Frequently Asked Questions (FAQ'S)

What is betterment? Betterment, closely related to depreciation, is the amount the value of your car has been increased by the repair. It is normally applied to items which wear out and are usually replaced during the normal life of a car. For example, if your tires are 60% worn out and one of them is damaged in an accident, it would be replaced with a new tire but the insurance company would only pay 40% of the tire's cost. The 40% represents the useful life remaining. You would be responsible for the remaining 60% in this example.

In the New Jersey Unfair Claims Settlement Practices Regulations, N.J.A.C. 11:3-10.3(i) states in part: "Deductions for betterment and depreciation are permitted only for parts normally subject to repair and replacement during the useful life of the insured motor vehicle. Deductions for betterment or depreciation shall be limited to the lesser of an amount equal to the proportion that the expired life of the part to be repaired or replaced bears to the normal useful life of that part, or the amount by which the resale value of the vehicle is increased by the repair or replacement. Calculations for betterment, depreciation, and normal useful life must be included in the insurer's claim file."

A key point in the above regulation is the "lesser of..." provision. Keep this in mind when reviewing or negotiating any depreciation or betterment on your claim.

What are aftermarket parts? Aftermarket parts, also known by several other terms including "imitation parts", "offshore parts", "quality replacement parts", and "non-OEM parts", are made by someone other than the vehicle manufacturer, and do not meet the same specifications as the original.

What is Steering? Steering is a practice where some insurers will attempt to recommend, direct, encourage, or otherwise influence a consumer to use a repair facility selected by the insurer. The shops selected by the insurer are usually part of the insurer's direct repair or referral program, and are frequently required by the insurer, as a cost cutting measure, to use lower cost aftermarket or non-original parts which may not truly restore the safety, appearance, and value of your car to pre-accident condition, and which may jeopardize your factory warranty. You, the consumer, have the right to use any licensed repair facility that you choose. Although they can recommend, the insurer cannot require you to use a specific facility or select from a list of their "preferred" shops. N.J.A.C. 11:3-10.3(e) states in part: "..., the insured may use any repair facility of his or her own choice. ...."

This page is still under construction. Many more questions will be added. If you have a question you feel should be included, please E-mail it to us.