How Much Should my Static Caravan be Insured For?
Buying a holiday caravan is a significant investment requiring the protection and peace of mind provided by Static Caravan Insurance. In the unfortunate event that your holiday home is destroyed, how do you avoid being underinsured? How much should you insure your caravan holiday home for? There are a number of factors to consider, not least the cost of any debris removal and re-siting of a replacement. In response to these concerns, Shield Total Insurance have provided some essential advice to ensure that both your sum insured is adequate and the basis of your Static Caravan Insurance cover is appropriate to your needs.
Before any replacement holiday home can be sited, the remains of the destroyed home have to be removed. There are strict environmental rules governing the way this happens. The cost of debris removal in accordance with the regulations can be high and varies depending on local charges (normally between 2, 000 and 5, 000 depending on the area).
When you look at holiday home manufacturer's literature remember the prices quoted are likely to be "ex works". "Sited prices" can be considerably more as you have the delivery charge for transporting any replacement or new holiday home to the holiday caravan park. There will be also be a further charge to install your holiday home on your pitch and connect it to the mains services such as water and electricity. Don't forget any park owner's sales commission which can add more than 30% to the manufacturer's price.
Your park owner should be able to confirm the likely cost for debris removal, delivery charges, re-siting costs and any additional charges they make.
Most insurers offer two types of cover: new for old (also known as reinstatement) or market value (known as indemnity), but for older units, the option is often limited to market value.
With new for old it is essential that you insure for the cost of a brand new replacement or nearest equivalent i.e. the new cost as supplied to you by your park owner or the manufacturer (whichever is greater). To this you need to add an allowance for any site clearance, debris removal, delivery and re-siting necessary in the event of a total loss. You should also add the new cost of any outbuildings, extensions and other structural additions e.g. verandas, decking and balcony steps.
With market value, the structure of your holiday home should be insured for the cost of a used replacement of the same age and condition taking account of wear, tear and depreciation. Again make an allowance for site clearance, debris removal, delivery and re-siting costs. For any outbuildings or other structural improvements apply their market value.
It is important that you allow for an adequate sum insured to avoid the possibility of any underinsurance penalty applying (sometimes referred to as average). If your holiday home's sum insured doesn't represent the full cost of replacement, the insurer will only pay the same proportion of the loss or damage as the sum insured bears to the full replacement cost.
If you need further guidance your insurer should have a Glass's Guide to Caravan Values which details both trade and retail current values of standard UK produced holiday homes.
Click here for a competitive online static caravan insurance quote from Shield Total Insurance, one of UK's fastest growing providers of park home, lodge and holiday caravan insurance.
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