What is new-for-old home insurance cover?

Key takeaways

• New-for-old cover means your insurer can replace eligible damaged, lost or stolen items with new equivalents, rather than paying their second-hand value

• New-for-old cover can help protect you from depreciation, but policy limits, exclusions, excesses and single item limits will still apply

• You should make sure your contents cover reflects the full cost of replacing your belongings as new, otherwise you could still be underinsured

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 equivalent item of the same type and quality.

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.

So, if you have a five-year-old TV and it gets damaged beyond repair, a new-for-old policy means your insurer will pay out the cost of a new equivalent TV.

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 items or older models. New-for-old cover can reduce the gap between an item’s depreciated value and the cost of replacing it with a new equivalent, although policy limits, exclusions and excesses still apply.

Does new-for-old cover mean all my contents are fully covered?

Not automatically, as new-for-old cover means your insurer will settle eligible claims based on the cost of a new equivalent item, rather than the item’s second-hand value. But you still need enough contents cover overall.

If your contents are insured for less than it would cost to replace them, you could be underinsured and may not get the full amount if you claim.

Do I need new-for-old cover?

New-for-old cover can be useful because the cost of replacing your belongings with new equivalents may be much higher than their second-hand value. Whether or not you need new-for-old cover as part of your home insurance will depend on you and the items you want to protect.

MoneySuperMarket data below shows the average cost of replacing various commonly insured valuable items, so it's worth considering whether you'd be okay paying for certain items yourself:

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 insurance cover all my possessions?

New-for-old cover may apply to eligible contents such as gadgets, appliances and furniture, while high-value items such as jewellery, watches, art or bikes may need to be listed separately. Generally speaking, you should be able to include the following under new-for-old cover:

• Valuable items like jewellery

• Gadgets such as your phone or laptop

• Appliances like washing machines or fridges

• Furniture, including beds, tables and chairs

Will I get the exact same item?

Not always - new-for-old cover usually means a new equivalent item of the same type, quality and specification. If your exact model is no longer available, your insurer may offer a similar replacement, a voucher, a supplier replacement or a cash settlement.

Does new-for-old cover have any exclusions?

Your new-for-old contents insurance policy probably won’t extend to items that are considered to have a shorter lifespan compared to other home contents - such as:

• Clothing

• Bedding and linens

• Curtains

• Items already damaged before the policy started

• Items damaged by wear and tear or poor maintenance

• Items over the single item limit that haven't been listed separately

• Business or professional equipment unless covered by the policy

Do single item limits still apply?

Yes, even with new-for-old cover, your policy may still have a single item limit. If an item is worth more than that limit, such as an engagement ring, watch, bike, camera or piece of art, you’ll usually need to list it separately on your policy.

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 include new-for-old cover, your insurer may settle claims based on the item’s current value after depreciation.

You can try to add this cover to your policy, but it may not apply retrospectively, or you can also switch to a policy that does offer new-for-old cover. You can usually 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

• Finally, be sure you have proof of ownership and value for any items you're insuring, including receipts, photos, serial numbers, valuations and bank statements, to ensure your items are fully covered

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.