I have recently been burgled. My insurance policy is "new-for-old". What does this mean exactly?.?

Question

For example, a sony digital camera was stolen which was bought for 300 pounds, approx. 5 years ago. It was a high-end model 'at the time'. The insurance company want to replace it with a similar spec camera which is the entry level today. Camera technology evolves so quickly that they become dated very quickly. The equivalent 'high-end' sony camera today is approx. 400 pounds.
What can i do? (I also had a 6yr old hp latop stolen - bought for 2000pounds. Same spec. laptop today - 600pounds. Is this 'like-for-like'? Is there a difference between 'like-for-like' and 'new-for-old' policies?)

Answer 1

The earlier answer is right - I think you're upset because (as well as having been burgled - my sympathies, incidentally) you feel hard done by because you paid out loads for something which can now be got much cheaper.

"New for old" is actually a big improvement over what insurance companies used to do, which was to reimburse the SELLING price for your goods - and (I think you'll admit) that the selling price for your old camera and laptop would have been next to nothing. They'd have only reimbursed you how much it would cost you to buy a second-hand 5-year-old camera etc.

Basically you'll be getting all your goods back, but new ones, except of course it won't be top-of-the-market, because the market has changed. An insurance policy which replaces top-end goods from the past with top-end goods from the present doesn't exist, unfortunately.

Answer 2

The previous answers are correct. You do not get a new top of the line item because when you bought it 5 years ago it was top of the line. The way insurance works is they are responsible for putting you back where you were before the loss. That means replacing with the same specs as the one you had before. Unfortunately with electronics prices drop rapidly and technology is outdated by the time it hits the shelf.

Why should you get belongings that are better and more updated than the ones you owned?

If they made people better off then they were before the loss think of the increase in fraud there would be. You could claim theft just to get all of your electronics updated.

If you want to update to new electronics see if they will pay you for the like product and you pay out of pocket to update to newer technology. They might do that for you.

Answer 3

Go back a number of years and there were two types of contents insurance you could purchase from many insurance companies. They were:

Reinstatement (new-for-old)
Indemnity

Indemnity policies (not new-for-old) have been pretty much removed from the marketplace in favour of reinstatement (new-for-old) policies now.

New-for-old simply means that you will not have deductions made from your claim for 'wear and tear'.

For example, back in the day when we had indemity policies, a claim for, say, a television would go something like this:

Replacement Value: £300
Item was 5 years ago. Give a TV, say, a 10 year life expectancy.
You'd get paid £150

But, as mentioned, you've got a new-for-old/reinstatement policy so you won't lose 'wear & tear' deductions.

Answer 4

Hi - what your insurance company are offering is standard in a New For Old policy. I was bitten by exactly the same "catch" some years ago.

It does actually make sense. Let's say you had a 1Megapixel camera. They'll replace it with a new 1 megapixel camera. You're no worse off and no better off - the insurance has done exactly what it's supposed to and left you in the same situation as you were prior to the burglary.

If they were to replace the camera with a 10 megapixel one, that would be "betterment", and few insurers would offer that.

Answer 5

Your insurance company will offer you replacements to match what you have lost...if your model is no longer available they will offer an alternative with the same specifications no matter how much more it costs now than when you first bought it ....most insurance companies will let you know what they are offering and then ask you to check each model out before agreeing to accept what has been offered ...if the replacement is not up to the same specs as the lost one then you have the chance to say no i want something better...but you must do this before they deliver them.

Answer 6

It's like for like, but NEW items, instead of second hand. It's NOT for "top of the line" or "state of the art". So if you have something state of the art like a camera, state of the art 20 years ago, well, you'll get like features, on a brand new one - you DON'T get digital for film, for example.

Answer 7

what it says on the tin....check the details of your policy

Answer 8

damn dude that sucks