This is an introductory guide to help you better understand insurance protection you can purchase when you travel. It gives you basic information to help you make an informed decision when purchasing travel insurance policy.
What is travel insurance?
You purchase a travel insurance to cover yourself and/or your family against travel-related accidents, losses or interruption. The coverage is usually limited to the period of your travel. However, some insurance companies may offer various combinations of protection to cater to the specific needs of customers, including long-term annual policies if you are a frequent traveller.
Scope of cover
The scope of cover and scale of benefits differ between insurance companies and you should shop around to ensure that you purchase a policy which best meets your requirements. The coverage commonly provided under a travel insurance policy include:
- Personal accident
- Medical and its related expenses
- Loss of baggage, personal effect and money
- Loss of passport
- Personal liability
- Delayed baggage
- Travel delay
You can take a travel policy for you and/or your family members. If you purchase a family policy, coverage for each family member is apportioned from the total sum assured. In the case of a claim, compensation payable will be in accordance to the portion allocated to each member and should not exceed the sum assured in total.
Please note that if you are above a certain age limit, you may not be able to obtain a travel insurance policy.
Understanding the policy benefits
- Personal accident – you are normally covered for death and total permanent disablement for a period within 365 days after the occurrence of the accident. The compensation will be paid according to a scale of benefits and may differ from one insurance company to another.
- Medical and related expenses – coverage for hospitalisation, hospital or surgical expenses, outpatient medical expenses, as well as daily allowances up to a maximum number of days, should you be hospitalised for more than 24 hours.
- Loss of travel deposit or curtailment of journey – you will be reimbursed for expenses incurred due to loss of travel or accommodation expenses paid due to cancellation or curtailment of the journey.
- Loss of baggage, personal effects and money – this covers accidental loss or damage to your baggage, clothing, personal effects, and even money, caused by the carrier.
- Loss of passport – you will be reimbursed for additional hotel charges, travel and other expenses incurred in the country you visited, while obtaining the replacement of a lost passport. Such loss must be reported to the police within 24 hours.
- Personal liability – should you cause accidental bodily injury to a third party or loss or damage to the property of a third party, the insurer will indemnify you for the legal liability.
- Delayed baggage – if your baggage is lost or misplaced for at least 12 hours from the time of arrival at your destination, you will be reimbursed for expenses incurred to purchase essential items of clothing or personal effects.
- Travel delay – you will be paid a sum of money, according to a schedule, if your flight or voyage is delayed for more than 12 hours due to reasons beyond your control.
- Hijacking – the insurer may make daily payments up to a specified maximum number of days, if your journey is interrupted for more than 12 hours due to an act of hijack.
- Repatriation – in the event of accidental death of the insured, the insurer will reimburse the insured’s legal representative for the cost of returning the remains home.
Losses caused by certain events are excluded from the cover. Some common exclusions include:
- War risks
- Suicide and insanity
- Provoke murder or assault
- Childbirth or miscarriage
- Hazardous sports
In addition, there are exclusions involving events such as baggage delay and loss of baggage and personal effects due to seizure or destruction under quarantine or custom regulation. You are advised to always read carefully and understand your policy exclusions.
Important points to note when buying travel insurance
Check with your insurance company on the personal effects that can be covered under travel insurance as the coverage differs between insurance companies.
You are advised to nominate a beneficiary and ensure that your beneficiary is aware of the travel insurance policy that you have purchased.
If you have purchased more than one travel insurance policies, in the event of your demise and disablement, you or your beneficiary, as the case may be, will be compensated for each policy. However, for certain losses such as medical expenses which are compensated on reimbursement basis, you will only be compensated once for the actual loss suffered.
Ensure that your insurance company has a good network of foreign affiliates which can provide you with the necessary assistance when required
Medical and emergency assistance
It is important to check whether your insurance company provides 24-hour emergency hotline service.
What should you do in the event of damage/loss
- Contact the medical and emergency assistance hotline
- Certain travel policies cover 24-hour emergency hotline service which provides you with access to assistance such as medical advice, referrals, medical evacuations and travel related matters such as lost passport and baggage.
- Notify the authorities
- If your insured belongings are lost or damaged, you must take all reasonable measures to protect, save and recover them, and must also promptly notify the local police, hotel, transportation company or transportation terminal authorities, whichever is applicable.
