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.
How does new for old cover work?
New for old insurance cover basically works on a like-for-like basis. What this means is that if you make a valid claim, your insurer may cover the cost of a new model to replace it. So, if you have a television stolen or damaged, you may be able to replace it with a brand new equivalent of similar value.
This is instead of being provided the cost of what that television might be worth now. If that television is five years old, its value and price would have depreciated over the years since you purchased it.
The chances are, that if your television had been valued at the time it was damaged or stolen, it would be worth less than you paid for it. With some insurance policies, you may only get back up to what it was worth when it was stolen. This is where new for old is different: it could cover the cost of a brand new television to the same value as your old one when you first bought it.
RAC Home Insurance includes new for old cover, so in the event of you making a valid claim, we could replace stolen, damaged or lost items with a like-for-like item that’s brand new. Some limitations and exclusions might apply, so read your policy documents for more details.
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