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Do All Car Insurers Provide a Replacement for Damaged or Stolen Car?

Car is a valuable commodity and its loss in any form can be heartbreaking. While partial or complete damage to the car during accidents is fairly common, one can’t deny the possibility of car theft too. But does your car insurance add-on cover the replacement for damaged or stolen car? Let’s find out.

A motor insurance policy is designed to provide risk coverage against any loss or damage to your vehicle. This is why the Motor Vehicle Act mandates all car-owners to buy auto insurance at the time of purchasing the vehicle. However, the base motor insurance plan unfortunately falls short of covering all losses incurred to the owner. For instance, a large number of car insurance companies in India would only cover damage caused to the vehicle in case of a road accident.

In other cases, such as theft of the vehicle, coverage for the automobile may not be provided as part of all insurance policies. In this event, the owner ends up suffering a huge loss, especially if the car was just brand-new and stolen right after purchase! Things get worse when the stolen vehicle is rarely found by the police authorities, resulting in a huge financial loss to the owner.

What happens in this case? Since you had purchased motor insurance at the time of buying the vehicle, does your insurance company offer a replacement for the stolen car? Well, with a base motor insurance plan, this may not be possible; however, a comprehensive car insurance policy can help.

Does Comprehensive Car Insurance Plan Cover Car Theft and Damage?

Yes, if you choose to buy a comprehensive car insurance policy from your insurer, you’d be entitled to receive some additional benefits not generally covered under the base plan. For instance, coverage against theft of a car in addition to damage caused during an accident is covered under a comprehensive policy. This benefit can be availed by buying an add-on cover with the comprehensive plan.

There’s another advantage of buying this plan over third-party insurance. In case the car gets stolen, some insurance policies would provide the benefit of daily transportation expenses to help the insured during this financially difficult time.

What to Do If Your Car Gets Stolen?

If you’re insured under the comprehensive car insurance plan, you’re eligible to file a theft claim for your stolen vehicle with your insurance company. However, your insurer would need you to report the theft within a specific time period in order to file a claim. Besides, you’d also need to provide a copy of the FIR filed with the police with regard to the car theft.

What Does the Insurer Do in Case of Car Theft?

Keeping into account the growing number of car thefts in the country, most insurance companies provide the advantage of a Return to Invoice add-on cover that can be purchased in conjunction with your auto insurance policy. The advantage of this cover is that it allows the owner to avail its benefits for 3 years after the purchase of the vehicle.

This cover comes in useful in case your car gets stolen or is damaged beyond repair in case of an accident or calamity. With the help of the Return to Invoice cover, you will be reimbursed the on-road value of the car at the time by your insurer.

Read More: Steps To File A Claim For Car Theft

How Does the Return to Invoice Add-on Cover Work?

This cover that comes with the comprehensive car insurance policy is particularly helpful in case of loss to the car owner due to theft or total irreparable damage to the vehicle. This is because as soon as the car gets off the showroom after purchase, the percentage of depreciation value starts getting charged to the vehicle right from that day.

In case of car theft, a regular motor insurance policy would unfortunately not be able to recover the complete worth of the vehicle. This is where the add-on cover of Return to Invoice comes into play. Up to 3 years after purchasing the vehicle, the owner stands eligible to receive full worth (on-road value) of the car in the event it is stolen. This can help prevent a huge financial loss to the car owner.

How is Return to Invoice Computed by the Insurer?

In case you wish to avail this add-on cover benefit, your insurance company would calculate the Return to Invoice value based on the following:

  • The ex-showroom price of the car
  • The sale processing fee
  • Any road tax, if applicable, on the invoiced price of the car
  • Charges for car registration

Some insurers may also offer car replacement compensation under the Return to Invoice cover. In this case, the value of replacement car in insurance is computed based on:

  • The registration charges of the car at the time of purchase
  • Payable road tax
  • Ex-showroom price of the vehicle

Exclusions Under the Return to Invoice Cover

While this add-on cover benefit is extremely useful in case of car theft or irreparable damage, there are certain exclusions defined under the policy, which are not covered by this benefit:

  1. Any minor dents on the body of the vehicle
  2. Damage caused to third-party property
  3. Theft of car not reported via FIR
  4. Damage to car purchased more than 3 years ago

Whom is the Return to Invoice Cover Ideal For?

This add-on cover is best suited to new automobile owners since it provides coverage for theft or damages only up to 3 years of purchase. Brand-new car owners can feel safe and protected by investing in this type of insurance, since new car thefts are common. This cover can then help prevent huge financial loss to the car owner since a standard auto insurance policy fails to provide coverage under these circumstances.


If you’ve just bought a new car or are contemplating buying one, make sure to buy comprehensive car insurance online and avail the benefit of the add-on Return to Invoice cover. Look for the best car insurance company in India and secure yourself financially and your car from any unforeseen damage or loss due to theft.



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