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betterment clause

A betterment clause, often found in the physical damage section of automobile insurance policies, stipulates that if the repair or replacement of the damaged parts results in better than "like kind or quality," the insurers will not pay for this net improvement.

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This clause is designed to preserve the concept of indemnity so the insured does not profit from the loss when the circumstances are such that it is impossible for the insurer to repair or replace the property without bettering the insured's position.

Related Terms

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