When you’re planning your trip the last thing you want to think about is the campervan insurance. Then when you start getting hit with large security deposits, daily fees that can double the cost of hire and the risk of paying out thousands in case of an accident … well it can start to weigh on your mind a little. In this article we’ll explain how campervan hire insurance works as well as giving you some tips to avoid unnecessary high charges by using third party campervan hire excess insurance while still having adequate cover.
All campervan hire in Australia comes with insurance usually known as standard liability. However, depending on the specifics of the hire agreement there will be a large Accident Liability that you will be responsible for if any damage occurs to the vehicle. With the main campervan companies this ranges between $2500 to $7500. So if you hire a hitop from Britz and sign up to their standard Accident Liability of $7500 then if someone crashes in to you or you reverse in to a pole you’ll be out of the pocket by a maximum of $7500. In fact, when your hire with them they make you put down a security deposit of $7500. This is debited to your credit card and only refunded after safe return of the vehicle. If there is any damage they’ll just deduct the cost from the deposit. I’m just using Britz as a convenient example here – all the campervan rental companies have similar policies but the amounts differ.
High security deposits don’t just mean you risk losing some cash if there is an accident. Many of the hire companies charge a non-refundable 2.5% processing fee on Mastercard and Visa and 4.5% on American Express on the full amount. If you’re from overseas you’ll probably be hit by exchange rates charges as well.
Wow, that’s a lot! How can I reduce it?
Campervan hire companies always offer liability reduction options. This does two things – it limits your liability in case of damage and it reduces the security deposit you have to put down. For instance, the rack rate for a Hitop Camper rental from Britz is $75 a day. They offer three insurance options with this. You can either take no insurance at all. Then you need to put down the huge $7500 security deposit and risk losing it. Or you can pay $29 a day and reduce the deposit and accident liability to $2500. Or you can pay $45 a day and reduce your accident liability to nil (in the event of an accident you pay nothing) and the deposit to a token $220.
Campervan rental companies also often excludes windscreens and tyres from the normal insurance but they do offer an optional extra insurance, with fee attached, to cover this. A lot of the third party campervan insurance policies already cover this with no extra charge.
So you can reduce the cost of an accident by a lot but it means your hire costs go up by a lot. If you do choose the insurance offered by your campervan hire firm then you will have complete peace of mind. You will know that are covered in case of an accident. It is very expensive though and there are much cheaper ways of achieving the same coverage by using third party travel insurance.
Saving Lots of Cash with Your own Third Party Campervan Hire Excess Insurance
The smart way of being covered in case of accident is to take out a travel insurance policy that includes accident liability cover for rental vehicles. Costs vary a lot but it is always significantly cheaper than the insurance offered by the campervan hire company. You can pick up $3000 worth of cover for about $75 a week. Obviously you need make sure the coverage offered by the insurance matches the full amount of the accident liability at the hire firm. Mighty Campers has a standard accident liability of $3500 on most of their vehicles while Britz, even though they are owned by the same company is $7500. A policy offering $3500 of coverage is perfect for a mighty campers hire but will leave you with a nasty shortfall on a similar hire from Britz.
What Travel Insurance Policies are Good Then?
You’ll find lots of insurance policies offering cover for car hire but if you look at the terms and conditions they often exclude motorhomes and campervans. When you pick a policy you’ll have to either go to a specialist provider that specifically offer motorhome excess insurance or very carefully check that the policy does includes campervans.
A lot of providers specify a maximum weight of 4.5 tonnes. The factory specs for the commonly used 2/3 berth Toyota Hiace list it as 2.8 tonnes.
Here is a list of providers that do cover campervans. Make sure to check the policy yourself though to guarantee it covers everything you need.
If you are an Australian resident –
1cover – Includes coverage for rental motorhomes under 4.5 tonnes
http://rac.com.au – Includes coverage for rental motorhomes under 4.5 tonnes, up to $4000, 2 weeks is $143 for RAC members and $170 for non-members
Tripcover.com.au (part of the Allianz group) – Includes coverage for rental motorhomes under 4.5 tonnes, up to $3300,
* Australian resident is often defined in the terms of the policy as someone resident in Australia who is also eligible for Medicare. So if you live in Australia on a temporary visa you probably wouldn’t qualify and will need an international policy.
If you are an international visitor –
Questor Insurance – £145.18 for two weeks cover, worldwide cover up to £5,000, maximum vehicle value $80,000, minimum age 25
Worldwide Insure – 152.25 for two weeks cover, worldwide cover up to £5,000, maximum vehicle value $80,000, minimum age 25
If it’s so much cheaper what’s the catch?
The catch is you have to be sure that the third party policy you take out covers everything you need. If take the one from your campervan rental firm of choice it will be massively overpriced but you at least know it will cover you. With a third party policy you’ll need to read the fine print. For instance, the Questor Insurance UK policy has a maximum vehicle value of £50,000 (about 80,000 AUD). A brand new Toyotay Hiace has a list price of $60,000 and you can pick up five year old models for $20,000. If you hire a brand new one it’s possible the list value could be more than $80,000 with the conversion and if you hire a bigger 6-berth model it definitely will be. As always read the fine print.
You also have to be very careful that the kind of accidents and damage that might happen are covered by your policy. If in any doubt contact the hire company and get it in writing. For instance, overhead damage is one of the more common insurance claims. Make sure your third party insurer covers this.