When damage occurs during a rental and an insurance claim is submitted, RVezy's claims team reviews the cost of repairs and determines how much of the loss is eligible for coverage. In some cases, betterment may be applied to your claim to reflect the depreciation of the part(s) being replaced. Depreciation reflects the natural wear and tear or aging of certain parts and helps our team calculate a fair settlement. Understanding why betterment is used can help you know what to expect during the claim process
What depreciation means
Depreciation is the reduction in value that happens as an item ages or is used over time. Many RV components, especially those that wear down through regular use, lose value gradually. When these parts need repair or replacement, our team considers their age and expected lifespan when assessing the claim amount.
Understanding actual cash value
The basis of settlement for any physical damage is actual cash value (ACV). The value of the loss or the damage will be based on the RV's ACV at the time of the loss.
ACV is determined by attributing depreciation to the parts requiring replacement. Depreciation is calculated by considering the age and condition of the part(s) prior to the loss, with the intent of returning the RV to the same financial position it was in prior to the loss.
In the event of a total loss of an RV, the determination of a total loss and the ACV of the RV will be determined by our partner insurer / appraiser.
When betterment applies
Replacing a worn part with a new part results in betterment. In the event of an insurance claim, the host will be expected to contribute financially to the betterment of their RV in the event of a repair with new replacement parts. In line with industry standards, they will be responsible to pay the price difference between the depreciated (existing) parts and the new replacement parts.
RVezy calculates betterment to the new replacement parts based on the year of your RV. The starting year for betterment is 2 years prior to the current year, meaning an RV from 2023 currently would not have any betterment applied. On the other hand, an RV from 2020 would have 15% betterment applied (3 years x 5%).
How betterment affects your claim
If betterment is applied, the reimbursable amount for certain parts or materials will be reduced. This means the final approved cost may be lower than the repair's shop estimate, and the difference will be the host's responsibility. The claims advisor reviews each situation individually to determine whether betterment is appropriate.
If betterment is applied to your claim and you're unsure why, you can always ask your claims advisor for clarification. They can explain which parts were depreciated and how the calculation was made.
For any questions or concerns, please contact our support team.