Posted on: 16 April 2015
Auto insurance policies are full of tricks and loopholes that most people don't even realize when they sign up for the policy, and one of these little caveats is a betterment clause. This pesky little segment of your insurance policy has the potential to cost you a pretty penny if you're involved in an accident, but many people don't understand exactly how betterment works, what it entails for your repair costs, or how to avoid paying it.
What is Betterment?
Betterment is an auto insurance company's way of making sure that they don't pay for a repair that drastically increases the value of your car. For example, if you are rear-ended while sitting still, even though you are completely faultless in the accident, your insurance could still bill you if the repair causes your car to get a much-needed fresh coat of paint or a more expensive muffler than it was previously valued at. Therefore, betterment not only applies to having upgraded parts put on your car, but also if the part is new and of higher value than the used or depreciated part that was damaged.
What Does Betterment Mean for My Repair Costs?
If your insurance company invokes the betterment clause after you've gotten your car fixed at an auto shop like Gwizz Auto Group, that means that you will pay the difference between value of the damaged parts just before the time of the accident and the value of the new part. That means that if your muffler was worth $90 used when you got in the accident and that part cost $120 new, then your insurance company could claim that the value of your car increased by $30. That said, your insurance is not in the business of upgrading cars, but rather restoring them to their previous condition. Under these terms, your insurance company could claim betterment and put you on the hook for the $30 difference.
How Can I Avoid Paying for Betterment?
Figuring out exactly how much to charge for betterment is not a cut-and-dried issue, so there is some wiggle room here. A lawyer would likely not be much help unless you could claim that you were being charged an exorbitant amount. However, a call to your insurance agent might be able to save you a bit on the betterment charge, but not make it go away completely, since it is in the policy explicitly in most cases.
Understanding betterment and how it affects your insurance claim is crucial to figuring out exactly where your money is going when your car goes into the repair shop. If you end up paying for an upgraded part, know that the charge isn't entirely fabricated, that it will increase the value of your car, and that you aren't being swindled, since the betterment clause is a part of your insurance policy after all.Share