Policies and Procedures
Betterment
The Corporation’s betterment guidelines were reviewed a number of years ago, taking into account the technology and quality standards built into vehicles at that time. Since then, improved tolerances in the manufacturing of vehicles along with new metal alloys, plastics, carbon fiber components, as well as manufacturing techniques, have added to the longevity of vehicles and their components. Accordingly, the Corporation’s Betterment Guidelines have been reviewed and revised.
Due to these changes, vehicle manufacturer warranties are becoming longer in duration, and in all likelihood will increase even further in the future. The application of depreciation, predicated on the insurance industry’s principle of “Placing the Insured into the same or similar position prior to a loss” is largely based on life expectancy of a vehicle component and the duration of manufacturers’ warranties.
To alleviate some of the nuisance factor often created by the application of Depreciation, a new Betterment Threshold will be implemented. When the Total Betterment on a claim is less than $50.00 including taxes, the customer will not be responsible, and the betterment will be paid by MPI. Once it exceeds $50.00 the full betterment amount will be the customer’s responsibility.
The Corporation’s revised Betterment Guidelines will take effect September 21, 2009. In addition to the introduction of a Betterment Threshold, adjustments have been made to the components of batteries, brakes, engines/transmissions and suspensions. The revised guidelines are as follows:
| Vehicle Component | Current Mileage Betterment Guideline |
Current Depreciation Percentage | New Mileage Betterment Guideline | New Depreciation Percentage |
| Interior Electrical Components (excluding stereos) | No Depreciation | Nil | No Depreciation | Nil |
| Factory Stereos | Per year | 10% per year | 0 to 35 months 2 years and older |
Nil 5% per year 60% Maximum |
| Batteries | First 12 months 1st to 5th year |
Nil 20% per year |
2 years to 6 years 6 years and over |
Nil 20% per year 90% Maximum |
| Tires | Measure Remaining Tread | Pro Rate According to Original Tread Depth | Measure Remaining Tread | Pro Rate According to Original Tread Depth |
| Brake pads, shoes and components | 0 to 40,000 | ProRate | 0 to 60,000 | ProRate |
| Engine Assemblies (Long and Short Blocks), Transmission Assemblies, Trans Axles, Differentials, Radiators, Condensors, Exhaust Components, Alternators, Starters, and related power train components | 0 to 80,000 80,000 to 100,000 100,000 to 150,000 150, 000 to 200,000 200,000 to 300,000 300,000 and over |
Nil 20% 30% 40% 50% 60% Maximum |
0 to 80,000 80,000 to 120,000 120,000 to 150,000 150,000 to 200,000 200,000 to 250,000 250,000 to 300,000 300,000 and over |
Nil 10% 20% 30% 40% 50% 60% Maximum |
| Suspension components: Struts, Shocks, Ball joints, Tie Rod Ends, Steering Racks, Drag Links, Strut Busshings, Hub and Bearing Assemblies, and other wear and tear items | 0 to 80,000 80,000 to 100,000 100,000 to 150,000 150, 000 to 200,000 200,000 to 300,000 300,000 and over |
Nil 20% 30% 40% 50% 60% Maximum |
0 to 80,000 80,000 to 100,000 100,000 to 125,000 125,000 to 150,000 150,000 to 175,000 175,000 to 200,000 200,000 and over |
Nil 10% 20% 30% 40% 50% 60% Maximum |
| Old Damage or wear and tear (rust, cigarette burns, etc.) | Estimator Discretion | Up to 60% | Estimator Discretion | Up to 60% |
| Betterment Threshold (Minimum accumulative betterment amount inc. taxes) | None | When the Total Betterment on a claim is less than $50.00 including taxes, the customer will not be responsible, and the betterment will be paid by MPI. Once it exceeds $50.00 the full betterment amount will be the customer’s responsibility. | ||
Summary of Changes:
- Batteries will have betterment start at 24 months instead of 12 and will have a life expectancy of 6 years as compared to 5 previously.
- Brake pads / shoes will increase from 40,000 km to 60,000 km life expectancy.
- Major power train and suspension components have had some mileage adjustments made. Initial betterment will be reduced and applied in a more structured guideline.
- Betterment will not be applied or collected when the total betterment (inc. taxes) is less than $50. This will be identified in “Section VI Adjustments”, on the summary page of the estimate. If additional parts are added during a supplement then total betterment will need to be reconsidered.
- As these are only guidelines, abusive wear or extraordinary care and maintenance will be considered when betterment is applied. Betterment will be applied at the Estimator's discretion.
Should you have any questions concerning the new Betterment Guidelines, you may contact our Corporation's Estimating Coordinator, Mr. Jim Backstrom at 985-7397.