What Does the Term Betterment Mean in Auto Insurance?

After an accident, it‘s the auto insurance company’s job to pay for any repairs that are necessary for getting your vehicle back to pre-accident condition. But what happens if a tire has pre-existing tread and is damaged during the accident? This would be considered betterment. Which is the enhanced value of real property arising from local improvements.

For safety reasons, your auto insurance company cannot put a used tire on your car. They would, in this case, pay for a new tire to be put on your vehicle. Now your vehicle is in better condition than it was and has a higher market value than it did prior to the accident. See the problem?

Because the insurance company is paying to improve the condition of your vehicle – a service that goes beyond what the monthly insurance premium covers – you will likely be required to pay for betterment. For example, if your damaged tire had 40 percent of tread remaining, then the insurance company may only pay 40 percent of the cost of a new tire, and you would pay the remaining 60 percent. This happens whether or not you are the at-fault party in the accident. Which means that even if you’re not the one responsible for the accident, you may still be required to pay for betterment on certain parts, such as your transmission, engine block, or any other part that improves the condition or resale value of your vehicle.​

Getting Auto Coverage With Nevada Insurance Enrollment

Want to learn more about your rights and responsibilities if you’re in an accident? At Nevada Insurance Enrollment, your auto insurance agent can help you review your policy and make sure you’re prepared for the unexpected.