[superbad]

I have a couple of queries about car insurance claims. If one has selected the "Return to invoice" or "Invoice cover" add on in his/her car insurance policy, in case of a total loss/theft claim, will the person be entitled to the full invoice amount of the vehicle minus deductions? In this case, does the IDV have any sanctity?
Secondly, every insurance provider has IDV options as - lowest, best & custom. What if the buyer sets the IDV to the invoice value of the car? Will he/she be entitled to the full amount minus deductions? Or will he received a depreciated amount?
Any answers/thoughts/opinions would be much appreciated.

[vik99]

Originally Posted by superbad

I have a couple of queries about car insurance claims. If one has selected the "Return to invoice" or "Invoice cover" add on in his/her car insurance policy, in case of a total loss/theft claim, will the person be entitled to the full invoice amount of the vehicle minus deductions? In this case, does the IDV have any sanctity?

Return to Invoice(RTI)/ Invoice cover are usually not available after the first three years of buying the car. In case RTI add-on has been purchased the person will be entitled to the on-road price of the vehicle.

Originally Posted by superbad

Secondly, every insurance provider has IDV options as - lowest, best & custom. What if the buyer sets the IDV to the invoice value of the car? Will he/she be entitled to the full amount minus deductions? Or will he received a depreciated amount?

Higher IDVs only serve to raise the premium. Payout in case of total loss will be as per depreciated value of the vehicle. It is best not to inflate IDV unnecessarily. Use the IDV calculator from the General Insurance Council to get an idea of the ideal IDV for your vehicle.

[ruzbehxyz]

Originally Posted by vik99

Higher IDVs only serve to raise the premium. Payout in case of total loss will be as per depreciated value of the vehicle. It is best not to inflate IDV unnecessarily. Use the IDV calculator from the General Insurance Council to get an idea of the ideal IDV for your vehicle.

I totally agree with you. However while buying insurance online there is an option where you can increase your vehicle's IDV. Higher the IDV, higher the premium.
So don't you think this is a scam by insurance companies to extract more premium from customers by giving an option to increase the IDV?

[blackwasp]

Originally Posted by vik99

Higher IDVs only serve to raise the premium. Payout in case of total loss will be as per depreciated value of the vehicle. It is best not to inflate IDV unnecessarily. Use the IDV calculator from the General Insurance Council to get an idea of the ideal IDV for your vehicle.

Sorry but this is wrong information. In the page that you have linked it states:

IDV of vehicles beyond 5 years of age and of obsolete models of the vehicles (i.e. models which the manufacturers have discontinued to manufacture) is to be determined on the basis of an understanding between the insurer and the insured.

For the purpose of TL/CTL claim settlement, the IDV will not change during the currency of the policy period in question. It is clearly understood that the liability of the insurer shall in no case exceed the IDV as specified in the policy schedule less the value of the wreck, in ‘as is where is’ condition.

The IDV of vehicles aged over 5 years is calculated by mutual agreement between insurer and the insured, instead of depreciation.”

For vehicles less than 5 years of age: Since a standard maximum selling price of manufacturer is not available to the Insured and the Insurance companies through a centralized system, so various field functionaries of different companies are using their own way to arrive at ‘IDV’; though some of the companies have a centralized control whereas it is not available with many other companies. Thus, across general insurance companies, a variable ‘IDV’ is fixed for the same vehicle model (and other specifications like location), which leads to confusion in the minds of insuring public.

Further,

The Insured‟s Declared Value (IDV) of the vehicle will be deemed to be the „SUM INSURED‟ for the purpose of this policy which is fixed at the commencement of each policy period for the insured vehicle.

The IDV of the vehicle (and side car/accessories, if any, fitted to the vehicle) is to be fixed on the basis of the manufacturer‟s listed selling price of the brand and model as the insured vehicle at the commencement of insurance/renewal and adjusted for depreciation (as per schedule below).

From this I have deduced that it is better to get RTI for the first 5 years and then resort to taking as high IDV as possible for your vehicle.

Edit

Originally Posted by Sameer016

Regarding Return to Invoice: It can be taken ONLY on new vehicle for upto 3 years....

I have taken RTI till my 4th or 5th year. Only in the 6th year did I not remember being able to take it.

[Sameer016]

Regarding Return to Invoice: It can be taken ONLY on new vehicle for upto 3 years, and in case of total loss, Invoice value less Policy excess less salvage (wreck) amount is paid to insured.

Regarding IDV, it is prudent on Insured's part to push for higher value as, in case of Total Loss you will be paid IDV value less policy excess less wreck value. Sometimes it also affects resale value.

[Altocumulus]

Originally Posted by vik99

Higher IDVs only serve to raise the premium. Payout in case of total loss will be as per depreciated value of the vehicle. It is best not to inflate IDV unnecessarily. Use the IDV calculator from the General Insurance Council to get an idea of the ideal IDV for your vehicle.

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.

Insurance will say that they will give depreciated value, and people who donot know agree to it. Once you agree they will make you sign it. Once signed nothing could be done. Also sometimes they decide a scrap value (which is way way above the market scrap value) and say you find a scrap dealer and sell the car as scrap. Never agree to that, tell them to get their scrap guy, you just need the total IDV amount in your account. How they do that is their problem.

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

[superbad]

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.

Am I correct in assuming that the insurance provider is liable to find a scrap dealer, sell it & ensure that the scrap amount is credited to the policy holder?

[Altocumulus]

Originally Posted by superbad

Am I correct in assuming that the insurance provider is liable to find a scrap dealer, sell it & ensure that the scrap amount is credited to the policy holder?

