What Does Betterment Mean?
Betterment refers to actions or expenses that add to an asset’s value or improves its performance. It does not refer to maintenance tasks meant to retain the asset’s current value. In the context of insurance, renters of a property often purchase betterment insurance to cover the costs of improvements.
Insuranceopedia Explains Betterment
For instance, fixing a broken car window would not count as betterment, while upgrading to power windows would apply, as it would improve the car’s value.
As for betterment insurance, companies sometime need to adjust structures or make improvements on their properties to make their businesses run more efficiently. For example, a clothing vendor who rents a building may need to install brand new, high quality, large windows on its storefront to help attract customers. If the company has a betterment insurance policy, then it would cover the cost of these changes. The property owner is typically not responsible for the cost of betterments because the owner usually only insures the property itself.