- Notify your insurer as soon as possible
- You should submit the claim form with all supporting documents such as your original policy, the medical report, police report and any relevant documents to support the claim as soon as possible to your insurance company. You should check the time frame for claim notification stipulated in your policy.
Annuities for your retirement
This is an introductory guide designed to provide basic information about using annuities for retirement planning.
How much do you need for retirement
In general, a retired individual may need approximately 60% of his/her last drawn salary to maintain his/her existing standard of living during retirement. The Employees Provident Fund (EPF) contribution can be an important source of retirement income but it may not be sufficient to finance your total retirement needs. A survey by EPF showed that about 72% of contributors spent all their savings within three years of withdrawal upon retirement. As such, you may need to supplement your EPF savings. One way of doing this is to use annuities to provide you with a stream of income during your retirement years.
What is an annuity and why do you need one?
An annuity is a contract by which an insurance company agrees to provide a stream of income to someone for life, in exchange for a lump sum payment, or otherwise called premium contribution. This ensures the lump sum that you have is converted into a lifetime income, thus removing the uncertainty and problems that you may face should you outlive your financial resources. You may also purchase an annuity plan that guarantees income payment for your loved ones after your demise.
To purchase an annuity plan, you may pay to an insurance company a lump sum premium just before retirement. Alternatively, you can make periodic premium payments until your selected retirement age. Upon retirement, the insurance company would provide monthly income payments for the rest of your life. You can buy annuities from any life insurance company which offers annuity products
Types of annuity
The common types of annuity plans are:-
Immediate annuity – the income payments begin within 12 months after you buy the annuity. This is suitable for those who are about to retire or have already retired. The premium is paid as a lump sum at the time of purchase.
Deferred annuity – the income payments begin more than 12 months after you buy the annuity. You may buy this type of annuity plans at any time during your working years. The premium can be paid as a lump sum, which will be left to accumulate with the insurance company, or you may make a series of periodic payments up till your retirement.
Example: At the age of 30, you may purchase a deferred annuity that begins income payments at age 55. You can choose to either pay a lump sum premium then or make yearly premium payments until you are 54. The lump sum premium paid at age 30 will be smaller compared with what you have to pay if you purchase an immediate annuity at age 54. This is because the premium paid at age 30 will be invested by the insurance company during the savings accumulation period (refer Diagram 2).
Saving for an annuity
In order to purchase an annuity, you may need to have a savings arrangement that enables you to purchase an immediate annuity upon your retirement. Alternatively, if you want to pay a smaller premium, you may want to consider purchasing a deferred annuity, where the premiums paid earlier in your life will be invested by the insurance company to accumulate the amount needed to provide for your retirement income.
It is advisable to start saving as early as possible during your working years to build enough funds to provide you with a worthwhile income when you retire. For example, if you save RM30.64 per month for 30 years, and assuming an average interest rate of 6% per year, this will give you a lump sum of RM30,000. With this lump sum, you can purchase an immediate annuity that gives you an income of about RM120 per month. If you save RM102.12 per month for 30 years, with the same average interest rate of 6% per year, this will give you a lump sum of RM100,000. With this lump sum, you can purchase an immediate annuity that gives you an income of about RM400 per month.
Note: the above figures are used purely for illustration purposes. The actual premium rates of annuity payment (i.e. the income stream) are subject to changes].
Choosing the right annuity
The type of annuity you choose and its benefits will determine the amount of income you will receive during retirement. It is important to check all the options offered by various insurance companies before you buy the annuity plan that best suits your needs.
The amount of income payment you will receive will depend on:
- the amount you pay to purchase the annuity;
- your age when you purchase annuity and your sex; and
- the benefits options you choose (see below).
You can usually choose to have your income paid every month, every three months, every six months or once a year.
- Level annuity without guaranteed period – pays a fixed regular income as long as you live.
- Level annuity with a guaranteed period – pays a fixed regular income for the rest of your life, or at least for a guaranteed period.
- Example: A person purchases an annuity with a guaranteed period of 10 years. If he dies after 6 years, the annuity payments will continue to be paid to his beneficiary for the remaining 4 years. If he outlives the guaranteed period of 10 years, he will continue to receive the income payment for as long as he lives.
- Increasing annuity – pays an income which increases each year at a specified rate to partially protect your income from inflation, for the rest of your life. With increasing annuity, the starting income is normally lower than you would get from a level annuity, but it will provide you with better income some years later in your retirement period.