They are however there is a provision where the policy holder can do it if they want. That is what they try to push. Ideally if u sell the parts by piece seperately you will get a lot more. But ofcourse that is a huge hassle. So it's better not to agree to it and tell them to do it.

A point to note, the scrap dealer will withhold some money till you get the registration cancelled.

[androdev]

This is how it is mentioned in my policy:

In consideration of payment of additional premium, it is hereby agreed and declared that in the event of the Insured Vehicle meeting with a Total Loss(including theft)/Constructive Total Loss We, at Our discretion, may use one of the following two options to settle a claim under Vehicle Replacement Advantage:

a) New Vehicle: We will replace the Insured Vehicle with a new equivalent or near equivalent vehicle of similar make, model, features, specifications and color subject to the availability in the open market, inclusive of the following (1)Private Car Package Policy covering the new vehicle (2)The cost of registration, including road tax and Octroi payable, for the new vehicle applicable to the location where the Insured Vehicle is registered Any disbursement under this option will be regarded as full and final settlement of Our liability under Motor Insurance Policy. Upon settlement of the claim under this cover, Motor Insurance Policy shall expire.

b) Cash Settlement: In the event of new equivalent or near equivalent vehicle not being available in the market due to non-production, short supply or due to Our inability to procure such vehicle due to any reason what-so-ever, You will be paid a cash benefit equal to 5% of IDV in addition to the actual difference between the original ex- showroom price of the damaged Insured Vehicle and the IDV.
Upon settlement of the claim under this cover, Motor Insurance Policy shall expire.

Option#A is very good and simple to understand.

Option#B has lot of ambiguity. Let's say you bought an Octavia last year and Skoda launched a new model this year. Would you be offered the new model as a replacement? I doubt it. I tried to find more details about option #B but could not get a definitive reply. If you just get ex-showroom price, you will lose out a lot (road tax, inflation, etc). There is no way you can buy the new Octavia with the ex-showroom price of previous generation Octavia.

Some companies offer this for upto 5 years I think. Even zero depreciation policy is also offered for 8+ years I think. It all depends on the insurance company. Personally, I don't find this as useful as zero depreciation cover.

[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

[Bsimhan]

Originally Posted by blackwasp

From this I have deduced that it is better to get RTI for the first 5 years and then resort to taking as high IDV as possible for your vehicle.

This is exactly right. The IDV is an agreed value between the insurer and the insured. This is the reason that I opted to get a policy from ACKO for my Innova which is 7 years old. The other insurers including the insurer from whom I had the policy had a woefully low amount. Keeping the IDV in mind, the benefit from a total loss or theft claim would be most beneficial albeit the higher premium. Rgds, Bsimhan.

[src]

Few points to add from my side.

RTI or Return To Invoice works for first 3 years even if you change insurance companies.
But it works for 5 years if you stay with the same insurance provider.

During the time when you have RTI in case of Total Loss you get the OTR value irrespective of IDV.
But the IDV cannot be increased in the next year so after 5 years if you have reduced IDV and for Total Loss you will regret not having higher IDV.

Hence it is advisable to always have higher IDV as normally there is 5% to 10% reduction every year.

Obviously if you don't want to keep your car for 5 years then reduce IDV and have RTI.

While selling your car IDV does play a significant role as I have seen first hand while selling my car in February this year.

[itsbaman]

From my personal experience, I suggest always go with higher IDV. This will increase your premium slightly, but it will make a big difference in case of a major accident. I chose an IDV of INR 6.91 Lakh for the 2018 Ford EcoSport, which is currently in force. The calculated IDV was around 6.2 lakhs. The vehicle crashed in January 2021, with most of the exterior panels damaged, but no damage to the chassis or engine. So I chose to get the vehicle repaired rather than a total loss. Now the repair was estimated at 5.02 lakhs, which was 72.5% of the IDV. 2.5% more, and I might have had to settle for TL. Hence, the higher IDV saved me from settling for TL. Now my vehicle is completely repaired and as good as new. The final repair cost was 4.16 lakhs. So never choose a low IDV to save a few bucks.

[meto]

I am still pondering for the first 3 years of ownership, will be IDV value matters (assuming no self-scrappage policy ) if the insured party opt for the return to invoice add on; or will the return to invoice will have a depreciation percentage same as the IDV-new purchase ration?

My Insurer Tata AIG did not asked for the invoice value while purchasing the new car. The RTO charges widely varying across the country, how is the final invoice value calculated for the “return to invoice” in case of theft/total loss?

[Aravind_M92]

Consider me a noob here. Honda assure policy (SMC brokers) agent said that I can get the RTI option for my 5 year old car. I usually renewed my insurance from the agent at the showroom. Last year due to the pandemic, I renewed it from ICICI Lombard page directly. Later when I went for service, the agent spoke to me and said I can get the aforementioned SMC brokers insurance from ICICI for my car with Return to Invoice for the next insurance tenure. When asked if I could get RTI for my 5 year old car, he said it is plausible till 10 years of ownership (as long as extended warranty is applied for). I'm not sure if I'm being fooled here or of the agent is not informed enough.

Just a enquiry here.

Should I go with SMC brokers (Honda Assure) for next tenure or stick to ICICI Lombard alone?

My on road price was 14.6 lakhs for CVT VX. Vehicle is in a fairly good condition. Had a rear impact 3 years back and claimed insurance for that. Which is the best choice of insurance and and Should I go with Honda Assure from SMC brokers or stick to third party insurance?