UNDER-VALUE INSURANCE WARNING
Arguably the most important aspect of an owner’s caravan or lodge insurance is the sum they are insured for, Compass Insurance advises. It is not always the number the customer looks at, in the first instance, but it’s the one that, in the event of a claim, becomes critical. If the estimated amount is too low, then claims payments end up being reduced. “We’ve seen a few examples where the rising cost of new caravans has resulted in customers becoming under insured through absolutely no fault of their own,” explains Richard Walker, Head of Product, Marketing and Development at Compass Insurance.
“They insure for the right amount at their new business or renewal but then six months later when they have a claim, that sum is then not enough to cover a brand-new replacement.” “We have had instances like this and have made sure that customers weren’t penalised or left worse off and paid the claim in full. “However, we’ve also heard stories where this hasn’t happened and as with any contract, and insurance is at the end of the day a contract, if it isn’t written in, then you rely on good will and good faith. “So, at Compass, and because we work with the interests of the industry at our core, we set about making sure this couldn’t happen to any of our customers.”
From June 2022 every customer who insures with Compass will benefit from protection in their policy against this. Richard continues: “We’ve introduced a very simple insurance ‘instrument’ known as a Waiver of Average and written it in a way that means so long as the customer insured for an amount that was correct and adequate at the point their policy was taken out, or at their most recent renewal. “We won’t make any deduction for under insurance if they find themselves under insured due to supply chain and replacement caravan issues.
“They need to be able to show that the amount was adequate at the time, and there obviously needs to be a valid claim in the first place and no issues with policy compliance,” Richard says. “But we know this offers the protection that customers need against the unintended consequences of the caravan market right now.” No one knows where the current rise in replacement costs might end up, or how long the pressure on the supply chain will last for, but the Compass team is ready and willing to enable you to support your owners in the best way possible.