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Replacement as new

Boat insurance term, area: Settlement

Replacement as new means a loss is paid at what an equivalent new item costs today, without a deduction for age or wear. The alternative is depreciation, where the insurer deducts a share for the age of the damaged part. The difference matters most for partial losses on older boats: a new sail, cover or chartplotter costs the full new price however old the item it replaces. Example: a twelve year old mainsail splits in a gale and the replacement is bought at full price.

What to check: Two questions for your own policy: are partial losses settled as new, or with a depreciation scale that grows with the age of the boat or the part? And are sails, covers and electronics treated differently from the hull?

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