Cheap caravan insurance can work out expensive

Good Samaritan caravan owners offering friends and family mates rates for cheap holidays may end up out-of-pocket if their insurance fails to cover the agreement.

It doesn’t really matter if the owner has cheap caravan insurance or a more expensive policy as a huge gulf between cover has been revealed in research by independent financial experts Defaqto.

In a detailed look at the market, the firm’s survey revealed 42 companies are offering 66 different caravan insurance policies.

But the cover they offer varies widely:

  • 12% will not cover touring caravans borrowed by family
  • 15% will cover use by family as an optional extra
  • 73% provide cover for use by family as standard
  • 57% will not offer cover for touring caravans borrowed by friends
  • 11% will cover use by friends as an optional extra
  • 32% provide cover for use by friends as standard

Defaqto’s Mike Powell said: “It would be a bitter pill to swallow if you lent your touring caravan to a friend and then found that your insurance wouldn’t pay out for any damage that happened to it. As with most insurances, it’s important to understand the coverage and limitations of your policy. If in doubt read the policy or ask your insurer or broker.”

Some key points to consider when buying caravan insurance include:

  • The maximum sum insured
  • The maximum acceptance age of a caravan
  • The standard basis how claims are settled
  • How insurers deal with malicious, flood and storm damage
  • Cover for contents in and around the caravan, including contents kept under awnings
  • How the insurer deals with alternative accommodation and travel costs if the caravan is damaged or stolen.

“It is also worth checking the policy definitions as these can vary between policies. For example, you might find that the policy definition of ‘family’ includes your aunt and uncle but not your cousin,” said Powell.

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