Whether you are a first-time caravan buyer, or have owned your home from home for years, choosing the right insurance for your lifestyle can be confusing. Taking time to make sure you have the right cover in place for your individual needs can give you confidence you are protected, meaning you can continue to relax and make memories.
When it comes to taking out your insurance policy you need to consider both the value of your caravan and its replacement, as well as the impact this will have on your lifestyle. In this article we explore the options available when taking out caravan cover, and how they determine the settlement you would receive in the event of an insured total loss claim, and the premium of your insurance.
For static caravan insurance you may have the option to choose between Market Value and New for Old cover depending on the age of your caravan, but what does this mean and how do you know which is right for you?
This type of cover means that your caravan will be insured for its re-sale value in the open market at the time of loss, taking into consideration make, model, age, and any wear and tear amongst other rating factors. Insured total loss claims are usually settled on a cash settlement basis and will therefore enable you to replace your caravan with one of a similar age and condition to your own prior to the claim.
It is important to remember when setting your sum insured (value of your caravan, outbuildings or decking) that you need to consider what it would be worth if you were to try and sell it in its current condition.
If you opt for this type of cover it means that, should you have an insured total loss claim on your insurance, your settlement would be for a new caravan of a similar, if not the same, make and model as the one you have insured.
Whether this cover is available to you will depend on the age of your caravan, for example, at Towergate Insurance it is available for touring caravans up to 10 years old and static caravans up to 20 years old. Therefore if you have purchased a brand-new caravan or your static caravan is a newer model, this option may be more suitable for you as you would get a brand-new equivalent replacement rather than settling on a market value amount, which means you could only replace with a pre-owned, older caravan.
For this type of cover it is important to ensure that your selected sum insured (including the value of your caravan, outbuildings or decking) reflects the cost of a brand-new equivalent replacement as opposed to your original purchase cost.
As New for Old cover enables you to replace your caravan with a brand-new equivalent model it is important to review your sum insured every year to avoid underinsurance. You may also find that some insurers increase your sum insured automatically every year to account for inflation. This is called index linking, and although it does provide some protection against underinsurance, it is only an average calculation. Because of this you may find that your premium increases year on year at renewal in line with your replacement value increasing.
As Market Value covers you to replace your caravan with one of a similar age and condition as your current caravan at the time of the loss, you will find that premiums for this type of cover tend to be lower. However, it is also advisable to review the amount insured in line with the market value of your caravan every year at renewal to ensure you are adequately insured.
Once you have decided which type of cover best suits your caravan it’s also important to consider your contents. We recommend you check your policy documents to confirm the basis of cover for these. Keeping an up-to-date inventory is a handy way of keeping track of all your possessions and any new purchases when it comes to reviewing the value of your contents.
With all insurance decisions, it is important that you consider your own personal circumstances when it comes to deciding on what level of cover best suits your needs and lifestyle as every situation is unique to the individual.
You can find out more about static caravan insurance from Towergate here or you can call us on 0344 728 0162 to speak to one of our dedicated and specialist advisers.
This is a marketing article by Towergate Insurance
Date: July 02, 2023