Our caravan is approaching its 5th birthday and until now, we have had a new for old insurance policy which covers vans up to 5 years old. When our renewal came through this week, the new policy has changed to a ‘market value’ policy as the caravan will be over 5 years old. I have done a number of quotes and price comparisons online and the cost of a new for old policy now is ridiculously high, even though we have the maximum no claims discount, so I am considering the market value policy. However, I am finding it difficult to understand exactly what the market value would be! For example, when I look online for a second hand caravan identical to ours from the same year, prices vary widely depending on whether it is being sold by a dealer or privately. If the worst happened and our van was stolen or completely written off, would a market value policy pay out enough to buy the same year and model van from a dealer? Does anyone have any experience of a Market Value claim?
When we changed ours from new for old to market value it was about £1800 less than dealers had the same caravan advertised for. So basically midway between trade in price and dealer selling price. Going to market value halved our premium, than if we had continued new for old,as basically to keep this cover you need to increase value £1000 or more each year to keep up with new prices.
Think that depends on which end of the market you are on! My understanding/expectation on 'market value', which is based on car insurance rather than caravan (but insurance is insurance!), is that it is, or is very close to the trade buying IN price, NOT the retail price, private or trade! Anyone who's ever made a total loss claim (or traded in a vehicle) will know that there is a huge margin between the two, and that the payout will not usually put you in a position to buy a like for like replacement at retail prices without adding additional funding to the pot!
The 'generosity' of the payout does seem to vary from one insurer to another, and sometimes a bit of arguing can raise a insulting derisory offer to a better one. Remember, insurers are all about making profits for their business, not primarily looking after your best interests!
On a older/ageing vehicle, new for old becomes an impossibility to fulfil, as current new products are usually actually an upgrade as well as a replacement, and who should pay for that?
In the classic car world where a new replacement is simply not an option but trade prices do not reflect anything like the true value, a third alternative is available, 'Agreed Value'. An independent valuer places a value upon the vehicle, and the insurers cover to that value. I don't know if that is an option for caravans!
With the current elevated prices for caravans, the chances are that even a trade price payout would come close to compensating you for what you paid for the van a few years ago, but it doesn't help with getting a replacement at current retail prices!
Some years ago I had a horse trailer stolen.
It was insured as market value - and I had to argue hard to get a realistic sum paid out.
Luckily I was able to produce a selection of current adverts from various specialist magazines for trailers of the same make and model and of a similar age to prove that the payment I wanted was a genuine market value.
One thing that always stuck in my mind was when I asked the insurer why the offer was so derisory, their answer was they had made a "deduction for depreciation".
I rather firmly had to point out that as this was insured for market value depreciation from new was already built in.
Think it took about 3 months for them to finally agree a sensible sum.
I completely agree with what Monty15 says. I had a vehicle stolen once, a Mazda Bongo, not camper-converted just an 8 seater. The insurance pay out was ridiculous, and came nowhere near buying a similar replacement. When I queried it they pointed out that there were others advertised on ebay for a similar amount to what they were offering, which was correct, but for that price they were probably near wrecks that would probably require enormous sums spent on them to get them to running order. Mine was in good running order and was used every day, but when I pointed that out to them their reply was "well we don't know what condition yours was in, do we?" There wasn't much I could say to that and as I had to replace it with another vehicle quickly, I reluctantly had to accept their offer.
Basically then, in my opinion, "market value" means whatever the insurer wants it to mean.
Thank you for the responses everyone. That is what I suspected, that the market value sum would probably not cover us buying a like for like replacement. The other issue that I have that has just occurred to me is that most people who caravan have dogs and therefore, most second hand caravans will have had dogs in them. As I am exceptionally allergic to dogs and can’t even go into someone’s house where there are dogs without a big allergic reaction, the chances of us finding a suitable second hand replacement which has never had a dog in it is slim.
I think I will just have to bite the bullet and pay the extra for the new for old policy for a few more years, at least until the van is a bit older!
Quote: Originally posted by Pixie_Hez on 11/2/2023
Thank you for the responses everyone. That is what I suspected, that the market value sum would probably not cover us buying a like for like replacement. The other issue that I have that has just occurred to me is that most people who caravan have dogs and therefore, most second hand caravans will have had dogs in them. As I am exceptionally allergic to dogs and can’t even go into someone’s house where there are dogs without a big allergic reaction, the chances of us finding a suitable second hand replacement which has never had a dog in it is slim.
I think I will just have to bite the bullet and pay the extra for the new for old policy for a few more years, at least until the van is a bit older!
I think you have just about summed it up. I would say that it is an absolute certainty that any insurance pay-out would not cover a like-for-like replacement, and the only real way of guaranteeing a caravan has never had a dog in it would be to buy new anyway. Even if you bought another 5 year old caravan from someone without a dog, they might have bought it from someone who did. They won't necessarily tell you that or they might not even know if they bought it from a dealer.
I once had an 'agreed value' van written off. They tried to pay me 'market value', which was about £1200 less. But i just pointed out we had agreed i would be paid £xxx if it was 'lost'. As it was actually printed on the forms in black and white, they had nowhere to hide. Not sure if this is still possible??
I think "agreed value" is still available. It certainly is on classic cars. I would think it was very expensive with a caravan though. Usually with classic cars there is a mileage limitation too, as often they only do a few miles on the road each year. The owners usually trailer them to events any distance away.
Quote: Originally posted by Colin21 on 13/2/2023
I think "agreed value" is still available. It certainly is on classic cars. I would think it was very expensive with a caravan though. Usually with classic cars there is a mileage limitation too, as often they only do a few miles on the road each year. The owners usually trailer them to events any distance away.
I cant see me as paying over the odds/silly money, if im honest Col. Though i cant remember now. It was just that ive never been offered this since. So didn't know if it was still an option. Just renewed, so will pose the question next time around.
Quote: Originally posted by Colin21 on 13/2/2023
I think "agreed value" is still available. It certainly is on classic cars. I would think it was very expensive with a caravan though. Usually with classic cars there is a mileage limitation too, as often they only do a few miles on the road each year. The owners usually trailer them to events any distance away.
I cant see me as paying over the odds/silly money, if im honest Col. Though i cant remember now. It was just that ive never been offered this since. So didn't know if it was still an option. Just renewed, so will pose the question next time around.
I don't blame you at all Mick, I wouldn't want to pay over the odds either. It may only be available now on classic caravans anyway, such as those in the Retro Camping Club, for which even mine at 31 years old is "too modern".
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Topic: What does Market Value actually mean?
