Insurance
If your motorhome is nearly new, you need to ensure that you have this type of cover
New for old cover If your ’van is new, you need this
In normal times, you buy a new motorhome, it depreciates, and, in the event of it being a total loss a year or two down the line, you take a bit of a hit on it financially. Well, unless you’ve taken out GAP insurance, or you have new-for-old insurance cover. But we’re not living in normal times, because a combination of Brexit and Covid means that everything is topsy-turvy, with people paying over the odds for anything leisure-related, thanks to a lack of supply and very high demand.
As a result, at the moment you could buy a motorhome (or you might have done so within the last couple of years) and you may find that it’s worth more than you paid for it. Or, more likely, you’ll find that you can enjoy essentially free motoring for a while, because a year and several thousand miles down the line, you might be able to sell your vehicle for about the same amount that you paid for it. Strange times indeed.
It’s unlikely that this is going to last, though. The many glitches around Brexit will begin to be ironed out, and Covid restrictions will disappear, allowing us all to take our motorhomes into Europe once again. Add to this the spectre of some motorhome owners selling up to opt for flights overseas instead and, as the supply/demand situation becomes more balanced, things will start to get back to normal.
Normal means your motorhome losing a chunk of its value each year and this can cause problems in the event of it being a total loss early in its life. Even in normal times, most motorhomes don’t shed their value like a car does, but these are still big-ticket items that can easily lose many thousands of pounds in their first year or two. If 18 months down the line your ’van is a write-off, you’ll be in the position of having to find a suitable replacement, but can any used motorhome be a genuine replacement for one that you’ve owned from new?
With new-for-old cover, your insurance company will pay for a brand-new vehicle for you, the cost of which could be significantly higher than the value of the one you’ve had stolen or which has been crashed, so it’s well worth taking out this type of cover. There are a few caveats, of course, including the fact that you’ll probably have had to have owned the vehicle from new, and there will be mileage and time limits. For most policies, the vehicle will have to be no more than a year old, but some companies have a two-year limit – and there are even one or two that stretch this to as much as three years. The mileage limits tend to be generous, often allowing far greater distances to be covered than is typical.
The way the policy works is simple. In the event of a total loss claim, your motorhome should be replaced with a new one. If your vehicle is stolen, that’s a straightforward scenario but, if it’s badly damaged, the insurer has to decide whether to repair or replace. If the repair costs exceed the insurer’s chosen threshold, you get your new ’van. So, if the insurer’s limit is 60% of the vehicle’s new list price and the new version of your ’van costs £60,000, they’ll buy you a new vehicle if repairs will cost more than £36,000 (as long as you valued your ’van at £60k when you took out your policy).
We don’t know of any company that charges extra for new-for-old cover; it’s a standard part of most motorhome policies. On that note, some insurers sell car insurance packaged as motorhome cover, so you miss out on a lot of the add-ons that are essential as a motorhome owner, new-for-old cover being one of them. So, as always, check those allimportant terms and conditions before you sign up.
Motorhome Protect’s Andrew Evanson concludes, “New-for-old cover means that if your insured motorhome is stolen and not recovered, or damaged beyond economic repair, it will be replaced with the most recent model, or equivalent. To be covered on a new-for-old basis, you must insure your motorhome at the value it would cost to replace with a new equivalent model, not its current value.”