Caravan insurance companies have two things in common with each other:
- they have to make a profit to survive;
- they need to manage their overall exposure to risk.
Purchasing risk sharing
In a sense, when you purchase a caravan insurance policy, you are paying the insurance company to take on a large chunk of the financial risk that arises as a result of owning a caravan.
They charge you for doing so – and that’s called the premium (ie. the price you pay).
However, the insurance company must understand the nature of the risk they’re taking on and seek to constrain it within the terms of their policy.
That policy constitutes an agreement between you and the insurance company and it defines the duties, responsibilities and limitations of both parties with respect to the caravan insurance concerned.
If something relating to your caravan is therefore not as defined in the policy and related documents, the insurance provider isn’t in control of the risk and this may result in problems making a claim.
That’s why it’s important to take the time to read the specification and cover detail (including the exclusions) of a policy before purchasing it.
And these other specifics may be something that caravan insurance brokers can help you with, if you so require.
Caravan insurance companies and prices
As a very general rule, the lower the risk profile as perceived by the insurance company, the lower your premium price will tend to be (proportionally speaking).
So, it may be very important to you to:
- ensure that your caravan and it’s usage patterns (eg. using it outside of the UK) are clearly and correctly outlined as part of the caravan insurance application processes;
- do what you can to reduce the caravan insurance provider’s perceptions of risk in accordance with their guidance.
Reducing risk may often entail things such as:
- using additional locks and security devices (some of these may be a formal requirement of being accepted under cover);
- not parking tourers on public roads when not in use;
- using only approved campsites;
- avoiding young drivers on the policy;
- being a member of an owners’ or caravanning association.
Caravan insurance companies will typically have varying degrees of what constitutes risk reduction. Finding out what these are and then configuring your use of your caravan to take those into account, may yield you financial benefits through more attractively-priced premiums.