A basis for property insurance on e.g., household contents when the insurer agrees to pay the replacement cost of property lost or destroyed, without a deduction for depreciation. (02) Sec.69 of MIA 1963 allows insurers to deduct a reasonable amount from any claim for cost of repairs (usually terms thirds) to allow for betterment enjoyed by the assured. However, NEW FOR OLD clause states “Claims payable without deduction new for old.” Thus, Hull insurers waive their right to such deductions from claims. However, Average adjusters are not permitted to waive the deductions where a ship is older than 15 years of age.
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Purchasing new parts to replace old or damaged parts instead of repairing the old ones.