Betterment Car Insurance Malaysia Accident Repair Claim|

A private car or commercial vehicle age older than five (5) years old when it is involved in accident damage claims,  the insurance company and the appointed repair panel workshop will apply the BETTERMENT Clause in assessing the repair cost for your old car parts when processing claim.

Betterment occurs when in the course of repairing an accident-damaged vehicle, an old part is replaced with New Franchise part. You will need to pay for the difference in costs as your are placed in a better position after the accident with the New Franchise part.  This is in line with the insurance principle of Indemnity.

Please note that your insurance company has the sole discretion whether to apply the  betterment.

If your insurance company choose to apply betterment in your accident damage repair claim, the motor insurance industry will apply the following scale :

Age of Vehicle/Years                      Maximum Rate(%)

Less than 5 years                               0

5                                                                15

6                                                                20

7                                                                25

8                                                                30

9                                                                35

10 year and above                         40


Example 1:

If insured’s car is less than 5 years old,  year manufactured was 2011 and registered in 2011. The repair and replacement of old parts of your car cost RM4,000.  You need not pay anything to the panel workshop. The motor insurance company will bear the full replacement of New Franchise parts and repair cost of RM4,000.

Example 2:

If insured’s car is 6 years old, year manufacture and registration was year 2008 and registered in January 2008.  The date of accident was October 31, 2014. The car New Franchise  parts replacement cost is RM4,000.  Betterment is applied.

The insured has to pay 15% of RM4,000 = RM600 to the panel workshop.  The motor insurance company will only pay the repair and replacement of new part cost up to RM3,400.

Example 3

If the insured car was manufactured in 2002 and registered in March 2003.  Date of accident repair was December 2013. The repair and replacement of new parts cost was RM4,000.  Betterment was applied.

The difference in costs paid by insured is RM4,000 x 40% = RM1,600. Panel workshop will collect RM1,600 from insured.

The motor insurance company paid RM2,400 only for the accident claim and applied BETTERMENT clause.

By now, you probably understodd why some of your friends who owned cars older than five (5) years old had been upset and gone through a lot of hassles talking to their insurance agents and bargaining with the panel workshops and making numerous phone calls to the motor insurance company to reach an amicable settlement of accident damage repair claims.

How about you?  For your private car insurance renewal or company’s commercial vehicle renewal, make sure you are adequately insured according to value  your car make and model or commercial vehicle’s make and model it is worth at the point of insurance cover.

We will explore on the insured value or sum insured and agreed value in next topic.

Need help, please contact us.


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