Betterment & Depreciation Estimator
When you rebuild after an incident, the policy pays to restore what you had — not to upgrade it. The betterment (improvements you make while rebuilding) and any depreciation on the damaged assets come out of your pocket, on top of the retention. Model the shortfall before you assume a rebuild is fully covered. Transparent arithmetic on your numbers; not insurance advice.
What this estimator does
- A policy pays to restore what you had, not to upgrade it — the betterment (improvements made while rebuilding) and any depreciation on damaged assets come out of your pocket.
- Enter your rebuild cost, the upgrade portion, a depreciation percentage (if cover is actual-cash-value) and your retention, and see likely-covered vs self-funded.
- Transparent arithmetic on your own figures — nothing fabricated, nothing uploaded.
- Illustrative model, not insurance advice.
Why this matters
After an incident, the sensible thing is to rebuild better — and the policy quietly declines to pay for the "better" part. Between betterment (the upgrades) and depreciation (if your cover is actual-cash-value), a rebuild that feels fully insured can leave a real shortfall on top of the retention. Teams discover this mid-recovery, when the cash matters most.
Modelling it in advance lets you do two concrete things: move to replacement-cost cover to kill the depreciation deduction, and budget separately for the security improvements you will make during recovery. Educational model, not insurance advice.
Frequently asked questions
What is betterment in an insurance claim?
Betterment is the portion of a repair or rebuild that leaves you better off than before the loss — an upgrade rather than a like-for-like restoration. Insurance is designed to indemnify (put you back where you were), not to fund improvements, so the betterment portion is typically excluded. In cyber this bites constantly: after a ransomware event you rarely rebuild the exact same environment — you take the chance to add EDR, segment the network, modernise servers. Those upgrades are betterment, and the policy generally will not pay for them even though the incident triggered the spend. Budget for them separately.
What is the difference between replacement cost and actual cash value?
Replacement-cost cover pays what it costs to replace the asset today, with no deduction for age or wear. Actual-cash-value (ACV) cover pays replacement cost minus depreciation — so a five-year-old server is reimbursed at its depreciated value, not the cost of a new one, leaving you to fund the gap. For data-restoration and systems cover, confirm which basis applies; ACV can produce a meaningful shortfall on older hardware, and moving to replacement-cost cover removes the depreciation deduction entirely.
Does cyber insurance pay to make my systems more secure after an attack?
Generally no. The restoration cover pays to return systems to their pre-incident state, not to improve their security posture. The hardening you (rightly) do during recovery — adding MFA, EDR, segmentation, newer platforms — is betterment and usually falls to you. This is not a loophole to resent; it is how indemnity works. The practical takeaway is to plan and budget for post-incident improvement as a separate line, and not to assume the policy will underwrite your security upgrade program.
Are these numbers real?
No — every figure is one you enter. The tool only does transparent arithmetic on your inputs to show how betterment, depreciation and your retention carve down a rebuild, so you can see the likely self-funded portion. It is an educational model, not insurance advice; confirm your policy’s valuation basis (replacement cost vs actual cash value) and how it treats improvements with your broker.
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