What does "New for Old" actually mean and why do insurance premiums go up with it?

A lot of photographers get confused with the concept of "New for Old" and what it actually means. Essentially, it means that you insure your "old" camera and in the event of a total loss claim you get a "new" as a replacement BUT you need to make sure you are adequately insured to begin with so you're not out of pocket if the worst was to happen.

What does this actually mean?

Well, if you take a Canon 5D mark II as an example, you bought it new in 2011 and the body cost you £1,700. When you come to insure it this year that model may no longer be available, so you need to make sure that this year you insure it for £2,900 - the cost of a new Canon 5D mark III for example. This means that you should be reviewing your sums insured each year and if you are insured for "new for old" then you need to make sure you are insuring your camera for the cost of replacing it "as new" right now.

What happens if there is an increase in the year?

Most policies allow for an inflationary increase of some sort during the policy term as long as the price you insured for was correct at your renewal or start of the policy. This means it is wise to carefully check prices. If they "rocket" during the course of a year then you might consider calling your insurance company and putting your sums insured ( the value you have) up. It may mean a little bit of additional work when you start your insurance but it is better to do it then rather than find out you were wrong at the claim stage!

I bought my camera 2nd hand so can I insure it as new?

Yes you can! As with all policies of this type you will need to have proof of ownership in the event of a claim so keep your receipt - a retailer or ebay and make sure you insure it for new! Buy a 2nd hand Canon 5D from ebay for £500 and you should be insuring it for the £2,900 mentioned above! The other thing to be aware of is that your insurance will cover you for most risks but breakdown won't be included so make sure you have it checked out thoroughly or get a warranty or guarantee from the seller.

My insurance premium has gone down this year - good news!

Actually, it might not be! Have a look at your sums insured - is that replacement cost still correct? Has the manufacturer brought out a newer model and withdrawn the model of camera or lens you use? If so, then you should be adjusting your sum insured to make sure there is the correct value in the policy just in case. This may mean that sometimes your sums insured should go up not down like traditional policies which actually may increase your premium. Don't forget you still get NCD (no claims discount) so that the premium shouldn't jump too much unless you really put the sums insured up!

Do I need to list my equipment?

This is another thing to watch out for. Your camera might have been £995 when bought new but the replacement model is over £1,000. That would mean, on an Aaduki policy, you would need to list that piece of equipment as the replacement cost is over a thousand. Different Insurers will have different levels so it is worth checking with your insurance provider what the "individual list" level is. If you have not listed it and the replacement is more than this level then Insurers might restrict the claim payout to the listed level - in this case £1,000.

Can I insure my equipment for 2nd hand value to save on the premium?

In short yes. However, there are some insurers who will offer 2nd hand cover only so check to make sure you're getting New for old or 2nd hand from the outset. The other thing to bear in mind is that you will have to review values every year and you need to check carefully how much your 2nd hand equipment will be to replace.

Also, you should be careful - is that piece of equipment going to be around? What happens when you come to make a claim if it isn't available? What happens if it is available but significantly more expensive than the amount you insured it for? With 2nd hand values you really need to look at adjusting the price all the time which means your sum insured is going to change through the year. It also means that you could get hit with administration fees - it could end up being more expensive than the New for old option after 12 months!

Can I get advice on this?

All Insurance providers should be able to give you some advice but they are experts in insurance and not in camera values! Therefore be careful - you will know how much it will cost to replace your equipment far more than your insurance provider!

What is the most cost effective way to insure and get "New for Old"?

As with anything, it will depend on what you do! Always check out a reputable dealer to get the best price on replacement equipment and insure yours for that value. Don't always choose the cheapest - remember, that price might not be around when you come to claim and NEVER base it on any deals you might get at an exhibition - unless your claim happens at an exhibition you're unlikely to get a repeat of that "deal" again!

Carefully work out what goes "out" with you and what doesn't. If you have a lens worth £1,800 that only ever goes out when the other lens at £1,800 is in, then you don't need to insure £3,600 away from the premises if you just leave it out of your camera bag. If you are carrying the lot around with you, then insure everything and don't forget the value of the bag and all the little bits in it - just in case the whole lot goes!

It is worth reviewing your camera bag - take out things that don't get used on a regular basis that way you can insure them "premises only" which will help bring your premium down.

Be careful not to underinsure though - this could cause serious problems in the event of a claim! Remember, it is better to spend a little bit of time working out your values and sums to insure at the beginning to save any heartache if you need to claim.

Call us on 020 3633 2280 for more advice or if you have a specific question.

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