What does "betterment" refer to in the context of insurance claims?

In the context of insurance claims, "betterment" refers to any improvement made to an asset that goes beyond restoring it to its original condition prior to the loss or damage. When a claim is assessed, it is important to ensure that any repairs or replacements do not result in a situation where the insured ends up with something of greater value than what they originally possessed. For instance, if a car is damaged in an accident and gets upgraded with newer features during repairs, the increased value of the car may be classified as betterment. Insurers will typically not cover costs associated with betterment in order to maintain fairness in the claims process and ensure that policyholders do not gain financially from a claim. This concept is critical to understanding how insurance claims are evaluated, as it helps to balance the interests of both the insurer and the insured.