247SimpleTests
Insurance · General

What is 'betterment' in property claim adjustment?

Correct answer

A deduction from the settlement when a repair or replacement upgrades property beyond its pre-loss condition

  1. A A bonus paid to the insured for filing a claim
  2. B A deduction from the settlement when a repair or replacement upgrades property beyond its pre-loss condition
  3. C A type of property endorsement
  4. D Extra coverage for improvements

Why this is the answer

Betterment (also called 'improvement' or 'upgrade reduction') is applied when repairs or replacement result in better property than existed before the loss. The insurer is only obligated to restore the insured to their pre-loss condition — not to improve it. The insured pays the betterment portion.
Source: Adjuster Exam, Betterment

Practice more questions

This question is from our Insurance License Practice Tests practice test. Take the full practice test to test your knowledge across all General and other topics.

Take the Insurance Adjuster practice test →

New to this exam? Our Insurance exam guide explains the format, scoring, and how to prepare.

Related questions

General

An insured has replacement cost coverage. A 5-year-old roof is destroyed. A new roof costs $15,000. What is the Actual Cash Value (ACV)?

State-specific guides

Need information for your state? Our state guides cover local requirements, fees, and what to expect on exam day.

California Texas Florida New York Pennsylvania Illinois Ohio Georgia

Recommended study materials

Study guide

Life & Health Insurance License Exam Manual (Kaplan)

Kaplan's comprehensive life and health producer licensing prep with chapter quizzes and full practice exams.

Check Price → Study guide

Property & Casualty Insurance License Exam Manual (Kaplan)

Personal and commercial lines, policy structure, and state law concepts for P&C producer licensing.

Check Price → Study guide

Insurance Adjuster Licensing Exam Prep (Xcel Solutions)

State adjuster exam prep covering policy interpretation, investigation, valuation, and claims handling.

Check Price →

As an Amazon Associate, CJ Affiliate, and AWIN publisher we earn from qualifying purchases. Links above are affiliate links. Full disclosure →