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Comprehensive car insurance ensures that your car will be covered against damages if it gets into an accident. However, you can also include other additional coverages such as damages due to natural disasters or also known as special perils, and windshield protection. But have you heard about waiver of betterment coverage? Is it important?
Betterment and Waiver of Betterment Explained
Here are some ins and outs of betterment waiving coverage if you are contemplating including this protection to your car insurance plan.
What Is Betterment in Car Insurance?
In an auto insurance plan, betterment or depreciation can be defined as an additional cost incurred when replacing original car components with brand new ones due to damages from an accident. Alternatively, it refers to the deterioration of components over time due to normal usage. This circumstance is also known as ‘wear and tear’.
Car components such as tires and batteries are susceptible to wear and tear. Therefore, it is strongly recommended to inspect and maintain your car’s tires when they reach five to six years of use. Replacing worn tires with new ones may incur the cost of betterment.
Why You Should Add Betterment Waiver Plan?
Now that we know what betterment is, it is also important to acknowledge that the prices of brand-new car parts might be higher in price due to market demand, or current global supply issue. Absorbing the additional cost for newly replaced and mint-conditioned parts might prove challenging for some consumers.
You might have the alternative of pursuing a more cost-effective option, such as opting for second-hand parts—whether OEM (Original Equipment Manufacturer), green parts, or aftermarket parts. However, this choice comes with the risk of not having the replaced components in optimal condition.
This uncertainty can leave owners feeling insecure and overly cautious. Hence, opting for depreciation coverage could provide them with the peace of mind they need. Because of that, car owners opt for a waiver of betterment to be included as an add-on coverage.
What Is The Cost for Betterment Waiver Policy?
Below is the latest amount of annual premium chargeable according to MSIG insurance. This cost is calculated based on vehicle sum insured and age of vehicles.
| Vehicle Sum Insured (RM) | ||
| Age of Vehicles (Years) | Below 100,000 | 100,000 to 200,000 |
| Annual Premium (Exclude 8% Service Tax) (RM) | ||
| 4 (new) | 30 | 40 |
| 5-7 | 90 | 200 |
| 8-11 | 180 | 300 |
| 12-15 | 225 | 400 |
Betterment Standard Rate
Table below shows the common rate applied for betterment charges which are based on the age of your vehicle:
| Vehicle Age | Betterment Rate |
| Below 5 years old | 0% |
| 5 years old | 15% |
| 6 years old | 20% |
| 7 years old | 25% |
| 8 years old | 30% |
| 9 years old | 35% |
| 10 years old and above | 40% |
However, it is also notable that most insurers do not cover betterment for vehicles with less than five years of age. For vehicles built in Malaysia, the age shall be counted from its original registration date. Meanwhile, for new imported Completely Built Unit (CBU) and Imported second hand, used or reconditioned vehicles, the age will be counted from year of the manufacturer.
List of Insurance Providers That Offer A Waiver of Betterment
Many insurance companies offer motor insurance add-on that waives the betterment charges for an additional premium. This approach will reduce the financial burden on the owner of an older car that uses new original replacement parts in an accident. Here are the list of insurance providers that offer waiver of betterment in Malaysia:
- Allianz Insurance;
- MSIG Insurance;
- Generali Malaysia Insurance;
- Kurnia Insurance;
- Berjaya Sompo Insurance;
- Zurich Insurance.
Renew Your Car Insurance at Qoala for A Peace of Mind
As a conclusion, the decision whether to add waiver of betterment is always in your hands. By incorporating this option, you can help avoid financial losses and make a more informed choice for your coverage. Here are some tips and tricks to help you make up your mind:
- Compare. Different insurance providers have different policies on their depreciation waiver coverage. Pick the ones you think worth the offer;
- Consider the option for second hand parts as they might be useful and effective as long as they are in the same condition and age with the original parts;
- Lastly, ask your trusted insurance provider or contact us for more details on betterment coverage policy. And don’t forget to always be vigilant on the road and take a good care of your vehicles!
If you want to get the best car insurance coverage, visit Qoala’s website for more information. Qoala is an insurance platform that allows you to compare and select affordable car insurance from several top insurance companies. The car insurance renewal process can be done faster and safer with just a few easy steps!
