What is the difference between betterment and depreciation? Can my insurance company reduce my settlement based on either?
Betterment means that your repaired vehicle is better than it was before it was damaged. Your insurance company may only reduce your settlement if your vehicle’s resale value has increased over what it was before the accident. Generally, an insurer will deduct the difference between the cost of a used part (appropriate for age and condition of the vehicle) and the cost of a new part. Betterment is only considered for major parts such as transmissions or engine blocks. Betterment might be considered for other parts that if new would improve the value or salability of the vehicle. Depreciation refers to a reduction in your settlement based on the age or use of a part that is to be replaced. Certain parts on your vehicle have a “life expectancy” and your insurance company may take this into consideration. For example, if a tire on your vehicle is expected to last 60,000 miles, but it was used for 30,000 miles at the time of the accident, your insurance company may elect to pay only 50% fo
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