What is “Betterment” In Car Insurance and Why It Matters to You
Ever heard the term “betterment” when making a car insurance claim and wondered what it really means? Don’t worry — you’re not alone! Many car owners only find out about it after an accident, when they see the repair estimate. Let’s break it down in simple terms.
💡 What Does “Betterment” Mean?
“Betterment” happens when your car gets new replacement parts that make it better than it was before the accident.
For example:
If your six-year-old car’s bumper is damaged and replaced with a brand-new bumper, your car’s value technically increases — it’s now “better” than before.
Because of that, insurance companies may ask you to pay part of the cost for the new parts. That shared cost is what we call betterment.
⚙️ How Is Betterment Calculated?
Insurance companies use a betterment table to decide what percentage you’ll need to pay, depending on your car’s age.
Here’s the current betterment rate guideline used by most insurers in Malaysia:
| Age of Your Car | Betterment Rate Applied (%) |
| Less than 5 years old | 0% |
| 5 years | 15% |
| 6 years | 20% |
| 7 years | 25% |
| 8 years | 30% |
| 9 years | 35% |
| 10 years and above | 40% |
This means if your car is 7 years old and you need to replace a damaged bumper, you’ll pay 25% of the cost for that new part.
🧾 A Simple Example
Let’s say:
- Cost of new bumper = RM2,000
- Betterment rate (for a 7-year-old car) = 25%
You’ll pay RM500, while your insurer covers RM1,500.
It’s a fair way to balance repair costs when older parts are replaced with brand-new ones.
💬 Can I Avoid Betterment Charges?
Yes — some insurance companies offer an Add-On to Waive Betterment (also known as Betterment Cover or Waiver of Betterment).
With this add-on, the insurer pays 100% of the replacement cost, even if new parts make your car better than before.
If your car is over 3 years old, this add-on can save you a lot of money when you make a claim.
🛡️ Ace Agency’s Tip
At Ace Agency, we believe that understanding your coverage helps you make smarter choices.
Whether you’re renewing your car insurance or exploring a betterment waiver, our team will guide you through the best options based on your car’s age and condition.
💬 Talk to us today to find out how you can enjoy full coverage and fewer out-of-pocket costs when accidents happen.
