What is new-for-old home insurance cover?

Key takeaways

• New-for-old cover replaces your home contents with new items of the same type

• The alternative is indemnity cover, which only pays out the current market value

• Most home insurance policies include new-for-old cover as standard

What is new-for-old home insurance cover?

New-for-old home contents insurance replaces items that have been lost, stolen, or damaged beyond repair with a new object of the same value.

Most home insurance policies will include it as standard, but check your policy documents to be sure.

How does new-for-old cover work?

If you have new-for-old contents insurance, it will pay out enough for you to replace any items you’re claiming for with new ones of the same type. If the exact item is no longer available, you should receive enough for you to buy a similar item.

If your insurance does not have new-for-old cover, your insurer will only pay you the current market value of any lost, damaged or stolen items, i.e. how much you could have sold it for.

Many home items, from furniture to electronics, depreciate (go down in value) quickly because people prefer not to buy used item or older models. New-for-old cover means you won't be out of pocket because your contents has significantly depreciated since you first bought it.

What is indemnity cover?

Indemnity cover, sometimes also known as a wear and tear policy, is an alternative to new-for-old cover - it means your home's contents are insured for their current value.

This will take into account the item’s depreciation from age as well as wear and tear. For example, if you claim for a dishwasher that is four years old, you will be given enough cash to buy a four-year-old machine.

You may disagree with your insurer about the current value of your items in the event of a claim. So you don't lose out financially, if you have indemnity cover it's worth compiling proof of the current value of your home contents, particularly when it comes to any high-value items such as jewellery or art.

You can also take out other insurance policies to more comprehensively cover your most precious belongings, such as gadget insurance and bicycle insurance.

Will new-for-old home cover insurance all my possessions?

New-for-old home insurance will usually cover the following items:

• Valuable items like jewellery

• Gadgets such as your phone or laptop

• Appliances like washing machines or fridges

• Furniture, including beds, tables and chairs

Does new-for-old cover have any exclusions?

Your new-for-old contents insurance policy probably won’t extend to items like clothing, bedding and curtains. These are considered to have a shorter lifespan compared to other home contents.

How do I know if my policy provides new-for-old cover?

If you’re unsure whether or not your home contents policy offers new-for-old cover, the best way to find out is to check your policy. The policy documents you were sent by your insurer should specify whether you have cover on a new-for-old basis or if you have indemnity cover.

Most policies offer new-for-old as standard – although you might be given the option to pay less by reducing the level of cover provided.

What happens if my policy doesn’t include new-for-old cover?

If your policy doesn't give you the cover you want, you can switch to a policy that does. You can switch home insurance midway through a policy, but you'll probably have to pay a cancellation fee. Otherwise, you can switch at your annual renewal date.

Comparing quotes from multiple providers is the best way to find a good-value deal with the cover you want.

What should I look out for when taking out new-for-old cover?

If you’re thinking about taking out new-for-old cover, keep the following in mind:

• When you make an insurance claim, you might be offered a cash payment or a like-for-like replacement. This can depend on what the cost of replacing the item would be through certain suppliers that the insurer prefers

• If you are able to claim for clothing or linens, it’s likely that a wear-and-tear deduction will be made. This may also happen for claims on personal belongings that aren’t yours unless you’re legally or financially responsible for the cost of replacing them (for example if you’re renting the item)

• New-for-old cover won’t automatically extend to full pairs or sets of items if one of them is lost or damaged, even if the replacement item can’t be exactly matched. However, if you have high-value home insurance then this might include cover for sets or pairs

• It’s important to have the right amount of cover in place for your insurer to pay out the full amount of replacing an item. For example, if your policy covers you for an item at the price you bought it, but it’s actually gone up in value, you’ll need to update this with your insurer to claim for the full amount of replacing it

Where can I buy new-for-old insurance?

Most home insurance policies include new-for-old cover as standard. MoneySuperMarket can help you compare different policies by price and what they include.

To help you get the best quote for your home insurance, we need to know certain details, including the value of your home contents and the level of cover you want. Once we have the information we need, we will then show you a list of competitive quotes that meet your requirements. So, all you have to do is pick the one that offers the best deal for you and click through to the provider to finalise your purchase.