- Joint-life annuity – pays an income for the rest of your life, and then continues to pay the income to your partner for the rest of his/her life, after your demise. However, income to your partner may be for a reduced amount.
Example: A joint-life annuity for RM1,000 per month may continue to pay a reduced income of RM500 per month after the demise of the first partner as long as the other partner lives.
Medical & Health insurance
This is an introductory guide designed to provide you with a basic understanding of medical and health insurance (MHI). It gives you basic information so that you can make an informed decision when purchasing a MHI policy.
What is MHI?
A MHI policy is generally designed to cover the cost of private medical treatment, such as the cost of hospitalisation and healthcare services, if you are diagnosed with covered illnesses or have had an accident.
The coverage is provided by a licensed insurance company, in exchange for which you pay premiums. Make sure that you deal only with a licensed insurance company or its authorised agents or a licensed insurance broker when you buy a MHI policy.
Why should I buy a MHI policy?
A MHI policy will help you to pay for the various hospitalisation and medical expenses that you will incur, if you become ill or injured. These expenses will include hospital room and board, professional and surgery fees and medical supplies and services. A MHI policy will also help you if you are not able to work because of illness or injury.
Types of MHI policies
There are four main types of MHI policies:
Hospitalisation and surgical insurance provides for hospitalisation and surgical expenses incurred due to illnesses covered under the policy.
Dread disease, or critical illness insurance provides you a lump sum benefit upon diagnosis of any of the 36 dread diseases or specified illnesses.
Disability income insurance provides an income stream to replace a portion of your pre-disability income when you are unable to work because of sickness or injury.
Hospital income insurance pays you a specified sum of money on a daily, weekly or monthly basis, subject to an annual limit, if you have to stay in a hospital due to covered illness, sickness or injury.
An insurance company may offer you these products individually or in combinations. You need to be very careful when choosing one to suit your needs and therefore, always take time to discuss with the insurance company or its agent about the MHI policy that you are planning to buy.
You should understand the scope of cover provided under the policy, the various terms and conditions and the cost of the insurance cover. You should also be aware of what will happen if you want to switch your policy from one insurance company to another, or if you want to transfer from one type of policy to another. For example, you may be subject to new terms and conditions of the new policy or of the new insurance company.
Benefits covered under a MHI policy
The payment of benefits will depend on the type of policy that you buy. You must check the policy contract for details of the benefits, such as what is and what is not covered, when benefits will be payable and how they will be paid.
A hospitalisation and surgical policy, among others:
Where can I get a MHI policy?
You may get a MHI cover through:
- a group plan at work, where your employer pays the premiums or you pay the premiums on your own. If it is a group plan sold under a scheme, you should get the details on terms of the arrangement between the organiser of the scheme and the insurance company especially on terms of continuity of the scheme. Also, please ensure that the insurance cover offered under the scheme is provided by a licensed insurance company; or
- buying an individual plan on your own. Individual insurance generally costs more than group insurance, but you may be able to customise your MHI plan to meet your needs according to your financial capability.
How do I buy a MHI policy?
You can buy a MHI policy directly from the insurance company, or through its authorised agents, licensed insurance brokers (generally or group MHI policies), or banks/ financial institutions which have bancassurance arrangements with insurance companies.
Importance considerations when shopping for MHI policies
- Shop wisely before you buy – Policies differ as to coverage, benefits and costs (i.e.premiums), and companies differ as to services. Compare before buying.
- Don’t buy more than you can afford – A single comprehensive policy is better and cheaper than several policies with overlapping or duplicate coverage.
- Know whom you are dealing with – Only deal with a licensed insurance company or its authorised agents or a licensed insurance broker when you buy a MHI policy. If a person cannot verify that he or she is an authorised agent of an insurance company, do not buy from that person. If in doubt, ask for evidence of the agent’s registration or check directly with the insurance company. Please note that a business card does not necessarily mean that the person is an authorised agent.
- Get information on the agent and insurance company – Write down the agent’s and/ or the insurance company’s name, address and telephone number or ask for a business card that provides all that information. This information is important if you want to enquire, renew or claim on a policy.
- Take your time – Don’t be pressured into buying a policy. A professional insurance agent will not rush you. If you are not certain whether a policy is what you need, ask the agent or insurance company to explain it to you properly.
