Motorhome Hire Insurance – liabilityreduction option and packages explained
A simple guide to how it works and what to consider
Planning a motorhome holiday is exciting and understanding how insurance works shouldn’t feel complicated.
Motorhome hire insurance in Australia can be a little different to what you may be used to, so here’s a clear, straightforward guide to help you understand your options and choose what feels right for you.
At a glance
- Standard cover: Lower daily rate, but higher liability ($5,000–$7,500+) and bond of the same amount as the liability
- Inclusive packages: Higher daily rate, and reduces liability to $0 (or low) and lowers the bond. The top level package can have different names depending on the brand, such as Max Cover or Platinum Cover
- Biggest difference: How much financial risk you’re comfortable with if something doesn’t go to plan
- Most travellers choose: The top level inclusive package for peace of mind while travelling
How motorhome insurance works
All motorhome rentals in Australia include a standard level of insurance cover.
This means you are covered but there is an amount you are responsible for if something happens. This is called your liability.
Standard liability (what’s included by default)
Most vehicles come with a standard insurance liability of between:
- AU$5,000 – AU$7,500 for motorhomes
- AU$5,000 – AU$8,000 for 4WD campers
In simple terms:
- If the vehicle is damaged, you are responsible for the first portion of the cost (up to your liability amount)
- This applies per incident, not per trip.
Even in situations where another party is at fault, the supplier may still hold your liability amount until their costs are recovered from the third party.
The bond (security deposit)
At pick-up, a bond is charged to your credit card, usually equal to your liability amount.
This means:
- Funds must be available on your card (often several thousand dollars)
- The amount is charged until the vehicle is returned as per the terms and conditions
- Refunds can take time for banks to process, and exchange rate differences will apply
For many travellers, this is one of the biggest considerations when choosing their level of cover. If your credit card is in a different currency to Australian dollars, there can be a significant cost associated with what is ‘charged’ and what is ‘refunded’. This is because banks have a ‘buy’ rate and a ‘sell’ rate that changes daily.
Reducing your Liability
Reducing your liability
You have the option to reduce your liability by paying a higher daily rate.
This also significantly reduces the bond, which is usually held as a pre-authorisation (a temporary authorization similar to staying at a hotel) on your card, rather than charged. The amount of the ‘hold’ is $0 with most of our inclusive packages.
This is similar to upgrading your car insurance at home. You are paying upfront for peace of mind during your trip.
What the inclusive package covers
Most suppliers offer a range of inclusive packages, which combine liability reduction with additional cover and extras.
While inclusions can vary slightly between suppliers, these packages often include:
- Reduced (or zero) liability
- Lower bond requirement
- Cover for tyres and windscreen damage
- Extended cover for areas often excluded, such as:
- Overhead damage (e.g. tree branches in campgrounds)
- Underbody damage
- Additional equipment such as outdoor table and chairs
For many travellers, this provides a more relaxed experience, knowing there are fewer unexpected costs along the way.
Important things most people don’t realise
There are a few key details that are not always obvious, but are important to understand:
Loss of use (demurrage) - If the vehicle is off the road for repairs, the supplier may charge for lost rental income during that time.
Per incident liability - If multiple incidents occur, the liability can apply more than once.
Exchange rate differences - If you are travelling from overseas, currency fluctuations can affect the amount refunded to your card.
Road and usage restrictions - All vehicles must be used in line with supplier terms. For example:
- 2WD vehicles are generally limited to sealed roads
- Travel on certain roads or in restricted areas may not be covered
We’ll always guide you on what’s appropriate for your planned route.
4WD travel
If you’re hiring a 4WD camper, insurance works slightly differently.
- Liability amounts are often higher
- Travel restrictions are more detailed
- Additional cover options may be available for more remote travel
If you’re planning a more adventurous itinerary, we’ll make sure you understand and have the right level of cover for your trip.
Longer hires (added value)
For longer rentals, the cost of liability reduction packages is often capped after a certain number of days (e.g. 40–50 days depending on the supplier).
This means you continue to benefit from the cover, without paying for it for the full duration of your trip.
What we recommend
Every traveller is different, and the right option depends on:
- Your budget
- Your comfort with risk
- Your available credit card limit
- The type and length of your trip
That said, most of our clients choose the inclusive style package, such as the Platinum Package or the Max Cover Package. It allows them to focus on the experience, without worrying about unexpected costs if something outside their control happens along the way. They look at the bottom line when it comes to total motorhome hire cost, rather than the ‘extra’ cost for the insurance/package portion.
How We Help
With multiple partners, each with different terms, it can be difficult to compare options clearly.
That’s where we come in.
When we provide your quote, we will:
- Show you options with and without the inclusive package
- Clearly outline what is included
- Highlight any important differences between vehicles or suppliers
- Help you choose what best suits your trip and your peace of mind
Have questions?
If you’re unsure what level of cover is right for you, we’re always happy to talk it through.
A quick conversation can often make things much clearer and ensure you’re set up for a smooth and enjoyable trip.
In simple terms:
Standard cover keeps your daily cost lower, but comes with higher financial risk.
The inclusive package costs more upfront, but removes most of that risk.
Frequently Asked Questions
We are here to help!
Gallivanting Oz can assist with specifics in terms of insurance costs with our partners, and the best option for your personal situation. Let us know if you would like to find out more about camper hire Australia, or if we can provide a Campervan Hire Quote for your upcoming adventure.
