Sunday, November 6, 2016

Motor Insurance - Betterment

What is BETTERMENT?

A lot of people do not consider wear and tear as their own to bear. 

The legal principle of indemnity states that insurers will put the insured in the same position as he was immediately before his loss. 

If one’s vehicle is 10 years old, wear and tear would have taken its toll whether you like it or not. Therefore, if there is a loss, since the workshops cannot readily source and give you a 10-yearold part, a new part will be the next best choice. 

But, relying on the principle of indemnity, the insured benefits from this new part and so he has to pay for the betterment aspect. Note that betterment is only applied to the part that is replaced and not to the workmanship charges.

Below is the Standard Betterment Table, base on age of vehicle.