Insurance Depreciation

PRS2026

Hi. Any help on this appreciated-
We have claimed on my daughters insurance for her laptop which she split water on! 
All going fine till we had a bill from the insurers for £384, I was expecting to pay £100 excess. Having spoken to them it seems we have to 'pay' for the deprecation. We will receive a new laptop 2022, which is what she had. This is worth £699, reducing the claim cost to £489 with deprecation.
I argued that this value of £699 is already the deprecated value, but they say it is the new value and therefore they deprecate this. 
I am completely baffled, is this right?? Many thanks

Ayr_Rage

Unless you have "new for old" cover on any insurance you will only get the current estimated value.

The depreciation they have estimated seems very fair for a laptop that is over 3 years old.

PRS2026

Thank you, that is helpful 

Woodstok2000

Yours is a used laptop, so will have depreciated significantly.  Seems like they are valuing yours at £415 (£699 - 384 + 100), that looks generous for a 3.5 year old machine

MyRealNameToo

PRS2026 said:

Hi. Any help on this appreciated-
We have claimed on my daughters insurance for her laptop which she split water on! 
All going fine till we had a bill from the insurers for £384, I was expecting to pay £100 excess. Having spoken to them it seems we have to 'pay' for the deprecation. We will receive a new laptop 2022, which is what she had. This is worth £699, reducing the claim cost to £489 with deprecation.
I argued that this value of £699 is already the deprecated value, but they say it is the new value and therefore they deprecate this. 
I am completely baffled, is this right?? Many thanks

Is this Home insurance or Gadget or ? 

To indemnify you, which is the traditional type of insurance, they would pay you what she could have sold it for the moment before the water landed on it less your excess. 

Home insurance these days is often written on a new for old basis and so instead of paying you what the old one was worth they pay you what a new one would cost (less the excess)

Some Gadget/Mobile contracts operate in a middle ground where they pay you what a reconditioned item would cost so a little more than what your old one would be but not brand new either. 

As insurers can get big discounts because of the volumes they buy most these days wont pay cash but instead will provide a replacement and if you insist on cash then its based on what their supplier would have charged them rather than the retail price. 

Ultimately you need to read your policybook, gadget insurance is more commonly not on a new for old basis than Home.

PRS2026

MyRealNameToo said:

PRS2026 said:

Hi. Any help on this appreciated-
We have claimed on my daughters insurance for her laptop which she split water on! 
All going fine till we had a bill from the insurers for £384, I was expecting to pay £100 excess. Having spoken to them it seems we have to 'pay' for the deprecation. We will receive a new laptop 2022, which is what she had. This is worth £699, reducing the claim cost to £489 with deprecation.
I argued that this value of £699 is already the deprecated value, but they say it is the new value and therefore they deprecate this. 
I am completely baffled, is this right?? Many thanks

Is this Home insurance or Gadget or ? 

To indemnify you, which is the traditional type of insurance, they would pay you what she could have sold it for the moment before the water landed on it less your excess. 

Home insurance these days is often written on a new for old basis and so instead of paying you what the old one was worth they pay you what a new one would cost (less the excess)

Some Gadget/Mobile contracts operate in a middle ground where they pay you what a reconditioned item would cost so a little more than what your old one would be but not brand new either. 

As insurers can get big discounts because of the volumes they buy most these days wont pay cash but instead will provide a replacement and if you insist on cash then its based on what their supplier would have charged them rather than the retail price. 

Ultimately you need to read your policybook, gadget insurance is more commonly not on a new for old basis than Home.

It was home insurance. I had thought the deprecation was getting a new older version 2022 laptop and we would just pay the excess of £100. This is the wording form the policy, that I have misunderstood! 

 Where we will take off an amount for wear and tear and depreciation. The amount deducted will be calculated

as follows:

Age of item Amount deducted from replacement price

Under 12 months None

12 – 24 months 20%

25 – 36 months 30%

37 – 48 months 40%

49+ months 50%

MyRealNameToo

I would expect there to be more to the overall clause, even new for old policies tend to have a depreciation clause but its only applied to clothing. 

Most home insurance is new for old but not all, if you are buying the cheapest you can find on an aggregator like confused.com your chances of getting non-new for old are higher.

dunstonh

MyRealNameToo said:

I would expect there to be more to the overall clause, even new for old policies tend to have a depreciation clause but its only applied to clothing. 

Most home insurance is new for old but not all, if you are buying the cheapest you can find on an aggregator like confused.com your chances of getting non-new for old are higher.

Technology items effectively have a depreciation element, even if new-for-old.

For example, a laptop from years ago may have been top of the range with the latest and greatest processor, when purchased new.   Whereas today, that same or comparable processor and spec is lower or mid-range and therefore cheaper to replace.      So, a high-end laptop years ago may have cost £1k+, but today, that same or similar spec may cost £400.   

It is still new for old as it's like for like (or close as can be), but the monetary amount has significantly dropped from when new.

MyRealNameToo

dunstonh said:

MyRealNameToo said:

I would expect there to be more to the overall clause, even new for old policies tend to have a depreciation clause but its only applied to clothing. 

Most home insurance is new for old but not all, if you are buying the cheapest you can find on an aggregator like confused.com your chances of getting non-new for old are higher.

Technology items effectively have a depreciation element, even if new-for-old.

For example, a laptop from years ago may have been top of the range with the latest and greatest processor, when purchased new.   Whereas today, that same or comparable processor and spec is lower or mid-range and therefore cheaper to replace.      So, a high-end laptop years ago may have cost £1k+, but today, that same or similar spec may cost £400.   

It is still new for old as it's like for like (or close as can be), but the monetary amount has significantly dropped from when new.

Not really depreciation but change in market price but thats not what's happened here, they have an identical replacement and it's cheaper than it was when they originally bought it but they are required to contribute towards it beyond the excess. 

Per the table shared earlier if something is over 4 years old they will only pay 50% of the cost of the replacement and so in your example that £1,000 laptop can be today replaced by a £400 but with this depreciation clause the insurer will only pay £200 if over 4 years old.