises with increase in age of vehicle

While it makes normally sense to have a higher IDV, occasionally it may back fire if your vehicle doesn't have a Zero Depreciation policy.

Scenario 1: High IDV

Consider a 6 year old vehicle that has very costly spare parts and is high maintainence. The resale value is 8 lacs, Customer negotiates and gets 10 lacs IDV. Car meets with an accident and needs 12 lacs to be repaired



Spending 5 lacs on a vehicle with a resale value of 8 lacs doesnt make much financial sense. An ageing high maintenance with a major accident will keep denting the customers pocket and also have a lesser resale value in future (On account of the accident)

If the customer had accepted IDV closer to the market value; say 9 lacs, his vehicle would have been considered a total loss and customer would have walked home with 9 lacs as downpayment for his next vehicle

Scenario 2: Low IDV

Consider a 8 year old vehicle that has good resale value and low maintainence cost. The resale value is 6 lacs, Customer negotiates and gets 5 lacs IDV. Car meets with an accident and needs 6.50 lacs to be repaired



If the customer had accepted IDV closer to the market value; say 6 lacs, and customer desires to use his car could have repaired the vehicle by spending about Rs 1.50 lacs

Moral of the story: Vehicle should be in the Goldilocks Zone-Neither too high nor too low



RTI or Return to Invoice

RTI cover is activated only when a vehicle is declared as a total loss.

If the total payable amount exceeds 75% of the IDV, insurance co.s will settle the claim on total loss basis

Normally RTI pays the ex showroom price of the same variant of the vehicle as on date of accident. Some ins companies additionally pay the road tax amount, registration charges levied by RTO and the insurance premium paid at the time of purchase of policy.

Scenario 1-Model and Variant exists at the time of accident

Customer purchased Ecosport Trend MT variant with an Ex Showroom price of Rs 8.20 lacs (approx) on Dec 2019.

Accident happens on June 2021. The IDV of vehicle in policy is 7.20 lacs. Repair cost after all deductions is 6 lacs (83% of IDV)

Ins Co will have to pay Rs 8.84 lacs (Ex Showroom price as on June 2021)

Scenario 2-Model and Variant do not exist at the time of accident

Customer purchased Honda BR-V VX MT variant with an Ex Showroom price of Rs 11.40 lacs (approx) on OCT 2018.

Accident happens on June 2021. The IDV of vehicle in policy is 8.30 lacs. Repair cost after all deductions is 6.65 lacs (80% of IDV)

Problem is that, BR-V was discontinued by Honda from Apr 2020 onwards.
In this case Ins Co will pay the Ex Showroom price when the model was last available on the market. Ie Rs 11.84 lacs (Ex Showroom price as on Mar 2020)

However this is an unlikely scenario as Ins Co.s normally dont offer RTI cover for models that are phased out or rumoured to be phased out

Scenario 3-Model has a generational change and there is a huge difference in value

Huge price difference normally doesn't happen in the mass market cars. (Ie a new vehicle having Ex Showroom price less than 20 lacs). If at all such a scenario, occurs Ins Co may try to purchase a car of the older generation lying unsold at any dealer point and give to customer.

Besides many companies dont offer RTI for cars over 20 lacs, or charge a very high premium for the same



Hope this covers most of the doubts raised in this thread. Feel free to ask for any clarifications

[ZMG]

Hi
I have a query:

I have Swift VXI 2012 and it is time to renew the insurance.
Should I choose an insurance higher than what has been written here - https://idv.gicouncil.in/

In case I have an accident, will I get the higher IDV that I have chosen, or whatever the insurance agent thinks is fit ?

I have 2004 Honda City as well, and the IDV has been around 2 lakhs for the last 5 -6 years. Am I being fleeced by the insurance agent by setting a higher IDV, while in reality that amount will never be given ?

[ghodlur]

Originally Posted by ZMG

Should I choose an insurance higher than what has been written here - https://idv.gicouncil.in/

In case I have an accident, will I get the higher IDV that I have chosen, or whatever the insurance agent thinks is fit ?

I have 2004 Honda City as well, and the IDV has been around 2 lakhs for the last 5 -6 years. Am I being fleeced by the insurance agent by setting a higher IDV, while in reality that amount will never be given ?

If the IDV amount as per the calculation in the link is approximate to the thumb rule of 10% less than last year IDV, you could use either of them. Generally the IDV fix is left to the car owner and owner can be tempted to go for an higher IDV, however during the claims the Insurance co will exercise the IDV as applicable to them basis the years of ownership. Hence over insurance or under insurance isnt a good option.

Since you Honda city is more than 5 yrs old, the IDV is an agreed amount between you and Insurer. Insurer will be liable to consider the IDV (only applicable during Total loss or Partial loss).

