New for old Caravan Insurance

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What is New for old static caravan insurance

Caravans and motorhomes are major leisure investments and if treated with care can last a lifetime and then some. This is especially true if you only use your caravan or motorhome for family vacations a few times per year. A 5-year-old caravan is not the same as a 5-year-old car which can be picked up for a song, it most likely is still as viable as the day it was bought new and in some cases can actually be worth more if you have added upmarket modifications. Owning a caravan is very much like owning a house, if your house was destroyed, you would expect your insurance cover to be able to rebuild your house to the same standards.    

When it comes to caravan insurance, some provider will offer 2 options :

  • New for Old Cover – What this means is that if your caravan or campervan is stolen or damaged beyond repair, you will be entitled to receive a like-for-like new replacement cost.
  • Market Value Cover – In this scenario, you will only be entitled to the current market value should your precious caravan be stolen or consider a right off.

What is market value?

All campervans and caravans will lose value over time. The market value is the second hand price that you would need to pay to a dealer to replace your caravan with a similar, equivalent priced model. If you have spent additional money on upgrades etc, it is important to agree the correct market value with the caravan insurance company, so that you will not lose out should it need to be replaced if stolen or damaged beyond repair.

What's the difference between market value & new for old?

The difference is best explained with an example purchase, let's say you buy a new campervan or static caravan for the retail price of £20,000. 

If 5 years later the static caravan was written off and the market value has dropped to £10,000, that is the amount the insurance company would pay out. Now, this should buy you a 5-year-old caravan or motorhome.  With a new for old cover caravan insurance policy, the insurance company would have to pay out the replacement cost to enable you to replace your caravan with a brand new equivalent make of campervan.    

Obviously, the new for old cover is the more attractive, but it will come with a much higher insurance premium. In addition, this type of cover is normally only offered to vehicles under 5 years old and in the luxury price bracket. New for old cover can be purchased for both static caravans and touring caravans.  

What is the Sum Insured?

Sum insured is the maximum amount that your insurance policy will pay out. Again, let's look at an example, if you have a caravan with a sum assured mount of £10,000. In the event of a fire with damage estimated at £1,000 the insurance company will pay £1,000 less the policy excess.  

Had the fire caused a complete right off, the insurance company would pay out £10,000. For this reason, it is important that you check the amount insured on an annual basis to make sure it is a true reflection of the costs to replace your caravan for a similarly aged caravan.

Did you Know?  Glass’s Caravan Guide provides a comprehensive guide on residual values for new and used  touring caravans, static caravans, motorhomes and campervans.

What is the key difference between new for old and market value?

The key difference is a new for old caravan insurance policy will cost more than a market value policy.  The new for old policy has more benefits than a standard market value policy. However, most insurance companies will place age limits and other limitations on new for old caravan cover. 

Check Annually on your Static Caravan's value

If you have a market value static caravan policy, it is important that the sum insured reflects the market value required to replace your caravan should the need arise. 

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