The amount of the increase in the value of property after it has been reinstated or repaired by the insurer under a contract of indemnity. Insurers make a deduction from the claims payment as the insured’s contribution to ‘betterment’.
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A term used to express the difference in the value of property before loss and after restoration. If a 20-year roof is damaged by an insured peril and it has to be replaced in its 15th year and the restoration renews the 20-year life expectancy, the owner has obtained a 15-year betterment in the roof. Without replacement cost insurance on the roof, the owner is expected to reimburse the insurance company for the betterment entailed in the restoration. Also see Improvements and betterments.Improvement in a property which is considered to add to its value, as distinguished from repairs or replacements where the original value of the property is unchanged.
Tag: RAW
Beyond economic repair
Where the cost of repairing the insured property, eg a car, exceeds the market value of that property. In such circumstances the insurer will pay the insured the market value of the insured property at the date of loss, subject to the terms of the policy (assuming the insurer is not under any obligation to provide a replacement).