It can potentially give you the freedom to stay in numerous places across the country and travel on your own terms.
Buying your own caravan can be a big investment, not just because of the upfront costs involved but also for the ongoing maintenance, registration, storage and repair expenses that come with owning one.
So, what are your options when it comes to financially protecting your much-loved home on wheels in case it is involved in an unexpected incident like an accident on the road, or damaged by fire while at a caravan park?
What is caravan insurance?
Caravan insurance can provide a level of financial cover for accidental loss or damage to your caravan while in Australia. Depending on your policy, it may also cover theft of your caravan, or legal liability for damage to another person’s property caused by the use of your caravan.
You can typically purchase insurance to provide cover for your caravan while it is travelling on the road, when it is on-site at a caravan park, or when it is not being used for a certain period of time. Some providers may also offer cover for a trailer, camper trailer or horse float under a caravan insurance policy.
What is the difference between a caravan, camper trailer and motorhome?
What is a caravan?
A caravan is an unpowered vehicle that can be towed by a car. It often includes some basic bedding, seating, bench space, kitchen facilities, and sometimes a shower and toilet. A caravan can be plugged in to a power outlet or have it’s own battery pack or small generator to power lights, fridges or other kitchen appliances on board.
What is a camper trailer?
A camper trailer is a compact version of a caravan and can be towed by a car. When stationary, it can fold out into a small tent-like living space with a roof and walls. This space may include a bed or lounge, storage space and some basic kitchen facilities. Some insurers may offer cover for a camper trailer under a caravan insurance policy.
What is a motorhome?
A motorhome, otherwise known as a campervan or RV, is a large engine-powered vehicle, usually the size of a small truck. These vehicles often include bedding, kitchen facilities, a toilet and shower and other home style comforts. Motorhomes are usually not covered under a caravan insurance policy. There are, however, motorhome insurance policies on the market in Australia.
Do you need caravan insurance?
Caravan insurance is typically not a legal requirement in Australia. However, without caravan insurance you could leave yourself financially vulnerable for damage or loss to your caravan should an accident occur, or if it is stolen. It is worthwhile doing your homework to determine whether the cost of caravan insurance is worth it for you, bearing in mind the potential risks of going without it.
Are caravans covered by car insurance?
Provided your caravan is in a roadworthy condition and being towed by a registered car, it will be covered by your car’s compulsory third party insurance (CTP).
CTP insurance is mandatory in all Australian states and territories. It can cover your liability, and the liability of anyone else who drives your car, for injuries or death caused to others in an accident. For example, if you were to be in an accident and your caravan, while being towed, hit another car causing injury to that driver or passenger, then your CTP insurance may help cover the costs to compensate those injured.
However, CTP insurance will not cover any damage or loss caused to your property or the property of others while your caravan is being towed or while it is sitting stationary at any location. Standard car insurance also does not provide coverage for your caravan. If you need cover for damage or loss then you may want to consider caravan insurance.
While Canstar does not compare caravan insurance, we do compare comprehensive car insurance. Below is a table displaying a snapshot of car insurance policies on Canstar’s database with links to providers’ websites. Please note this table has been sorted by Star Rating (highest to lowest) and then by provider name (alphabetically) and was formulated based on a male driver aged 30-39 in New South Wales with no cover for an extra driver under 25. Check upfront with your provider and read the product disclosure statement (PDS) to confirm the details of a particular policy and whether it meets your needs before committing to it.
What can caravan insurance cover?
Coverage offered by your caravan insurance will vary depending on the policy and level of cover you choose, but in general, it may provide some financial protection for loss or damage to your caravan caused by or arising from:
- Accidental damage
- Theft or attempted theft
- Storm and flood
- Vandalism or a malicious act by a third party
- Emergency repairs, accommodation and transport
- Food spoilage
- Storage costs
- Towing costs
- Choice of repairer
- Contents up to a certain amount
- Liability cover for death or injury to another person and for loss or damage to someone else’s property.
What does it not cover?
Exclusions for caravan insurance will vary depending on your policy. Some common exclusions that may apply include loss, damage, injury or death arising from:
- Deterioration, depreciation, rust, corrosion, mold, or wear and tear of the caravan
- The lawful seizure or confiscation of your caravan or any part of it
- Acts of war or terrorism
- Faulty design, or mechanical or structural failure in the caravan
- Fusion of electric motors
- A failure to secure your caravan, or leaving it in an unsafe position
- Using your caravan for an unlawful purpose
- An intentional act by you, a family member, or a person who has your permission to use your caravan
- Pre-existing damage
- Water escaping from a shower recess or shower base
- Scorching or melting where there was no flame
Most caravan insurance providers will offer some optional benefits or extras you can add to your policy. These benefits will usually come at an additional cost to your insurance premium. Some of these benefits may include:
Some insurers will ordinarily only provide cover for your contents up to a certain amount, whereas some may not cover them at all. If you want to take out contents cover beyond what your policy offers, you may be able to purchase this through your provider as an optional benefit. You may also be able to specify particularly valuable items on your policy so you can cover them for what it would cost to repair or replace them. Keep in mind your insurer may exclude certain items from your policy such as sporting equipment, computers or cameras. Check your exclusions for details.
Lay up cover
Your provider may allow you to add cover for your caravan while it is not being used, and to do so at a reduced premium. This is known as lay up cover. This option typically allows you to maintain certain cover at a reduced premium for the months you know you will not be using your caravan. However, this cover may only apply if you keep your caravan in a safe and secure spot while it is not being used, such as a carport or lockable garage. It may also only be available for a certain period of time, such as six months. Check with your provider to see what is available.
Some providers may not cover your caravan’s annexe (if you have one) under their standard benefits for caravan insurance, or they may apply restrictions on the sorts of coverage they offer for your annexe. An annexe is usually a caravan extension made out of vinyl or canvas material with walls, windows and a roof or awning over the top of it. If it is not included in your standard benefits, your insurer may offer annexe cover as an optional extra for an additional premium.
How much does caravan insurance cost?
The cost of your caravan insurance will depend on a range of factors, including:
Type of cover you choose
Your premium will differ depending on whether you choose to cover a touring (or travelling) or an on-site caravan.
Level of cover and extras
Some providers may offer different levels of cover to choose from, such as comprehensive, third-party fire and theft or third-party property caravan insurance. Comprehensive cover will usually carry a higher premium. If you choose to take out any optional extras, this could also add to your premium.
Providers of this type of insurance may offer agreed value or market value when determining the sum insured for your caravan. Agreed value is a fixed sum you and your insurer choose for the caravan whereas market value is the amount your caravan is worth at the time of the claim. Agreed value policies tend to carry a higher premium.
The excess is the amount you agree to pay out-of-pocket when making a claim. If you choose a higher excess, this will tend to lower your premium.
Considerations when choosing caravan insurance
Before you take out caravan insurance, read the Product Disclosure Statement (PDS) of each policy thoroughly so you are aware of the terms and conditions involved, including the benefits and exclusions, and any additional excesses that may apply.
If you are buying caravan insurance from the same provider you use for other insurance policies, such as your car insurance, it could be worth checking to see if you are entitled to a multi-policy discount.
Cover image source: Philip Schubert (Shutterstock)