A basis of cover where the insurer pays the cost of replacing the insured item with a similar but new item. Also, referred to as “Replacement as New” or “New for Old” and contrasts with “the principle of indemnity.” Also a new policy underwritten to take the place of one currently in force.
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A policy written to take the place of an existing policy.
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UK: An option when an insurer settles a laim under a contract of indemnity. The goods supplied must be equivalent to the lost goods in nature and quality. If in a superior condition betterment applies. Insurers may gain by getting discounts on replacement goods. Replacing goods rather than paying cash discourages fraud. ‘New for old’ policies modify the principle of indemnity.
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US: The substitution of health insurance coverage from one policy contract to another.
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MEDICAL,USA: To replace insurance coverage under one health insurance policy for coverage under another policy.
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Where an insurer agrees to replace irreparably damaged or stolen goods with goods of a similar type and quality under a contract of indemnity instead of paying a cash sum to the insured.