You may have come across the term “waiver of betterment” in your car insurance policy. But do you know what waiver of betterment means and how it is useful to you and your car?
This article will therefore give you an insight into this car insurance add-on, waiver of betterment, for your knowledge.
Betterment
In the event of an accident, one of the things that worry car owners is whether their car would still be in good condition after the repair.
Usually, cars involved in accidents risk having other damages in the future, over time. This is because insurers only cover the cost to replace damaged parts with second-hand parts for vehicles that are 5 years old and above.
Therefore, a solution to that is to replace damaged parts with new parts during the car repair. However, replacing damaged parts with new parts is not free. You will be charged a certain amount for the betterment.
Fortunately, there is a way to be excluded from paying the betterment cost that is by getting an add-on cover called waiver of betterment.
Betterment – Additional cost that policyholders will have to bear when a damaged part of a vehicle is replaced with a brand new original part
Definition of waiver of betterment
Comprehensive insurance indeed covers the repair cost of the policyholder’s vehicle due to a car accident. However, for vehicles aged 5 years old and above, a betterment charge will be imposed on the policyholder if a damaged vehicle part is replaced with a brand-new original part. The scale of betterment in the insurance industry is as follows:
Example:
Assume that you have a 10-year-old year car that requires a new vehicle part worth RM3,000. You will have to pay RM1,200 which is 40% of the amount while your insurer will cover the remaining RM1,800 which is 60% of the amount. Note that the additional cost that you have to bear is only for the new part not inclusive of the labour cost.
Should you have a waiver of betterment additional cover, you will be excluded from paying the betterment to your insurer for a new vehicle part. This will therefore save you money.
However, this add-on cover is only eligible for vehicles aged between 5 to 9 years old, subject to insurance providers.
Another example:
Assume that your 7-year-old car runs into an accident, damaging the driver’s side of the door. As a result, you need a replacement for the damaged door.
Should you have a waiver of betterment coverage, your panel workshop will replace the damaged door with a new door and not a second-hand door. You also do not have to pay for the betterment cost for the new part as the cost is waived.
Why is it important to get a waiver of betterment add-on cover?
As a car owner, having this additional coverage will ensure the quality of your vehicle after the repair at a panel workshop.
Through this add-on cover, you can get a brand new instead of a second-hand vehicle part. You get to use a brand new vehicle part from the factory and not just any vehicle part from vehicles that are no longer used.
Who is eligible to get a waiver of betterment add-on cover?
Vehicle owners who own vehicles aged between 5 to 10 years old are eligible to get a waiver of betterment add-on cover. Refer to our visual below for the vehicle age that is eligible for this cover.
However, note that the eligible vehicle age may vary across insurers as some insurers set an age limit between 5 to 15 years old.
How do you purchase a waiver of betterment add-on cover?
Only some insurance companies offer this add-on cover. You can easily purchase it when renewing your comprehensive policy.
How much do you have to pay for a waiver of betterment add-on cover?
Generally, the additional premium for this cover is RM100 depending on the sum insured and vehicle age. The premium may vary across insurers.
For your reference, below is a table of the premium charges for this cover by MSIG:
Insurance companies that offer waiver of betterment add-on cover
As we have mentioned, not all insurance companies offer this add-on for their comprehensive policy.
For your reference, these are some of the insurers offering the waiver of betterment cover:
- Allianz Insurance
- MSIG Insurance
- AXA Affin Insurance
- Kurnia insurance
- Berjaya Sompo insurance
- Zurich Insurance
Example of calculation of waiver of betterment by MSIG
For your reference, below is the calculation of the betterment charge by MSIG:
Is it worthwhile to get a waiver of betterment add-on cover?
Yes. We recommend you get a waiver of betterment add-on based on the following reason.
As mentioned, if your vehicle aged 5 years old or above runs into an accident and is sent to a panel workshop for repair, you will only get second-hand or used parts to replace damaged vehicle parts. This may risk your car due to using second-hand instead of new vehicle parts.
Therefore, if you get the waiver of betterment add-on cover, you can get a new vehicle part without any extra charge. This will also ensure better car condition.
Conclusion
You may consider including the waiver of betterment in your insurance policy if your car is 5 years old or above. Not only do you get to keep your car running in optimal condition, but you could also save your money.
Simply visit Bjak to check out this add-on cover and other car insurance add-ons. You can also compare up to 15 insurance providers in Malaysia, so go get your free car insurance quotes online at Bjak.my today.
Bjak is one of Malaysia’s biggest insurance comparison websites, offering policies from over 10 brands. Get your free insurance quote from Bjak today!
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