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Home Insurance Claims - Replacements
(New For Old)

Most policies (but not all of them) will provide for replacement (contents) or reinstatement (buildings).

Buildings claims generally do not provide much problem here. The vast majority of buildings claims involve repairs to the property and reinstatement means repairing with new parts - which is what you would expect. It could be a problem with a major claim where part or all of the structure has to be demolished and rebuilt.

It is with contents claims that the issues usually arise. Your policy says that if it can't be repaired it will be replaced (within certain restrictions - see policy cover). Insurers like to arrange replacement for you via their supplier. This enables them to buy goods in bulk at wholesale prices and thereby save a lot of money. They do not like it where you want to replace the item or ask for cash instead.

In the first of these, your policy does not restrict replacement to that provided by the insurer and if you want to go out and buy the item yourself, you are entitled to do so. But you will need to pay for it, obtain a receipt and send this to the insurer for reimbursement. If you buy something that is better or upgrade, then you have to pay the cost of the upgrade yourself.

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Where your insurer is arranging replacement and you want to upgrade, talk to them. They will usually accommodate this by asking their supplier to charge the additional cost of the upgrade to you. You will benefit from the discounts your insurers enjoy.

Where you want cash, insurers will now restrict this to 'indemnity' settlement, not 'new for old' . They will deduct wear and tear. But if the item was only a few months old, or of a nature that does not depreciate much (e.g. jewellery) it might be worth your while seeking a cash settlement if that is what you want. Beware, however, that your insurer might regard a request for cash settlement as a fraud indicator.


"When I saw I could not avoid a collision I stepped on the gas and crashed into the other car."
Extracts taken from actual claim forms submitted to
a number of UK car insurance companies