Waterkampioen watersport magazine

New to old.

You are insured so that you don’t have to pay others you harm and get paid for harm you yourself suffer. Simple, right? Sometimes determining that damage is less simple, as Mr. Van Woerden experienced in his dispute about the policy clause ‘deduction new for old’.

The law says: “When the same event results in an advantage for the injured party, next to damage, then, as far as this is reasonable, this advantage has to be taken into account when determining the damage to be compensated.” This is the so-called indemnity principle: the party causing the loss does not have to pay out more than the amount of the loss actually suffered. Thus, an insured may not clearly benefit as a result of an indemnity payment.

The court described it this way: in principle, there is a right to deduct repair costs in proportion to the age of the item in relation to its expected lifetime. So it is set up as a kind of depreciation system and it looks at how old the item was when it became damaged or had to be replaced and what the realistic remaining life span was. Therefore, it pays to be critical and ask the insurer how the calculation was arrived at. There are also some insurers who do not apply any deduction for new for old and who simply pay out the new value of a pole, for example.

Labor costs.
But now Mr. Van Woerden: through a carelessness he suffers paint damage to his motor yacht. He reports his damage to the insurer, who then sends an expert to assess the damage. This expert reports that the paint damage must be repaired by sanding, priming, filling, pre-painting and repainting the starboard side of the hull. The cost – labor including materials – he puts at 1,500 euros. Without any explanation, the surveyor then applied a deduction of 40 percent for the new paint system and arrived at a deduction of €600.

This was too much for Mr. Van Woerden. He rightly observed that although the policy conditions refer to repair costs, they also state that the deduction new for old only applies to materials and not to labour costs. Upon inquiry, Van Woerden learned that the report assumed €160 for material costs and €1,340 for labor costs. Van Woerden felt that only €64 should be deducted, namely 40 per cent of the cost of materials and not €600. Van Woerden turned to KiFid (the complaints institute for insurers) and was proven right. The insurer retraced its steps, acknowledged its mistake and paid out the remaining amount of €536.

What does this teach us?
Check your policy for what it includes about the “deduction new for old. We all know that it is the expensive hourly wage that adds up the most to a claim, so it is important that you are aware that no deduction can be made from this. This is also not unreasonable. Whether you are installing an old or a new mast, the work remains the same. This does not benefit you as the injured party and you should therefore not be disadvantaged by this. Mr. Van Woerden was very careful and did not allow himself to be led astray, and he paid for it. Incidentally, the insurer in question has now made things even worse. It has removed the new-for-old distinction between labor and material costs from its policy conditions, which puts you on the wrong track as an insured and makes it harder to see what you are entitled to. So where there are calls for transparency throughout the industry, this company chooses the opposite path, that of fine print for the sake of profit.

Learn more or download old articles: https://www.anwb.nl/kampioen/algemeen/digitaal-archief


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