most consumers assume the phrase 'new for old' cover to mean just that but we have talked to a number of people who found that phrase was not what they expected when they made a claim.
Hertfordshire (PRWEB UK) 25 January 2013
The UK’s leading gap insurance specialist car2cover.co.uk today urged motor insurers to provide a clear and transparent definition of what the phrase ‘new for old’ means, as their experience and research revealed it might not be what the consumer believes it to be.
Elaine Scott , speaking for car2cover said, “most consumers assume the phrase ‘new for old’ cover to mean just that but we have talked to a number of people who found that phrase was not what they expected when they made a claim.”
For the most part, insurance terms and conditions are confusing and contain ‘insurance jargon’ and the consumer often resorts to trust rather than question or challenge what appear to be misleading phrases.
“We found a good number of major branded insurers had very different definitions of ‘new for old’ cover, for example; One major insurer stated that if the insured vehicle was written off as a result of theft, they would not pay new for old replacement value, they would revert to market value. Another major insurer confirmed that they would honor their new for old commitment, providing they could provide a replacement vehicle within a 4 week period. If they could not, – they too would only pay the market value at time of write off. Other insurers were also found to have variations where their new for old cover excluded; factory fitted options, dealer fitted accessories, paint and upholstery treatments, delivery charges, number plates etc” confirmed Scott.
Clearly, the consumer should request a written definition of the insurers ‘new for old’ cover before entering into insurance with them as the policy could leave them hundreds if not thousands of pounds short when they make a claim.
“Whilst Gap Insurance can only be purchased within 180 days of taking delivery of their vehicle, customers can defer the start date their gap insurance policy by up to a year - if they are happy their insurer is providing a true new for old policy in the first year. So, it’s vitally important they ask their motor insurer for written confirmation that the policy will perform as they expect in the first year of ownership” advised car2cover.
Motor insurers are required by the FSA to Treat Customers Fairly and as this report has identified, fully defining the phrase ‘new for old’ would be one small step in that direction.
If motorists want to hear more about this and how it can affect their decision to defer their gap insurance policy, car2cover have prepared a short video on their website http://www.car2covertv.co.uk
To provide customers with a wider access to information about these risks and how gap insurance might help, car2cover have launched a new web site http://www.car2covertv.co.uk where over 45 short, 3 -4 minute video clips, together with video transcripts are freely available to view. Car2cover also offer free telephone help on 01438 728959.