What is Betterment?

Betterment is a portion of cost you have to bear when your damaged parts are replaced with brand new, original part.  In this case, you car appears to be in a better condition prior to accident. In fact, it is against the insurance principle of indemnity. Insurance is intended to indemnify your loss, and no profit should be obtainable. But, in the case of repair where old parts (damaged) are replaced with new parts, the car owner actually benefits.

Thus, as a car owner, your insurance company may require you to bear the difference in costs. Application of betterment is at the discretion of the insurance company, but should they apply for betterment, it will be according to the standard scale of betterment adopted by the industry.

For Car below 5 year – 0%
5 years – 15%
6 years – 20%
7 years – 25%
8 years – 30%
9 years – 35%
10 years and above – 40%

For vehicle age below 5 years, Insurance companies may allow you to send your damage car to franchise workshop (Car Authorised Service Centre), where your damaged part will usually be replaced by brand new original parts, but for vehicle age above 5 years, you are required to send your car to respective insurance panel workshop.

Insisting to get your damaged part replaced with brand new original parts may trigger your insurance to apply for Betterment in your claim.  There could also be possible in a situation where there are no re-condition parts available, and the only option is to replaced with brand new parts, in such cases, betterment may still be applied.