Buying A Static Caravan – An Insurance Perspective

Feb. 26, 2010 - PRLog -- Even in these recessionary times many people will take the plunge this year and buy a static caravan sited in the UK. It’s an attractive proposition, to be able to future proof your holiday costs, but before you go leaping in, you need to arm yourself with some information and take your time. Many people commit themselves to a major purchase for an amount that only a few years ago would have bought a house without, making the most basic of checks.

You really should approach the purchase of a static caravan in much the same way as you would a house. Many people do not use the services of a solicitor, but, if you don’t, you really need to do the same checks that a conveyancing solicitor would do, if you were buying a house. In particular you need to read the contract carefully, make sure that you understand it and be aware of the implications of what you are getting into.  

There are many free resources online to help you to prepare. The Office of Fair Trading has a free guide called “Guidance on unfair terms in holiday caravan agreements” which is well worth a read.  www.oft.gov.uk

A few things to consider are:

1. What security of tenure do you have?
2. How long can you stay in your caravan each year and is there a closed season?
3. What happens if you want to sell your caravan. Some sites insist that they handle the sale and charge a commission, some insist that you sell the caravan back to them but at what price?
4. If you have to, or want to, change your caravan on the same site what are the implications? Some owners insist that you buy the new caravan through them or pay a resiting charge.
5. When your caravan gets older what happens? Some site owners have a maximum age of caravan at which time you are forced to change it or leave. There may be costs and other implications in both situation.

This is not an exhaustive list and you must check other issues on the contract thoroughly.

If you are buying “second hand” from someone who already has a caravan sited this has other implications. You need to be certain that the caravan owner is the actual owner and that they are allowed to transfer the lease to you. You will also need to carefully check all of the contract terms and make sure that you understand them. You will need to have the condition of the caravan checked and establish a fair price for the site and the caravan on it.

There are a few issues from a caravan insurance http://www.caravanwise.co.uk/ point of view. Most sites insist on £2 million third party (public) liability insurance and they will want to see proof of this each year. Some sites insist that you buy insurance through them or charge a fee for the process of checking that you have liability insurance. This fee must be a reasonable amount. In addition to liability insurance you will want to be covered if your caravan is damaged through accident, fire or storm. If your contract insists that a badly damaged caravan is replaced with a new one, and/or there is a resiting charge, then you need to cover your caravan on a new for old basis and include an amount for site clearance and resiting.

Many people are surprised at the value a site owner puts on the lease of a plot. In some cases a caravan which is available new and un-sited from a dealer for say £25,000 is offered on a site for double this or in some cases as much as four times. On top of that you have to pay an annual charge and your contract may limit what you can do with your caravan. In terms of insurance value you need to use the un-sited value plus resiting costs and fees, not the price of the sited caravan with a lease charge. Check with your own insurer http://www.caravanwise.co.uk/ what basis they require your valuation.

Flooding has been very much in the news in recent years and caravan sites have been at least as badly hit as homes. What appears in the summer to be a beautiful river side spot can in the winter be a very scary place. There are some basic checks that you can do to reduce the risk of buying a caravan on a flood risk site. Ask the site owner and other caravan owners on the site if it has ever flooded or suffered from storm damage and write down what they say as you insurer will probably want to know. In England and Wales you can use the Environment Agency’s Flood Map www.environment-agency.gov.uk/. The link to the flood map changes from time to time so you will need to go to the home page and find your own way. The system works by entering a postcode. You will need to check that the postcode you have is for the site and not for the office address. In Scotland  SEPA have a similar flood map here www.sepa.org.uk again you will need an accurate post code. It is also useful to visit Multimap or Google maps and use the OS maps and the aerial photographs to check the site against  a possible flood risk area shown on the Flood Map. Usually you can zoom in on the site and then overlay the map. Then go back to the Flood Map and do a comparison.

If you do your homework, read the contract carefully, consider the implications of that contract and buy yourself some good static caravan insurance then you will massively reduce the potential pitfalls in buying a static caravan. If you are in any doubt about your ability to do this for yourself then ask your solicitor if they can help you.

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Caravanwise is a UK based insurance intermediary based in Dorset. Providing insurance services for touring caravans, static caravans and motorhomes.
http://www.caravanwise.co.uk/