[gotoguru]

Court orders mandatory Bumper to Bumper Insurance Cover for five years

https://www.outlookindia.com/newsscr...nce-hc/2148071

Therefore, this court directs that whenever a new vehicle is sold after September 1, it is mandatory for coverage of bumper to bumper insurance every year, in addition to covering the driver, passengers and owner of the vehicle, for a period of five years.

[rav1up]

Hey All,

I've a couple of questions related to IDV and RTI.

1. For RTI: What is the document used to get the total value in the event of total loss or theft? Is it literally the invoice document from dealership or is it the actual On The Road price (sum of all expenses)?

For instance, I'm buying a car in Bangalore with only temporary registration. I'm getting insurance on my own and not from the dealer. I'm getting the car registered in a different city (same state) on my own and not by the dealer. So approx 20% of OTR will NOT be in the invoice given to me by the dealer as I have spent it through an agent to register the car.

If I keep all documents and records, hypothetically, what is the value I'm supposed to be paid if I choose RTI cover in my policy?

2. For IDV: My understanding is that in the event of total loss or theft, the value of IDV shown in the policy is what the insurance company MUST pay me.

There is no further depreciation to be considered at the time of such payment. All depreciation is already considered when the insurance company chose to accept a value at the time of obtaining the policy.

So whether I chose a higher IDV than market value or higher IDV than previous year's value (during renewal), the source of truth is what the policy states. Is this accurate understanding?

Thanks in advance!

[Coyote]

Originally Posted by Altocumulus

That's not the correct information. IDV is the agreed value of the car with the insurance company. They are liable to pay the same minus the scrap value which will be paid separately by the scrap dealer.

I follow a simple process. If am getting RTI, I keep the IDV low. If no RTI, the highest IDV possible.

Hi Altocumulus,

My car's insurance's first renewal is coming up next month and as it is just a year old, I am being offered RTI.

You have suggested keeping IDV low in case RTI is available and chosen. My question is, would the IDV I am being offered at my next or any subsequent renewal not depend on my previous IDV?

I understand insurance companies allow for custom IDV's, but is that also not limited by a previously available IDV? Or is it, generally, truly custom?

[Altocumulus]

Originally Posted by Coyote

Hi Altocumulus,

My car's insurance's first renewal is coming up next month and as it is just a year old, I am being offered RTI.

You have suggested keeping IDV low in case RTI is available and chosen. My question is, would the IDV I am being offered at my next or any subsequent renewal not depend on my previous IDV?

I understand insurance companies allow for custom IDV's, but is that also not limited by a previously available IDV? Or is it, generally, truly custom?

If you stay with the same company your future IDV will be determined based your previous one I guess. If you switch companies you should be able to increase the IDV especially after 3 years when RTI wont be allowed anymore.

Ideally keep it at recommended till the time you have RTI and increase it to max after 3 years.

[Voodooblaster]

Originally Posted by rav1up

1. For RTI: What is the document used to get the total value in the event of total loss or theft? Is it literally the invoice document from dealership or is it the actual On The Road price (sum of all expenses)?

Ex showroom price will be as per manufacturer's listed price at place of purchase/registration (whichever is lower)

The refund of road tax, registration fees and even the first year insurance cost are covered by some companies ( that's why we have to sift through the fine print )

Documents required will be the original receipts for road tax, regn charges etc

However if it's a total loss case, where RC is cancelled and vehicle scrapped, ins co will pay the difference between allowable Road tax refund and actual road tax paid

Originally Posted by rav1up

2. For IDV: My understanding is that in the event of total loss or theft, the value of IDV shown in the policy is what the insurance company MUST pay me.

Your understanding is correct. Insurance company is liable to pay the full IDV if repair cost exceeds 75% of IDV

Except for Nil Depreciation policies, depreciation is considered while arriving at repair cost

[Kiran Joshi]

Hello,
I am trying to renew my 3rd year Own damage policy for XUV 300 through ICICI Lombard through online portal. But page says that RTI (return to invoice) is not applicable for 3rd year policy.
I contacted ICICI helpline person who said that its possible to get RTI, but not online. RTI is available only through ICICI local branch office after car examination by ICICI person physically.
Is it true?
Regards,

[easterncar]

Hello.

I had a doubt. My friend's car caught fire suddenly on the road. Nobody was injured (thank God) as the fire was contained inside the engine bay. But as it's a Volkswagen Vento repairs are unfeasible (quite a bit of damage). The car is 10 years old. There is a music system in the car which is the only aftermarket fitting. Can the insurance company reject the claim on this basis? How much should the repair cost be for them to make it total loss case?

What should the amount of the bill, as percentage of IDV, be to be considered be for a total loss case?

Let's say the IDV is Rs. 3 lakhs and the cost of repairs is Rs. 4 lakhs. Will the insurance company say that as per dep, you pay Rs. 2 lakhs and they pay Rs. 2 lakhs for repair, as what they are paying is still its lower than the IDV?

Or will they say that if the if the cost of repairs is lower than Rs. 2.25, which is lower than 75% of the IDV, they will not take it as total loss case?