Insurance Companies - Another way to make money "Betterment Rule"

[shanbala]

Not sure if many of our members are aware of this rule which applies to cars older than 5 years when it comes to making an accident claim. Picture this scenario:

• Insured vehicle > 5 yrs old
• Involved in an accident
• Owner wants repairs to be carried out by Authorized dealers ie BMW Malaysia franchise holders
• Parts needs to be changed
• Authorized dealers will replace damaged and/or faulty parts with NEW parts
• This is when the "betterment" rule kicks in
• Policy holder will need to pay anything up to 20%-25% of repair cost

Insurance companies argument:"Insured vehicle > 5 yrs old, damaged parts > 5 yrs old, thus by replacing "old" parts with "new" parts, the insurance company is putting your vehicle in a better position than it was before the accident. They say your car is worth more after the accident. (Trying telling this story to a potential buyer when you decide to sell the car at a later date. Potential buyer will most probably argue that your car is a accident damage car)What a whole load of crap from insurance companies.Moral of the story:If you do not want to contribute towards the repairs bills, then, do not get the vehicles authorized dealers to carry out the repairs. Other body shops (on the insurance company panel) will most probably use 2nd hand body parts rather than new parts.After driving for more than 20++ years I find out about this rule.Policy holders be aware.

 

[Joshua Spidey]

Found out about this when I made my claim back in 2006. Insurance company only paid 80% of the claims and had a clause stating that only second hand part to be used. For new parts I had yo pay for the difference. This was with Kurnia and have not used them since.

 

[zhenghan1019]

This really answered my problem, thank you!






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