New For Old Replacement With Contents Insurance

ALASDAIR DUNCAN
Content Editor · 29 November 2023

When it comes to insuring your possessions, you’ll want to make sure you’re not left out of pocket when it comes to loss or damage. New for old contents insurance is one option, which can save you some headaches, but can also come at a higher cost than other kinds of contents insurance. Here are some important things to now.


Key points:

  • New for old contents insurance can replace your items with equivalent versions if they are lost or damaged.
  • If you are instead insured for the current value of your items, you may end up out of pocket.
  • The convenience of new for old insurance, however, means it comes at a higher cost.

What is new for old contents insurance coverage?

New for old contents insurance coverage, also known as replacement coverage, is a type of contents insurance that covers you for the replacement of goods that have been lost, stolen or damaged, with brand new equivalent items. It will not necessarily replace your item with a top of the line alternative, but instead will provide the closest possible equivalent of your item, if an identical one cannot be sourced.

How does new for old contents insurance cover work?

New for old contents insurance is one of two types of contents insurance cover typically offered, with the other being insurance that covers for the value of your belongings. New for old cover tends to be the more expensive of the two options, as it provides like for like replacement of your items, rather than just covering their value, which can depreciate over time.

Consider this example – say you purchased a new iPhone 14 a year ago, and it was stolen. If you have new for old contents insurance cover, then your insurer would replace it with an iPhone of the same model, as long as it could be sourced. If for some reason it could not, then your insurer would have to provide you with the nearest possible replacement.

If you instead have contents insurance that covers for the value of your belongings, then you’ll be covered for the value of your phone at the time it was stolen. Items you’ve bought can depreciate in value over time, and this means that the money you may receive from your insurance may be less than it would cost to replace your phone, leaving you out of pocket.

What are the pros and cons of new for old contents insurance?

If you’re considering home and contents insurance with new for old cover, then it’s important to weigh up the various considerations to decide if it’s suitable for your particular needs and circumstances.

Potential benefits of new for old contents insurance

  • Protection from depreciation: As mentioned, the value of your items can depreciate over time, so with new for old insurance, you will receive an equivalent replacement for your item without the concern that you will be out of pocket.
  • Potential to save time: With new for old cover, you will not need to go searching for an item for less than what you paid originally to avoid being out of pocket.

Potential drawbacks of new and old contents insurance

  • Higher premiums: It’s worth keeping in mind that you will likely have to pay higher premiums for the convenience of having your items replaced like for like.
  • No coverage for accidental damage: It’s important to read the fine print when taking out an insurance policy, as some contents insurance will not cover for accidental damage. This means that if the kids spill chocolate on the couch, you may not be covered for a replacement.

Ultimately, the question of what sort of contents insurance to opt for may come down to whether you have any specific, high value items you want replaced in the event of loss or damage, and are happy to pay higher premiums, or whether you would be happy to pay a potentially lower cost for insurance, and are happy to be covered for the current value of your items only.

If you’re trying to decide, you can compare home and contents insurance with Canstar to get a sense of what’s on offer. It’s also important to consider that home insurance (which covers the structure of your home itself) and contents insurance (which covers your belongings) are separate products, but are typically sold as a bundle for a combined discount.

Cover image source: encierro/Shutterstock.com


This content was reviewed by Editor-in-Chief Nina Rinella as part of our fact-checking process.


Alasdair Duncan is Canstar's Content Editor, specialising in home loans, property and lifestyle topics. He has written more than 500 articles for Canstar and his work is widely referenced by other publishers and media outlets, including Yahoo FinanceThe New DailyThe Motley Fool and Sky News. He has featured as a guest author for property website homely.com.au.

In his more than 15 years working in the media, Alasdair has written for a broad range of publications. Before joining Canstar, he was a News Editor at Pedestrian.TV, part of Australia’s leading youth media group. His work has also appeared on ABC News, Junkee, Rolling Stone, Kotaku, the Sydney Star Observer and The Brag. He has a Bachelor of Laws (Honours) and a Bachelor of Arts with a major in Journalism from the University of Queensland.

When he is not writing about finance for Canstar, Alasdair can probably be found at the beach with his two dogs or listening to podcasts about pop music. You can follow Alasdair on LinkedIn.


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