Waiver of Betterment

Betterment is a charge that can apply when new original parts are used to repair an older vehicle.

The idea is relatively simple.

If your five-year-old car needs a new original part after an accident, the new part may be considered an improvement over the old, worn part. You may therefore have to contribute part of the cost.

According to Bank Negara Malaysia (BNM), betterment applies when new franchise parts are used to replace damaged parts on accident vehicles aged 5 years and above. The applicable rate depends on the vehicle's age.

For a more detailed explanation, read BJAK's guide to what betterment means in car insurance.

A Waiver of Betterment is an optional car insurance add-on that can remove or waive the betterment charge when eligible repairs require new original parts.

Instead of paying the applicable betterment amount yourself, the insurer covers the cost according to the terms of the waiver. This can be particularly useful for owners of older cars.

For more details, read BJAK's guide to Waiver of Betterment: Definition, Function and Procedure.

Imagine your car is 7 years old and is involved in an accident.

One of the damaged parts needs to be replaced with a new original part costing RM2,000.

If a 25% betterment charge applies, your contribution could be:

With an applicable Waiver of Betterment, that betterment contribution may be waived.

The actual amount depends on the repair, vehicle age and policy terms. Betterment generally applies to the replacement-part cost, while labour charges are treated separately.

The applicable betterment percentage increases with vehicle age. BNM confirms that a specific rate applies according to the age of the vehicle.

BJAK's current car insurance guide to betterment lists the commonly applied scale as:

Always check your policy wording and insurer's applicable terms.

Not automatically.

It is an optional add-on offered by selected insurers.

For example, MSIG lists Waiver of Betterment Cost as an optional motor add-on. The add-on waives betterment charges arising from the cost of original spare parts, subject to the applicable terms.

BJAK also currently lists Waiver of Betterment among the available car insurance add-ons.

This add-on is particularly relevant if:

• Your car is 5 years old or more.
• You want repairs using original parts.
• You would struggle to pay a large repair contribution.
• You plan to keep your car for several more years.
• You want more predictable out-of-pocket costs after an accident.

For a brand-new car, betterment is generally less of a concern because the age-based charge does not apply in the same way.

However, eligibility for the add-on varies between insurers. Check the vehicle-age limits and conditions before purchasing.

For an older car, it can be worth considering.

The key is to compare the additional premium against the potential betterment contribution you could face after a claim.

You should also check whether the insurer offers the waiver for your vehicle's age and whether there are any limits.

No.

The waiver is specifically about betterment charges.

Other costs, such as your policy excess or excluded repairs, may still apply. It does not mean every repair becomes completely free.

Before buying the add-on, check your insurer's policy wording to understand what is covered and what you may still need to pay.

When comparing comprehensive car insurance on BJAK, check the available add-ons for each insurer. Availability and eligibility may differ depending on your vehicle and the insurer's terms.