Six in 10 travel insurance policies don’t have ‘new for old’ cover if you lose valuables
>
Beware of travel insurance wording that can leave you out of pocket for lost valuables – as six out of 10 policies don’t cover ‘new for old’
- More than half of travel insurance policies do not pay the full replacement price of an item
- This common practice can trip up unwary vacationers making a claim
- Finding this out often means checking the fine print of your insurance deal
Vacationers booking travel should be aware that they may not have money for lost valuables and luggage if they don’t have the right travel insurance.
Six of the top ten travel insurance policies analyzed by This Is Money fail to cover the full cost of replacing lost items with brand new equivalents, which insurers refer to as “new for old.” Instead, many deals pay out for what the insurer sees as the current value of the lost item.
New for old means that your insurer will give you the value equal to that of a lost or stolen item, or you will get a brand new one, no matter how old the missing item is. In other words, wear and tear and depreciation are not included in the insurance payment.
Please check the wording of your travel insurance policy carefully to see what is and what is not covered
So, for example, if a traveler buys a bag for £200 and it is stolen on holiday two years later, they will get a new bag of the same quality when they make a claim.
Without new-for-old cover, the travel insurer can pay a fraction of that amount, as they say the two-year-old bag is now used and worth less than £200.
Charity Citizens Advice said: ‘An insurer may refuse to pay all or part of your claim because your cover is not replacing new for old. Insurers may pay out less than you claim due to wear and tear on your belongings.’
| Insurer | Policy name | Premium | New for old included? |
|---|---|---|---|
| Admiral | Standard | £6 | No |
| Ergo | Element | £6.04 | Yes – if the item is less than a year old |
| Cover | Standard | £6.34 | No |
| Admiral | Gold | £6.49 | No |
| Cover | Bronze | £6.90 | No |
| Start traveling | Essential single | £7.41 | Yes – if the item is less than a year old |
| Cover | Silver plus | £7.55 | No |
| Admiral | Platinum | £7.57 | No |
| Ergo | To protect | £8.25 | Yes – if the item is less than a year old |
| insure.com | Economy | £8.26 | Yes |
| Cheapest 10 travel insurance policies for a one-way trip, 9/2/2023 | |||
Insurers do have to indicate whether a particular travel insurance policy includes a new for an old cover, but that information is often difficult to find and you have to dig through the fine print of your policy schedule.
For example, the standard wording of Admiral’s one-way travel insurance states: ‘If your claim is successful, we will decide how to reimburse you. This can be paying for the cost of replacement, cost of repair or a cash payment. This is not a new for old policy and no payment will exceed the original purchase price.’
Other travel insurance policies place a time or money limit on new coverage for old coverage.
For example, Ergo Element travel coverage pays new for old, but only if the lost or stolen item is less than a year old.
This Is Money looked at a sample list of the 10 cheapest travel insurance policies for a solo traveler staying in France for a week. The nine cheapest policies had no new-for-old coverage.
According to the latest figures from the Association of British Insurers, travel insurers paid £250 million in claims in 2020.
Of this, £148 million was compensation for canceled travel and £63 million for emergency medical treatment abroad.