'New for Old' insurance
When looking for home contents insurance options, you’ll likely come across the phrase ‘New for Old’ cover. But what does it mean, and how does it work? Let’s take a more detailed look at the 'New for Old' policy feature and what it means for you.
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What is New for Old insurance?
New for Old insurance provides coverage on a like-for-like basis. This means that if you make a valid claim, your insurer will cover the cost of a new model to replace the lost or damaged item. For example, if your television is stolen or damaged, you can replace it with a brand-new equivalent of similar value.
How does New for Old cover work?
New for Old insurance works by replacing your lost or damaged items with new ones of equivalent value. If you make a valid claim, your insurer will cover the cost of a new model, rather than the current depreciated value of the item. For instance, if your five-year-old television is stolen, its value would have decreased over time. However, with New for Old cover, you would receive a brand-new television of similar value to the one you originally purchased.
This differs from some other insurance policies, which may only reimburse you for the item's current market value. New for Old ensures you can replace your items with new ones, maintaining their original value.
What types of items are typically covered?
New for Old home insurance can cover:
Valuables – including jewellery, watches, and collectables
Furniture – such as beds, sofas, dining tables, and wardrobes
Appliances – including washing machines, fridges, freezers, ovens, and dishwashers
Electronics – such as mobile phones, laptops, tablets, TVs, and gaming consoles
Floor coverings – including rugs, carpets, and laminate flooring
Are there any alternatives to New for Old insurance?
Yes, there are alternatives to New for Old insurance. When you make a claim, your insurer might offer you other options such as repair or a cash settlement. The choice depends on factors like the availability of replacements and market conditions. Always check your insurance policy to understand the options available to you.
Is New for Old insurance worth it?
New for Old insurance can be a smart choice. It makes sure that if your belongings are lost, stolen, or badly damaged, you should get new replacements, or an alternative. This means you do not have to settle for a lower-quality item or pay extra money.
