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Make sure you know when you'll get new for old replacement for your belongings...
New for old? This can be a confusing area. Everyone knows that car insurance won't replace your old car with a new one in the event of write-off claim. What about when it comes to your possessions?
With the exceptions of clothing and linen that are part reimbursed because of wear and tear, Norwich Union will replace everything covered by your contents insurance policy - up to agreed single item limits - with new for old in the event of a claim. As standard: it's as simple as that.
In fact, that should be your expectation whenever you take out a contents insurance policy: good insurers know the value you place on your possessions and should reflect that in the cover given. Our advice is:
- Check your contents insurance policy for any exclusions relating to new for old.
- Read the small print and don't be afraid to ask questions.
- If you're not happy, then shop around.
- In the event of a claim, some insurers will buy the replacements for you as they can get economies of scale on bulk ordering.
- Others will simply give you a cheque that allows you to replace your items as you see fit.
A quick word on matching pairs and sets...
We talked to 1,005 contents insurance and buildings insurance policy owners in 2007.* We also looked at our policyholder data for 2005* and found that the single biggest misconception about home insurance policies of all types is "matching pairs and sets". Standard contents or buildings insurance policies will only cover the damaged item, unless it forms part of a matching pair.
This can often cause confusion where a kitchen cabinet or part of a bathroom suite is damaged. Remember, only the damaged item will be replaced new for old - not the whole suite.
* Norwich Union, Your Policy Uncovered report, January 2007
