Tips To Understanding - "Betterment & Depreciation"

 

What is betterment and how does it affect me?

It was a hot sunny day, mid July, when Tom came out to his car in
the parking lot after shopping. But much to his surprise and disappointment there now was a scratch about 8 inches long on the fender. "I'll just have the insurance company pay for repainting the whole car" he said. But such may not be the case! Otherwise, the owner would be advantaged by the accident through a new paint job.

In cases where the repairs or replacement as a result of an insurable loss end up giving the insured something better than
he or she had before the loss ...the difference is known as "betterment". The concept of insurance does not allow the
insured to profit or "better" from the loss. Then an appropriate value must be agreed on as to the owner's contribution towards the betterment.

This is a difficult concept to explain or understand when someone has suffered a loss. Especially after an accident or loss when the policyholder played no role in the event. They have paid insurance premiums and now have the inconvenience of repairs. On older cars

it's simply not realistic to expect an update on a vehicle without some cost to the owner. Remember also that insurance companies rates are usually based on losses. This then would probably result in higher insurance rates for everyone. So the insurance company would have the 8 inches or so fixed and repainted, but, not the whole car.

Unfortunately, there may exist an attitude or misunderstanding
sometimes that the insurance they were purchasing in their policy guaranteed them that their property would be repaired at no personal cost.

What is depreciation and how might it affect me?

Let's look at the same situation, except that Tom finds his car tires have been slashed by vandals. Does Tom benefit from new tires on his car? You bet he does! So the insurance company would take into consideration, the mileage, wear and tear of the tires and Tom would have to pay the difference to get new tires on his car. After all, Tom had tires that had 20,000 miles on them and now he has new tires with zero mileage. In new condition. Tom won't have to replace or worry about them for awhile.

Betterment and depreciation decisions on claims are made on a individual basis. They are dependent on the specific facts of each case. Always though, the object of the claim is to return the vehicle to its pre-accident/loss condition and shape and includes the body, tires, etc..

Interesting Tips.......Believe them or not!

Road deaths drop in '98

Transport Canada says statistics for 1998 show that fewer people are dying in traffic accidents. What is increasing though is the number of motorcyle and bicycle fatalities.

Statistics reveal that

:

Nearly 3,000 people died and 217,614 were injured.

There were 150,919 traffic accidents in 1998.
That's a 4.7% drop in fatalities and 1.7% drop in injuries compared to 1997.
This means that road fatalities across Canada were at their lowest levels in

43 years.

The deaths include 1,479 drivers, 729 passengers, 401 pedestrians, 166 motorcyclists and 76 bicyclists.

Motor bike deaths were up about 35% from the year before and bicyclist fatalities increased about 14%.

Are Sports Utility Vehicles Safe? You decide!

The National Highway Traffic safety Administration(U.S.A.) reports

that the rollover rate for SUV's is 98 per 1,000,000 which is double that of all vehicles which is 47 per 1,000,000.

Between 1991 and 1994 about 9,000 people have died from rollovers. In fact, 10,000 people died in 1996 alone. Apparently, the Sports Utility Vehicle tends to tip over and roll due to the swerve/counter-swerve with its high-gravity point. SUV's were specifically built to drive at slower speeds and clear larger obstacles and difficult terrain. They have a higher center of gravity. This interesting trait is deadly when combined with faster driving and defensive street driving such as attempting to avoid an obstacle by swerving.

Are Airbags Effective?

According to the National Highway Traffic Safety Administration

more than 2,920 people owe their lives to airbags. Driver deaths have been reduced by 14% and passenger deaths reduced by 11%. When combined with the proper use of a
seatbelt it reduces the risk for serious head injuries by 75%. Where seatbelts alone have a 38% risk factor.

However, since 1990 there have been 105 deaths that have been reported and a majority of these were children.

Believe it or not!!!

 

MORE INTERESTING STATISTICS Despite a crackdown by York Regional Police(Ontario, Canada) it appears fatalities are on an increase. The statistics recently released are as follows: Forty one people lost their lives in traffic Fatalities collisions in 1999, compared to 33 in 1998. Eight of last year's (1998) fatal collisions were double fatalities. It appears speed is the single biggest contributor. Last year, it accounted for 36.4 %, compared to 26.7% the year before. Alcohol was a contributing factor in 21.2 % last year. This was up 16.7% in 1998 Failing to stop at a stop sign was responsible for 9.1% of last year's fatal collisions, up from 6.7% a year earlier. Misadventures of carelessness dropped to 3%, from 13.3% the previous year Pedestrian actions accounted for 9.1% of fatals in 1999 which is less than half the 20% total in 1998. Weather was a factor in 9.1% of fatal accidents in 1999 compared to 3.3% in 1998 Now................according to RIDE statistics: There were fewer vehicles stopped in 1998. 29,856 to 32,480 in 1998 575 roadside breath tests were administered which was up from 448 the year earlier 99 (12 hour) suspensions were handed out. This is double the 51 in 1998 17 (90 day) suspensions were handed out. This is up from the 11 handed out the year before. 5 impaired driving charges were given which was up from 4 in 1998 15 charges of driving with more than the legal limit of alcohol in the bloodstream were handed out. This was up from 10 the year before. 11 drivers were charged with other criminal code violations. This was up from 1 the year before. 18 people were charged with failing to wear seat belts. This is up compared to the 1 charge the year before. Ironically for all the stepped up public safety efforts which includes a 40 % increase in traffic enforcement over 1998 the increased carnage and trauma during 1999 is very alarming. It appears that people don't seem to get it and that they should not drink and drive. Fatal accidents not only devastate family and friends, they affect emergency crews and the attending police officers. It's effects are far reaching and troubling. Canadian Insurance Industry Facts of Interest Total Property/Casualty Insurance Companies operating in Canada are 237. Total Property/Casualty Insurance Agencies and Brokerages in Canada are 7,213 Total estimate of people employed in the private Property/Casualty industry in Canada: Insurance Companies  35,555 Brokers                         56,885 Adjusters/Appraisers– 3,865 (1997 stats)   6 Tips to Reduce your Automobile Gas Bills 1) Always keep your engine well tuned. A poorly tuned engine can increase fuel consumption by 50% experts say. 2) Avoid fast jackrabbit style starts. They're bad for your tires and terrible for your fuel consumption. 3) Don't let your engine idle if you're waiting for someone or in a line at a fast food restaurant. One minute of idling uses more fuel than restarting your vehicle engine. 4) Install a block heater to help warm your vehicle engine. A warm engine means easier starting with fewer emissions and less need for idling. 5) Plan you shopping and errands to combine multiple tasks on one outing to avoid several different separate trips/outings which can waste a lot of fuel. 6) Check your tire pressure regularly. Under-inflated tires can increase fuel consumption as much as 5%