- Complete the application form carefully – If you decide to buy a policy, you will need to disclose material facts to the insurance company. Some insurance companies ask for detailed medical information. If you leave out any of the information requested, coverage could be refused for a period of time for any medical condition you neglected to mention. The insurance company also could deny a claim for treatment of an undisclosed condition and/ or cancel your policy.
- Look for an outline of coverage – You should be given a brochure containing the important features of a particular MHI policy, when you are approached to purchase a MHI policy. After buying the policy, you should be given the policy contract. Read the terms and conditions in the contract carefully.
- Do not pay with cash – Pay by cheque, money order, auto-debit or bank draft made payable to the insurance company, not to the agent or anyone else. Get a receipt with the insurance company’s name, address and telephone number for your records.
- Notification of the decision on the application – Insurance companies must make the decision whether or not to accept your application within 30 days of the application date. If you do not receive the decision within the stipulated period, contact the insurance company and obtain in writing the reason for the delay. If 15 days go by without a response, contact Bank Negara Malaysia (BNM).
- Read your policy contract carefully – Check to be sure that a copy of the original application is attached to the policy, and that it is complete and accurately reflects your medical information. Review the schedule of benefits and make sure that the information is correct and what you were expecting. There should be no missing pages and no unexpected riders or exclusions in the policy.
Important: Your policy is a legally binding contract. If you have questions about it, call the insurance company and get the questions resolved during the 15-day ‘free-look’ period.
Premium on renewal of policy
When you want to renew your policy, the insurance company might take one of the following decisions:
- renew the policy with a level premium;
- renew the policy with an increased premium; or
- decline to renew the policy.
The insurance company is required to provide you with the reason for its decision on a change in the premium level or why a policy is not renewed.
Cancelling your policy
You may cancel your MHI policy by giving a written notice to the insurance company. For certain types of MHI policies, you may be entitled to a certain amount of refund of the premium, provided that you have not made a claim on the policy. You can obtain details of the policy cancellation process, including the amount of premium refund, in the policy contract, or from your insurance company or its agents.
It is important that you understand the terms used in a MHI policy. If you have any doubts about the meanings of these terms, you should ask your agent or the insurance company. As a MHI policy is a legal contract, the meanings used in the policy will apply when a claim is made.
Some of the more important terms are as follows (These are not the legal meanings. Please refer to your policy contract for the actual definitions):
- Pre-existing conditions – These are conditions or illnesses that existed before the effective date of a MHI policy, for which you are receiving treatment or have shown symptoms. It doesn’t matter whether you are aware of them or not. If you had consulted a medical doctor for any pain or discomfort, this would be regarded as a symptom of a disability.
- Overseas treatment – You may or may not be covered for treatment obtained overseas, subject to the exclusions, limitations and conditions specified in the policy contract.
- Misstatement of age – Your age is an important rating factor in your MHI policy. If you have misstated your age and the premium paid as a result is not enough, any claim payable under the policy will be pro-rated, based on the ratio of the actual premium paid to the correct premium that should have been charged.
- Qualifying/waiting period – Most MHI policies contain a waiting period for illness and disease, which means that eligibility for benefits under the policy will only start 30 days after the effective date of the policy.
- Residence overseas – If you were to live or travel out of Malaysia for more than 90 consecutive days, no benefits will be payable for medical treatment outside Malaysia.
- Free-look period – If you decide not to take up a MHI policy, you can cancel the policy by returning it to the insurance company within 15 days from the date of issue. You will be entitled to a refund of the full premium, after deducting administrative expenses incurred by the insurance company for issuing the policy. These expenses shall be RM50 or 10% of the gross premium paid, whichever is lesser.
A MHI policy also contains certain exclusions, just like other insurance policies. You must be aware what these are and if you don’t understand them, ask your agent or insurance company. Some common exclusions are the following:
- Pre-existing conditions – Conditions and illnesses experienced by you prior to applying for the policy. These conditions and illnesses would be excluded from coverage by your insurance company. You should check with your insurance company regarding the details of pre-existing conditions for the policy that you intend to buy.
- Specified illnesses – These are defined as 12 disabilities (e.g. tumours and gastritis) and their related conditions. You will not be covered for these illnesses if the illnesses have been treated or occurred during the first 12 months of your policy.
- Qualifying/waiting period – You will not be eligible for any claim arising from any medical or physical conditions within the first 30 days of the cover, except for accidental injuries.
