Contents insurance - can I insist on new-for-old?

elfinabout

Hi all,


I'd be very grateful for any advice. We have contents insurance with Virgin. We have a computer (a PowerMac G5) that died spectacularly (and quite understandably) when it was forced to drink a large glass of Merlot via the front grille.

Yes - very careless, entirely my fault, and I nearly cried. It went straight down to our local Apple Authorised Service Provider, who have assessed it and provided a quote for repair. It's absolutely trashed, and virtually everything needs replacing.

The quote for repair totals £1967 inc. VAT. We have already paid a "bench fee" of £175 from that total for assessment (including quote).

Upon phoning Virgin to make a claim, I must admit it was quick and painless - and they agreed to pay for the repair.

However - I've looked online at the equivalent, current machine. The basic Mac Pro (the replacement for the PowerMac G5) will set you back £1749 inc. VAT. So:

1. The machine is getting on a bit now, and a new one would be preferable (naturally);
2. The repair quote actually suggests replacement by my insurers, due to the "prohibitive cost of repair";
3. A new machine would be over £200 cheaper;
4. Repair would probably take longer than replacement;
5. Virgins' online contents insurance FAQs say "It’s all covered on a new-for-old basis except bicycles, clothes and linen";

My obvious question at this point is - do I have the right to insist upon a new, equivalent replacement? Or the right to insist on a cash settlement of the current value of the G5, to put towards a new Mac Pro?

Thanks in advance for any advice you can give,


James

iceicebaby

Depends on the terms and conditions of your policy.

elfinabout

Hi Ice,

That's the thing - while the FAQs point to a "new-for-old" system, the policy wording is ambiguous (naturally):

==============================================
F – Basis of Claims settlement
1 For any one item of Contents or part of a set or suite lost or damaged We will at Our option:
a) pay the cost of replacing the item or part as new,
b) replace the item or part as new,
c) pay the cost of repairing the item or part, or
d) make a cash payment which will be the price We could have replaced it for using Our own suppliers.
==============================================

Which seems to leave that decision to them - which is what I'd expect. But it seems totally irrational to me to repair it, given the circumstances. I'd like to know, before I speak to them, where I stand on arguing this. We'd be happier with a replacement, and they'd save money!

iceicebaby

Normally they will offer the one thats the most cost effective for them (suprise suprise!) so if its cheaper to give u the cash rather than to source a new one if you see what i mean

Maximumtime

The underlying principle of any insurance policy is indemnity. Quite simply put this means the insurance company will undertake to put the insured person bak in the position they were prior to the loss.

For arguements sake you had a Apple Mac with specification A.
The insurance company will only reimburse you to give you back this specification. They will not put you back in a better position even though specification A is no longer availbalew and they are apple have now passed Spec A B and C and selling Specification D (understandably computers develop quite quickly)

The claims handler in this case may be applying the policy wording to the strictest letter even if it does cost them a few quid more. Despite the fact you I and the rest of the world think it would be better to go with the new unit especailly when its cheaper.

You could try and ask the cliams handler to save himself the few quid and look good to his boss by saving a few quid. However, this may backfire as he may look on the net and price your current unit in some far flunged corner of the net at a cheaper price. Im not too up on pc's so youll know yourself better then I would.

Not sure its of any help but good luck with it all.

mattymoo

Had it been a PC then I suspect you would have got your wish as most insurers have supplier agreements in place and can source new machines quite cheaply.

This practice seems to go out the window with Macs for some reason and the insurers seem to think everything must go to Apple and they must pay Apple prices.

[Deleted User]

Hi James

Have you asked your insurer if they are able to do this for you? It may be that they will give you a cash settlement - sometimes you just need to ask!

Becca

elfinabout

Hi everyone,


Thanks for all your advice - I plan to call them today and ask if they are able to do what we want. Can't hurt, can it?

I'll post my results here.