Clause 14: New for Old

“Claims payable without deduction new for old.”

A contract of marine insurance is a contract of indemnity and as such, underwriters will not be liable for costs of betterment to the vessel, ref MIA section 1.

When the vessel is damaged through the operation of insured perils and new parts replace old parts that have either been lost or damaged, it could be argued that there is an element of betterment.

However, Cl. 14 provides for a practical approach, eliminating any difficulties in calculating an appropriate deduction due to notional improvements and claims are to be payable without being subject to “new for old” deductions.


The same principle applies as under the ITCH, though not specifically stated. 

According to Cl.12-1, sub-clause 1, the vessel shall be “restored to the condition it was prior to the occurrence of the damage”.

Cl. 12-1 sub-clause 3 specifies that if the repairs result in any “special advantages for the assured because the ship has been strengthened or the equipment improved”, deductions shall be made for the additional costs thereby incurred.


It follows from the commentary that replacing a worn part with a new part does not qualify as a “special advantage” hence insurers are not entitled to make “new for old” deductions in the compensation.






For further information, contact:

Viggo Thomas Kristensen
Phone: +47 23 08 65 54