Simple English definitions for legal terms
Read a random definition: new drug
Definition: Deduction for new, also known as new-for-old, is a principle used in marine insurance to adjust a partial loss. It means that the value of old materials is deducted from the total repair expenses, and then one-third of the cost of repairs is charged against the insured shipowner. This principle also applies to damages, where a party is entitled to recover only the amount necessary to restore the property to its original condition, instead of acquiring a new item to replace an old and depreciated one.
Deduction for new refers to the principle that old materials apply towards payment of the new in marine insurance. In case of a partial marine-insurance loss, the value of old materials is deducted from the total repair expenses. From the remaining balance, one-third of the cost of repairs is deducted and charged against the insured shipowner. This principle is also known as new-for-old.
The above examples illustrate how the principle of deduction for new applies in different scenarios. In marine insurance, the insurer deducts the value of old materials from the repair expenses, and then charges the insured for one-third of the remaining cost of repairs. In the case of a damaged car, the owner can only recover the amount necessary to restore the car to its pre-accident condition, instead of acquiring a new car.