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New for old deduction

Boat insurance term, area: Settlement

When a repair puts a new part in place of an old one, the boat is worth more afterwards than before. Many hull wordings deduct an amount for that gain, usually on a scale that grows with the age of the item. Sails, covers, upholstery, electronics and engines are the parts most often affected. Example: a twelve year old genoa splits in a squall. The bill buys a new sail that will last far longer than the old one, and depending on the wording part of that bill stays with the owner.

What to check: Does your hull wording apply a new for old deduction to partial damage, and does a scale by age of the item appear in the policy schedule? Ask which parts it reaches: sails, covers, upholstery, electronics and the engine are the usual candidates.

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