Betterment — Insurance Claims Definition
Auto
A deduction from a claim payment when new parts improve the vehicle's condition beyond pre-loss state.
Insurers may charge betterment when replacing worn tires, batteries, or suspension with new parts that increase value. It is more common in auto than property but similar concepts exist.
Examples
Four bald tires are replaced new after a crash; carrier pays 75% of tire cost citing 25% betterment for tread life gained.
Common Mistakes
Disputes over arbitrary betterment percentages. Insured expects brand-new parts with no offset for old wear.
