The Meaning of "New for Old" in a Contents Insurance Policy
Home contents insurance policies are commonly held by homeowners in order to protect their property from damage or theft. Unfortunately, homeowners often aren’t well-versed in exactly what these policies are designed to do. Contents insurance is typically optional on many lower-cost insurance policies, and is often used as a rider on more all-encompassing structure insurance policies that protect the building infrastructure. Of course, contents insurance covers basically everything in the home that can be picked up and moved to another location outside the structure. These policies typically come in two types, new for old or indemnity. In a new for old policy, the insurance company will shoulder the cost of having a damaged item repaired to like-new condition or if an item is stolen, the company will pay outright for a replacement. These policies can be costly if not purchased from an agent or company who specializes in them, and it’s vitally important that anyone seeking a “new for old” insurance policy ensure that their contents insurance policy is structure to contain that language. If seeking such a policy, simply asking a well-versed agent is typically enough to convince them that the client is knowledgeable enough to warrant discussing it in-depth.