Does the contents insurance pay out the daily value or the new-for-old value?
In case of damage to your belongings, you are entitled to a compensation of the new value, but there are exceptions. When do you receive the new value and when the current value?
In the event of damage to your belongings, you want a payment from the contents insurance that allows you to buy back the damaged or stolen goods. For the payment, it makes a big difference whether the insurer assumes the current value or the new value. The current market value is the value of an object just before the damage occurred. For example, you have a television set six months old. When new, the television cost €1,000, but when sold it will only fetch €700. This is the current value, but in practice it remains to be seen whether you can buy a replacement for this amount. The new value is €1,000, at least if the television still costs €1,000 new.
Insurers assume the repair costs
If there is a burn in the floor covering, the contents insurance policy does not immediately renew everything. If it is cheaper to repair the damage, the insurer will pay the repair costs. Only when the repair costs exceed the value will the insurer pay the value. In case the insurer assumes the current value in the event of damage, the repair costs are paid, unless they are higher than the current value.
When will the insurer pay out the current value?
Insurers have different provisions on this. In the policy conditions of the household contents insurance you will find the stipulations about the new value and the current market value. The current value is often paid out if the current value is less than 40% of the new value. So if a couch is only worth €200 and the new value is €1,000, the household contents insurance will usually pay out the current value of €200. The insurer determines the current value on the basis of depreciation lists. For example, a sofa is depreciated in 10 years, so each year the value decreases by 10% according to the insurer. As soon as the couch is older than 6 years, the value drops below 40% and the maximum paid is the current value. The insurer can also adjust the payment to the current market value in the following cases:
- If the items are no longer used for their intended purpose. For example, a chair stored in the attic
- Damage to boats and trailers (e.g. stored in the garage)
- Damage to awnings and antennae
- Items you have borrowed
How much do you write off on your contents according to the contents insurance?
More and more insurers publish the depreciation lists they use. These lists show the current value of certain parts of your household effects. A cupboard, for example, depreciates over ten years. So a four-year-old cupboard still has a value of 60% of the new value. If the cupboard is lost in a fire, you will still be paid the new value. This may be different if the cupboard is left unused in the attic.
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