When offering monetary compensation for a damaged item we apply this formula:

Current Market Value x Level of Damage = Compensation Offered *

Here’s an example
Current Market Value: $800
Minor Cosmetic Damage: 25%
Compensation offered: $800 x 25% = $200

Damage Ratings

We assess photos of relevant damage and assign the level of damage into one of the following categories.

Category	Description	Percent of Current Market Value
Damaged beyond use	The damage renders the item unable to function e.g. an electric appliance no longer turns on.	100%
Major cosmetic damage	Cosmetic damage that is both large and obvious during normal use, e.g. a large dent on the front of an otherwise dent-free refrigerator.	50%
Minor cosmetic damage	Cosmetic damage that is either: minor & visible during normal use, e.g. a minor dent to the front of a fridge major but not generally visible during normal use e.g. a large scratch to the side of a fridge.	25%

Note, where both minor and major cosmetic damage have occurred to the same item we apply the major damage category.

Current Market Value

We apply the following methodology when determining the current market value of an item.

New Items

If an item is less than 12 months old at the time of damage we use the lower of

1. The purchase price of the item
2. The price offered for sale and delivery of an identical new item by a reputable retailer.

Second Hand Market Value

Where an item is greater than 12 months old at the time of damage we review online listings in the second hand market for an identical or near identical item to determine value. Where possible we seek to find three such identical items and use an average price.

Straight Line Depreciation Method

Where we cannot reasonably identify an identical or near identical item in the second hand market we apply a straight line deprecation method as follows:

1. Electrical items: 5 years (or 20% depreciation per year)
2. Non Electrical items: 10 years (or 10% depreciation per year).

Straight Line Depreciation Example:
A couch purchased for $1,000 new, 4 years ago
Depreciation = 10% per year x 4 years = 40%
Current Market Value = $1,000 - ($1,000 x 40%) = $600

Please note, we apply the second hand market value in preference to the straight line depreciation method whenever possible.

Exemptions and Limitations apply

Please note, as outlined in our Terms & Conditions, a number of items are exempt from any accidental damage claims.

In addition the the maximum total value of any claim is capped based on the service level purchased as follows:

• $0 - Basic level service
• $1,000 - Premium level service (this is our default)
• $5,000 - Elite level service

* Total compensation is limited based on the Exemptions and Limitations listed above.