The Importance of New for Old for Your Park Home

When it comes to arranging the insurance for your Park Home and Contents, the importance of ensuring you secure cover on a New for Old basis cannot be overstated. This article explains why this is important and provides you with some tips when choosing which insurance is the right one for you.

What does an Insurance mean when it says ‘New for Old’ cover?

If an insurance says it covers your property on a “New for Old”, or “replacement as new”, basis this means that in the event of the property in question being damaged beyond economical repair by an event for which you are insured, the property will be replaced with its brand new equivalent. To be considered “beyond economical repair”, the cost of repairing the property would need to exceed the cost of replacing it as new.

What about Additional Costs which arise?

Of course it’s not as simple as picking up the existing home and putting another in its place. For starters, the need for a park home to be replaced will usually be the result of some catastrophic event – most likely a fire, although there are other situations where the home may need to be replaced even though it might seem capable of being repaired.

Surely it takes times to remove an old home, obtain a new one and have it sited. What happens while I am waiting for this?

While it is not something that you ever want to happen to you, if you imagine a fire at your home it is regrettably often the case that the park home will be damaged to the extent that it is immediately no longer habitable. As well as picking up the cost of removing the debris, purchasing a new park home and having it sited, you will need somewhere to live in the meantime. With the relatively limited number of new park homes being manufactured during the course of a year, and the fact that most already in production will already have been allocated to a particular site or customer, it can take many months for the replacement park home to be sited for you.

You should therefore ensure that your insurance will pay for the cost of you living elsewhere – this is often referred to as Alternative Accommodation – be it a hotel (often for the immediate days / weeks after the event), a nearby house, or a rented park home if one is available. The cover for Alternative Accommodation needs to be relatively generous to cover several months; at PBIS our policies allow for up to 20% of the combined Park Home and Contents Sums Insured which, in the case of our Select policy, could be up to £133,000. If you are a dog or cat owner, it’s also worth checking that kennelling and/or cattery costs will be included if you are unable to keep pets at the temporary accommodation you are provided.

Is New for Old universally offered?

Unfortunately no. Some insurance providers might say they cannot give this important cover for your Park Home if it is over a certain age so always be sure to ask for confirmation. Even if your insurance is currently on  a New for Old basis, this may not be the case when it comes up for renewal as your Park Home may have then reached an age where your provider no longer provides this valuable cover. Over time, some providers may have a change of Insurer that underwrites their policy and this could result in a change in their rules – this has certainly been evident within the market recently. Such a critical change in the cover you are being provided should be made very clear to you when your provider invites renewal but it never hurts to check for sure.

Good News from Paul Baker Insurance Services!

Since our business started almost 10 years ago, we have always taken the view that the owner of an older Park Home – as long as it has been well maintained – should have access to the same level of cover as the owner of a brand-new Park Home. This means that we will offer New for Old cover irrespective of the age of your Park Home. When you first approach us for cover, we will likely ask a few additional questions and request photos to demonstrate the home remains in good order but, subject to this, you will have the security of knowing that your home will be replaced as new in the event of a total loss. Of course there will always be the odd exception – the most likely being if the Park Home is up for sale where even our policies revert to a “market value” or Indemnity basis.