How do I make a claim?
Making a claim can be hassle-free if you know what to do and what your responsibilities are. Some important points relating to claims are as follows:
If you are diagnosed with a disability that incurs claimable expenses, you should do the following:
The insurance company will consider reimbursing only the actual costs incurred subject to the limits of the policies.
This is an introductory guide to provide you with a better understanding of what motor insurance is and what you must know when buying motor insurance policies and making claims.
Types of motor policies
When you buy a motor vehicle, you need to buy a motor insurance. There are, however, many types of motor insurance policies available. The common types are:
- Third party cover - This policy insures you against claims for bodily injuries or deaths caused to other persons (known as the third party), as well as loss or damage to third party property caused by your vehicle.
- Third party, fire and theft cover - This policy provides insurance against claims for third party bodily injury and death, third party property loss or damage, and loss or damage to your own vehicle due to accidental fire or theft.
- Comprehensive cover - This policy provides the widest coverage, i.e. third party bodily injury and death, third party property loss or damage and loss or damage to your own vehicle due to accidental fire, theft or an accident.
A standard motor insurance will not cover certain losses, such as your own death or bodily injury due to a motor accident, your liability against claims from passengers in your vehicle (except for passengers of hired vehicles such as taxis and buses) and loss or damage arising from an act of nature, such as flood, storm and landslide. However, you may pay additional premiums to extend your policy to cover flood, landslide, landslip as well as cover your passengers. It is important to check your policy for the exclusions.
Important points to consider when buying motor insurance policies
Insured value/sum insured
If you are buying a policy against loss/damage to your vehicle, you must ensure that your vehicle is adequately insured as it will affect the amount you can claim in the event of loss/damage. For a new vehicle, the insured value will be the purchase price while for other vehicles, the insured value is the market value of the vehicle at the point you apply for the insurance policy.
- Under-insurance – If you insure your vehicle at a lower sum than its market value, you will be deemed as self-insured for the difference, i.e. in the event of loss/damage, you will only be partially compensated (up to the proportion of insurance) by your insurance company.
- Over-insurance – Should you insure your vehicle at a higher sum than its market value, the maximum compensation you will receive is the market value of the vehicle as the policy owner cannot ‘profit’ from a motor insurance claim.
Duty of disclosure
Duty of disclosure
You should disclose fully all material facts, including previous accidents (if any), modification to engines, etc. When in doubt as to whether a fact is relevant or not, it is best to ask your insurance company. If you fail to disclose any material fact, your insurance company may refuse to pay your claim or any claim made by a third party against you. In such cases, you are personally liable for such claims.
The price you pay for your motor insurance will depend on the type of policy selected. The insurance premium charged by your insurance company is the standard minimum rate in accordance with the Motor Tariff.
However, in addition to the standard minimum rate, your insurance company may impose additional premiums known as loadings to the premium payable in view of higher risk factors involved such as age of vehicle and claims experience. Loadings are governed by Bank Negara Malaysia (BNM) and no insurance company may charge loadings higher than the levels permitted by BNM.
The premium payable may be reduced if you have no-claim-discount (NCD) entitlement. NCD is a ‘reward’ scheme for you if no claim was made against your policy during the preceding 12 months of policy. Different NCD rates are applicable for different classes of vehicles. For a private car, the scale of NCD ranges from 25% to 55% as provided in the policy.
Also known as a ‘deductible’. This is the amount of loss you have to bear before your insurance company will pay for the balance of your vehicle damage claim. The types of excess applicable are as follows:
Compulsory excess of RM400 – if your vehicle is driven by a person not named in your policy or a person named in your policy who is under the age of 21, the holder of a provisional (L) driving licence or the holder of a full driving licence of less than two years.
Other excess – applicable at the discretion of your insurance company and in some cases, no excess is imposed. You can negotiate with your insurance company on this excess.
With the implementation of e-cover note in 2005, insurance companies will transit motor insurance information electronically to the Road Transport Department (RTD) and you will receive confirmation slip containing details of your motor cover as confirmation of the purchase of your motor insurance. Thereafter, within one month, you should receive:
- the Schedule which shows your name and address, details of the vehicle, the sum insured (for comprehensive and third party fire & theft policies), the period of insurance, the policy number, your NCD entitlement, premium breakdown, excess and named drivers;
- the certificate of insurance which shows your name, vehicle model, registration number and cubic capacity, period of insurance, authorised drivers and limitations of use. In some cases, this may be issued at the point of purchase in place of the cover note; and
- a motor policy which shows the terms and conditions of cover provided by your insurance company.
