Post Date April 1, 2012 – The auto insurance betterment clause in most car insurance policies holds the company liable for actual loss.  On a tire claim for example, the auto insurance carrier can rightfully and legally pay the fair value of the tire at the time of the loss and not for a new tire replacement.  Many, many years ago auto insurance companies in Pennsylvania, New Jersey and Ohio were using the betterment clause to confuse and beat auto insurance claimants out of millions in damage losses. They simply interpret the car insurance betterment clause to mean any new part installed on the car.  Courts in PA, NJ and OH have determined only wearing parts requiring periodic replacement such as tires and batteries are covered by the clause. According to members of a prominent auto body association, a number of car insurance carriers reduce claim amounts on car doors, hoods and other auto body parts.  The sad irony of this situation is a loss of value for any car suffering body damage. Any car appraiser worth his salt can spot the new part or new paint and immediately reduce it trade-in value. The car owner then participates in the cost of repairs that lowers the actual value of his vehicle.

-Mike 

Michael E. Dortch
President &  Managing Agent
InsureDirect.com
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 602