When purchasing homeowners insurance, property owners often have a variety of choices when it comes to insuring possessions. One choice of coverage is new-for-old insurance.
The highest level of protection for possessions is possible with new-for-old contents insurance. By owning new-for-old coverage, possessions will be replaced with new versions of the damaged items in the event of a fire, flood, or other disaster of in the case of victimization from theft. New-for-old insurance covers most objects that can be moved from your home, such as furniture, drapery, carpets, appliances and electronic equipment. Other items that can be included are jewelry, watches, clothing and other personal items.
Other types of possession insurance include deductions for wear and tear of items, but new-for-old contents insurance replaces old, damaged possessions with brand new versions. If the item is no longer made, insured parties receive a replacement that is comparable to the damaged or stolen item.
Premiums for new for old insurance policies are typically more expensive than other policies, but the extra expense may be worth the added benefits of getting brand new items in the event of a disaster or break in. Consider the value of possessions and if the difference in the cost of premiums is worth it. If there are not many high value items in a home, it may not be worth the extra expense to have new-for-old coverage.
Insured persons must have an inventory of all of the household items to be insured including a description of the item, purchase price, date of purchase and serial number. It is also advised to take photos or video of high-value items to document their condition. Along with the items in a house, also remember to include tools and equipment in the garage, shed or old china and silver that may be stored in an attic. The more detailed and accurate an inventory is, the more smoothly an insurance claim should be processed. Claim could be delayed or denied if the estimate of value of your possessions is inaccurate. Proof of ownership is supported by providing photos and video evidence of the items to be insured.
By making an inventory of belongings, it is easier to see what items are owned, and what they are worth. Without an inventory, insured persons may forget about some items and be under-insured.
Before purchasing the policy, confirm what the maximum amount of coverage is provided. In the case of expensive belongings such as cameras, computers, jewelry and other items, an additional policy to adequately cover these items may be necessary. The premium will be higher for this additional coverage, but then the items will be adequately insured in the event they are destroyed or stolen.
New-for-old insurance coverage may be worth the extra premiums. This is because it assures property owners of adequate insurance. More specifically, this type of insurance serves the purpose of replacing possessions from disasters or calamities outlined within the insurance contract.