New for Old definition
New for Old cover: Again, this means that no deductions are made in respect of wear and tear, deprecation, etc. This term is more generally used with household and marine hull policies.
New for Old condition means:
New for Old means (continued):
Examples of New for Old in a sentence
Reinstatement is basically New for Old, but not better than when the item was new.
All caravans must be insured on a reinstatement basis (New for Old) including reinstatement cover in the event of flood.
We recommend you take out a New for Old policy or Specified Value policy for those items.
More Definitions of New for Old
New for Old replacement value for lost or damaged goods.
New for Old means that your insurer will replace your lost or damaged belongings with new items of the same type and quality as the originals, or they will pay you the amount it would cost them to replace the items.
New for Old. The concept of ‘New for Old’ cover is sometimes misunderstood and there is often the view that it leads to higher claims settlements. However, it may not be to the extent you might think. The insurer only pays for a new replacement item if the original is a total loss. If an item is damaged and can be economi- cally repaired insurers will choose that option which is no different from how Indemnity insurance works. Even in the event of a total loss, if specialist items are involved such as works of art or antique items(in other words items which cannot be replaced like for like) then whether the cover is arranged on an Indemnity or New for Old basis is irrelevant. Consider, for example, an original oil painting. The difference is, however, that customers are accustomed to seeing ‘New for Old’ cover on their Household insurance policies and they have come to expect it and want it. On a New for Old basis the customer has to provide a new replacement value instead of a second hand or indemnity value when effecting the insurance. This means the sum insured is naturally higher which generates additional premium and, consequently, more income for you. Importantly, the cover is what the consumer wants. • The customer – they getter better quality insurance protection • The business – • you are less likely to have complaints and disputes due to reductions in the expected claims settlements to reflect age and wear and tear. The customer won’t take into account the basis of cover. They will just be unhappy and complain. • You improve your insurance related income