Is Betterment Deduction Allowed in Property Damage Claim?

Our insured has a business auto policy and a claim arose recently wherein an employee backed a covered auto into a parking lot light pole. The pole had to be replaced and the BAP insurer paid the claim but deducted a betterment charge. The insurer only paid for ninety percent of the cost to replace the pole and light. We think that the insured has liability to repair or replace the pole and light and the insurer should cover the whole amount. What is your opinion?

Arkansas Subscriber

The BAP liability coverage is for all sums an insured legally must pay as damages because of BI or PD. “All sums” means exactly that, “all sums”. There is no provision in the auto policy to deduct betterment or anything else from a property damage liability claim. Whatever amount the insured is legally liable for is the amount the insurer has agreed to pay, subject of course to the limit of insurance for liability coverage shown in the declarations. The insurer owes for the entire cost to replace the pole and light.