Finance glossary
New-for-Old
In simple terms
New-for-old cover replaces a lost or damaged item with a brand-new equivalent, without deducting for age or wear — so you are not left out of pocket for depreciation.
On this page
What does new-for-old mean?
New-for-old is a way of settling claims where the insurer pays to replace an item with a brand-new one of similar specification, rather than paying its depreciated (indemnity) value.
It is common on contents insurance but not universal, and some categories — such as clothing and linen — are often excluded.
How new-for-old works
When you claim for a covered item, the insurer provides or pays for a new replacement, subject to your excess and sum insured. You do not lose out because the item was old.
Premiums for new-for-old cover can be a little higher than indemnity cover, reflecting the more generous payout.
How could this affect me?
New-for-old gives more certainty that you can actually replace what you lost, which many people find worth the extra cost. Check for exceptions, as some items may still be settled on an indemnity basis.
Always confirm the basis of cover and any excluded categories before relying on it.
Things to watch out for
- Some items (often clothing and linen) may still be settled indemnity-style.
- Your excess and sum insured still apply.
- New-for-old usually costs a little more in premium.
General information, not personal advice
Consumer Credit is an independent information service. We do not provide regulated financial advice or sell financial products. For advice on your own situation, speak to an appropriately authorised firm or a free service such as MoneyHelper. About Consumer Credit.
Sources
We checked this page against these official and authoritative sources.
- ABI, Choosing home insurance (opens in a new tab). Accessed 22 Aug 2026.