What Is An Auto Insurance Betterment?

Reader Question

Hi Austin, how are you today?  I am a newsletter reader of yours and your last email about being prepared for an auto accident could not have come at a better time.  My 2009 Kia mini van was involved in a pretty nasty accident recently and I have been getting the go around with the body shop lately.

Your email was spot on and I encourage your readers to take the time now to try to prepare themselves for hassle of dealing with an auto accident later.

 My question to you now is about an insurance betterment?  I am being charged $29 for my battery and another $41 for a new tire. I have argued with the body shop about these charges but they insist it is my insurance company who is charging me and not the shop.  Why would I have to pay more than my deductible amount?

Thanks

Ann

Hi there Ann

Sorry to hear about your recent accident and the fun and excitement you are having now with the repair shop.  I am also glad you took the time to read my email about accident preparedness, although it might have come a little too late?

 Good question you raise about what an insurance betterment really is.  The “betterment” you are being charged is basically depreciation on auto parts that either have normal wear or a limited lifespan.

For instance, a battery should have a normal life span of about 4 years (the estimated life span is usually stamped on the battery case) so in your case I would assume your battery to be about 3 years old. The depreciation value, or betterment that is being assessed on you is the used portion of the battery life span.

So the insurance company paid for a new battery but they assume you did use the battery for the first 3 years of its normal life and the battery was due for replacement soon and they expect you to pay for the normal usage that has occurred.  Consider the betterment as a pro-rated warranty.

The tire is also a wearable and replaceable item and they have concluded that you have used a majority of it’s useful life and should pay for the time you used it. They are paying the difference between what you used (which you pay) and the remaining life of the part.

A betterment would not be placed on a hood for instance, because the hood should last the lifespan of the vehicle, so the insurance company will pay the full replacement cost.

There is nothing illegal in charging you this betterment, and the shop is correct in saying the charge is being assessed by the insurance company not the shop. The shop just collects the betterment and usually the deductible from you the customer.

Now that being said. I recommend to my customers a simple little trick that usually works every time. Get a copy of the insurance estimate and go over it carefully.  Look for any items that are on the estimate that might not actually need to be replaced or repaired. If the job is completed, make sure the shop replaced or repaired everything they were supposed to!

Second, look at those betterment items, the battery and the tire.  IF the shop has not replaced them yet, offer to either supply the parts to the shop yourself if you think you can buy it cheaper elsewhere and ask the shop to not collect the betterment from you. Or find a cheaper replacement part for the item that is less than what the original estimate called for.

Example. Say the estimate is paying $120 for a replacement battery, but you can buy one at Walmart for $70 and supply it to the shop for replacement. The shop will still be paid the labor fee to replace the battery and they are not responsible for the warranty (Walmart will be). The shop should then not collect the betterment from you, and either subtract the difference from your deductible amount or give you cash back.

If the shop is not willing to let you supply the parts, try this.

Contact your insurance company (or the one paying the repairs) and give them an option of the part replacement. Tell them you can buy a battery that you will be happy with for $70 not the $120 the estimated and you would like to have them apply the difference to your betterment but still allow the repair shop to provide their battery.

In 99% of the cases where I had the customer contact the insurance company and apply a small amount of pressure on the adjuster to remove the betterment they did so.  Most adjusters are not going to take the time to re-write the estimate and send it to the repair shop for $50-$100, they will just call the shop and tell them not to charge you and will make it up to the shop some how or they will issue you a check for the betterment later on.

If the shop has not started on the repairs I would tell them you are NOT going to pay the betterment and they need to find a way to help you cover those costs if you are going to leave the vehicle there for repairs. If you told me that and I was going to loose a $5,000 repair I would find anyway possible to absorb the betterment myself to keep the job.

In all honesty you DID get the use of the parts in question and should pay the betterment, BUT the squeaky wheel gets the grease. 🙂

Hope this finds you well,

Blessings

Austin Davis

P.S. take just a minute and compare your auto insurance rates using the form on this page. Just enter your zip code to see rates in your area.  It’s free and there are no obligations to buy anything.  Many readers tell me State Farm and Liberty Mutual gave them great rates.