Save on your motorhome insurance
With the Association of British Insurers (ABI) warning that motor insurance costs will continue to rise if action is not taken to curb the rising cost of settling personal injury claims, we caught up with the insurers to find out how you can save some pennies on your motorhome insurance premium...
Earlier this year, ABI made the stark warning following statistics from the AA revealing that the average motor insurance premium has risen by 40 per cent over the last year.
But does the same law apply to motorhome insurance costs? If so, what measures can you put in place to save some cash? Here's what a few of the top motorhome insurers had to say:
Shield Total Insurance
"It has been widely publicised that the cost of motor insurance premiums has increased by between 30 and 40 per cent in the last 12 - 18 months. This is because traditional motor insurers have relied too heavily on investment income to make a profit and liability claims have soared.
"Whilst motorhome insurance differs from traditional motor insurance it still faces some of the same challenges. This is largely because many insurers still base rating, underwriting and policy cover on standard private motor insurance so as a consequence premiums have risen. The increase in VAT and IPT imposed by the government have also added pressure to premiums.
"By using a specialist motorhome insurer, such as Shield, you may be in a better position. Whilst premiums will have been affected by the increase in VAT and IPT, they will not have been so badly affected by the losses within the traditional motor market. As a specialist their criteria for rating the business will be based on you and your motorhome rather than what has happened in the market.
"By using a specialist motorhome insurer who understands the needs of the customer, any rise in premium should be far less than in the traditional motor market. Insurers will have a range of discounts recognising safety, security and storage, not forgetting usage. Unlike motor there is no standard percentage increase or difference between costs for men and women, although recent legislation has put an end to this activity."
But what if a motorhome is declared SORN during the months it isn't used? "Under the current insurance system the motorhome still needs to be insured even if it is SORN as it is still vulnerable to damage, theft, fire or flooding. As all insurance premiums are rising, for the reasons given above, even those insuring SORN vehicles will see an increase."
MMM has received letters asking why HGV drivers don't get a discount, why is this? "The driving portion of a policy, on which HGV experience would have a bearing, is only part of the risk being insured. Being a current or former HGV driver would not reduce the risk of your motorhome or caravan being stolen, set on fire, damaged by floods and extreme weather or by another motorist when stationary, for example.
"However, discounts are offered to those who complete motorhome maneuvering courses so it is worth looking into. Currently, Shield is able to discount policies for customers meeting limited mileage, security and safety criteria and, of course, offers a percentage no claims discount."
"General motor insurance prices rose on average by 38 percent last year (The Telegraph 12th Jan 2011), but we’re trying to keep our premiums as low as possible, and have only raised premiums by a fraction of that.
"Insurance schemes have an ‘operating loss ratio’ which basically looks at all the premiums paid by the scheme’s policyholders against costs of administration and claims paid. When the costs exceed the premiums collected that’s when a scheme starts to lose money, and premiums unfortunately have to rise - this is exactly the problem many general motor insurance schemes face at the moment.
"In Caravan Guard’s case it certainly isn’t true that motorhome owners are paying for the claims of other motorists (ED - some readers suggested to us that this may be the case) – our specialist scheme runs independent of any other motor insurance scheme. We have our own loss ratio and claims statistics which govern our prices.
"We have seen our motorhome insurance claims costs increase in recent years. Personal injury claims are playing a huge role in this, with certain individual claims reaching several hundred thousands of pounds.
"You’d hope that the steps taken by the insurance industry as a whole to review their prices will mean that motor insurance prices in general will not have to increase much further. We base our rating structure on our research and experience within the motorhome market, looking at the types of motorhomes/owners that are generating the most claims to rate accordingly. For instance we will decrease rates if we notice a cluster within our customer base that is generating less than average claim numbers. Around 18 months ago we identified that certain types of large motorhomes were worthy of a 25 per cent rate reduction.
"Also, because we’ve found male and female motorhome drivers to present a very similar claims risk we don’t rate their premiums any differently. Interestingly though, following a ruling by the European Court of Justice in March this year, from 21st December 2012 insurers are no longer going to be able to rate premiums based on gender.
"We only offer fully comprehensive 12-month policies so we do not offer a specific discount for a vehicle being ‘laid up’ (SORN) for 6 months. It is also worth bearing in mind that claims such as flood, fire, theft and vandalism can occur even when a motorhome is laid up. However we do provide discounts for motorhomers who cover less miles during their policy term, so if you’re covering less than 7,000 miles a year (which is more likely if you’re only using the van for six months) you will be entitled to a discount on your insurance policy.
"We offer HGV drivers a 65 per cent introductory no claims discount, providing they haven’t had a claim in the last three years, have no points on their license and have at least four years No Claims Discount on another motor insurance policy, eg a car.
"The maximum discount a person without experience of driving large vehicles can earn under the same circumstances is 50 per cent. Being an ‘advanced driver’ does not currently qualify as experience but it is something we are researching and may offer a discount for in the future.
"There are practical measures you can take to help reduce your insurance premium such as reviewing your annual mileage usage (we give discounts for lower usage), fitting extra security such as an approved tracking device, or moving your motorhome to a more secure storage address, or even by improving security at your home storage location e.g. Adding a drive-post or locked gates. Reviewing the number of drivers you have on your policy or increasing your excess can also result in valuable savings.
"Caravan Guard also make European insurance cover and Euro breakdown optional to ensure customers aren’t paying for cover they don’t need if they don’t intend on travelling outside the UK.
"Essentially, you are much better off choosing an insurer that allows you to build a policy to suit your needs rather than paying for cover you don’t need.
***MMM Club Members get a discount with Comfort Insurance. Click here if you're not yet a member***
Whilst motorhome premiums are constantly subject to minor increases in premium, these increases have been far smaller that those applied to the general private car market. In particular, scheme business such as Comfort is judged on it’s own results and not on the performance of the whole market. If motorhome schemes apply big increases in premium the chances are either that the premiums were too low in the first place, or poor underwriting has resulted in poor results.
"There is no clear answer to what increases may be expected in the near future, there are too many variables to be able to predict, and too many different schemes, all performing differently. Unless there is some dramatic change in the market, price increases are likely to simply continue on a regular basis.
"Recent legislation means that gender will no longer be usable as a rating factor, so expect discounts for female drivers to disappear over time. What helps to reduce premiums? Good security, not having claims or convictions and sensible storage arrangements all may help.
"Motorhome policies are usually based on some sort of limited mileage, so the premium already reflects the fact that these vehicles are not used like private cars.
"Insurers vary quite widely in the choice of what factors may deserve a discount. It is not easy to comment on why they may or may not recognise an HGV licence for a reduction in premium – logic says that there are grounds for consideration, but insurers rely on statistical data to apply charges and discounts. Similar considerations apply to specialist motorhome courses – some insurers may recognise these with a discount and others may choose not to do so. The only way to get a true response would be to ask all the insurers in this market individually."
Click here for the results of Which Motorhome's 2011 insurance survey to find out where you can get the best deal.