If you do not receive your policy within one month, you should check with your insurance company
What you should do in the event of an accident/loss
- Take notes of the accident – If you are involved in a motor accident, take notes of the accident, i.e. the names and addresses of all drivers and passengers involved, vehicle registration numbers, make and model of each vehicle involved, the drivers’ licence numbers and insurance identification as well as the names and addresses of as many witnesses as possible
- Make a police report – You are required by law to lodge a police report within 24 hours of a road accident.
- Notify your insurance company – You must notify your insurance company in writing with full details as soon as possible. Depending on the type of claim you intend to make, you may have to notify other insurance companies. If you fail to report the accident, you will be liable for your own loss as well as any third party claim against you.
- Select the workshop – You must send your damaged vehicle to a workshop approved by your insurance company. If the accident occurs during office hours, you may call the hotline/ emergency assistance numbers provided by your insurance company. Otherwise, you may call your insurance company for the nearest approved workshop. Should the accident occur outside office hours and you are making a claim against your policy, i.e. an own damage claim, you should ensure that your vehicle is towed to a workshop approved under the Persatuan Insuran Am Malaysia Approved Repairers Scheme [called a PIAM Approved Repairers Scheme (PARS)]. If you are making a third party claim, it is advisable to also send your vehicle to a PARS workshop.
Making a claim against an insurance company
When you are involved in an accident, you may either make an own damage claim or a third party claim:
Own damage claim
- This refers to making a claim on your own insurance policy, i.e. you have a comprehensive policy. However, you will lose your NCD entitlement.
- In notifying your insurance company of the accident, enquire about the names of approved workshops to send your vehicle for repair.
- Submit the fully completed Motor Accident Report Form together with all supporting documents as soon as possible to your insurance company.
- The workshop will commence repairs on your vehicle upon the approval of your insurance company.
- Upon completion of repairs, you will be informed by the workshop to collect your vehicle.
Third party claim
- You may make a third party claim if you are not the party at fault in the accident and you can retain your NCD entitlement.
- There are two ways of making a third party claim, i.e. submit the claim directly to the insurance company of the party at fault or, if you have a comprehensive policy, submit the claim to your insurance company. You are encouraged to submit your claim to your own insurance company for speedier claims processing.
- As the third party claimant, you are required to mitigate your loss i.e. you must act to minimise your loss.
- Appoint a licensed adjuster to assess the loss. The workshop or the third party insurance company may advise you on this.
- Submit the adjuster’s report and the fully completed Motor Accident Report Form together with all supporting documents as soon as possible.
- You are eligible to claim from the third party insurance company for `compensation for actual repair time’ (CART) and compensation of excess. For the actual repair time of your vehicle, this is based on the adjuster’s recommendation on the number of days required for your car to be repaired. Insurance companies, at their own discretion, may allow an additional seven working days for any unforeseen or unavoidable delay. A standard scale of daily CART has been specified by the PIAM as follows:–
Alternatively, you may also claim the cost of hiring a replacement vehicle of equivalent type and capacity for the recommended number of days of actual repair time as evidenced by a receipt from a licensed car rental company.
- After submission of the claim form, you must cooperate fully with your insurance company or its representative during the course of investigation of the theft claim.
- In view that the police and your insurance company will require time to investigate your claim, you will receive the offer of settlement from your insurance company within six months from the theft notification or upon completion of police investigations, whichever is earlier
Principle of indemnity
The principle of indemnity is crucial in insurance. Based on this principle, the insurance cover will compensate your loss by putting you back to the same position you were in immediately before the loss. As you will be compensated only for the loss suffered, you cannot ‘profit’ from a motor insurance claim. Therefore, if your vehicle is more than five years old, betterment will apply.
Betterment occurs when in the course of repairing an accident-damaged vehicle, an old part is replaced with a new franchise part. In line with the principle of indemnity, you will have to bear the difference in costs as you are in a better position after the accident with the new franchise part. However, the application of betterment is at the discretion of your insurance company. Should your insurance company apply betterment, it will be in accordance with the standard scale of betterment adopted by the industry as follows