meaning of replacement cover

[DanielZ]

In chapter 3 :

For the solution to question 3.13, with respect to buildings insurance, indemnity cover is defined as "the insurer compensates the insured for the value of items as at the date of the loss" whereas replacement cover is defined as "the insurer pays for new replacement items".

However with respect to moveable property insurance, on pg 23 it defines replacement value to be "the cost of a new item reduced to allow for the depreciation on the lost item" and "new for old" basis as "the cost of an equivalent brand new item"

It seems that the term "replacement" is used differently for these 2 types of insurance. Am I understanding it correctly?

Thanks
Dan

 

[Geraldine]

In chapter 3 :

For the solution to question 3.13, with respect to buildings insurance, indemnity cover is defined as "the insurer compensates the insured for the value of items as at the date of the loss" whereas replacement cover is defined as "the insurer pays for new replacement items".

However with respect to moveable property insurance, on pg 23 it defines replacement value to be "the cost of a new item reduced to allow for the depreciation on the lost item" and "new for old" basis as "the cost of an equivalent brand new item"

It seems that the term "replacement" is used differently for these 2 types of insurance. Am I understanding it correctly?

Thanks
Dan

Have you just started reading? I think I'm going to start reading from Monday Enough time? What's holding me back a lot of the time is wondering whether I passed CA1 Doubt it to be honest. But you never know right? If I start this now and then fail CA1, I'll be tempted to revisit CA1 and so this ST8 reading will feel like it's been a waste of time! Oh, if only our marks came out sooner! Why DO they take so long? It's crazy I wonder if there are other professions which take this long to get you your results. Every time someone asks me when my results are out they're invariably shocked that it takes so long. Make s me think this is an actuarial thing!

(Apologies for not answering your question! )

 

[antzlck]

Have you just started reading? I think I'm going to start reading from Monday Enough time? What's holding me back a lot of the time is wondering whether I passed CA1 Doubt it to be honest. But you never know right? If I start this now and then fail CA1, I'll be tempted to revisit CA1 and so this ST8 reading will feel like it's been a waste of time! Oh, if only our marks came out sooner! Why DO they take so long? It's crazy I wonder if there are other professions which take this long to get you your results. Every time someone asks me when my results are out they're invariably shocked that it takes so long. Make s me think this is an actuarial thing!

(Apologies for not answering your question! )

I took my first exam in April and was recently thinking to myself how quick results day has approached/ is approaching. I dont have any complaints in this regard. GCSEs and A Levels both took 2 months to get results.

 

[Katherine Young]

Your understanding is correct Dan. The term "replacement value" needs to be considered in context.

For example, look at the definition of "indemnity, principle of" in the Glossary, and you'll see the Core Reading clearly describes "replacement value" as "new-for-old". But look on page 23 of Chapter 3 and you'll see it means "indemnity basis".

 

[DanielZ]

Thanks Katherine!

Geraldine, yes I have just started reading. I'm also waiting for my CA1 results. I wouldn't wait for the results to come out before starting - it definitely wouldn't be wasted time, even if you have to take CA1 again.