Motorhome Insurance made easy!

August 25, 2020

When hiring a motorhome, 4WD camper or campervan, you will have a certain level of insurance cover included. This insurance protection can be increased to give you added protection by paying a higher daily rate.

planning-your-camper-holidayWe’ll help you understand if it is really that important to increase your insurance cover for your camper holiday and is it worth it? At the end of the day, it’s important to understand what is and isn’t covered when you stay with the ‘standard cover’, it may also give you peace of mind. We’ll explain about the differences in the insurance options here.

We often get asked for clarification on what the insurance excess/liability is on the vehicles and what does it all mean. It can be a little daunting if this is your first RV hire, however this article should make it clearer.

There are three main levels of insurance:

  1. Standard Insurance
  2. Reduced Insurance
  3. Package or Inclusive Option

 1. Standard Insurance
There are three things to bear in mind with this level of insurance. Firstly, you are required to place a bond (refundable security deposit), you are liable for damage up to a certain dollar level, and you will have some exclusions in most cases, that will have no cover at all.

The first cost is the bond, and this cost is the same amount as the liability and this amount is charged to your credit card and held for the duration of your rental by the supplier. It is important to understand, this is actually charged to your credit card upon the collection of your camper (credit cards are only accepted), not just held. For a lot of people this is more than they have available on their credit card and if there happens to be an accident, this money could be tied up for a period of time, even if it wasn’t your fault. Alternatively, when you return the vehicle at the end of the trip with no damage, in line with the terms and conditions (toilet etc. emptied), then the bond is refunded back to your credit card.

A trap to watch out for when taking the ‘standard liability’, is if your credit card is not in Australia Dollars, when the bond is charged to the credit card, you will see the bond amount converted to your local currency on your credit card. Your bank has a buy rate and a sell rate when it comes to exchange rates. If you have no incident on holiday, you will probably find a lesser amount will be returned to the credit card, unless the exchange rate as moved quite a bit in your favour while on holiday.

alcohol_restrictions_australiaSecond, the liability option is all about the insurance excess you are required to pay (this usually falls inline with the same amount as you pay as a bond) should there be an incident. This means you are responsible for repairing the damage at the cost that is  (please note per incident, not per hire – if you are incredibly unlucky). Should there be an incident which is not your fault, then the supplier will still retain the cost to fix the vehicle, until the money is received from the third party’s insurance company….which could take up to a month or two! In Australia, it is compulsory that everyone has at least third-party insurance.

Thirdly, with many suppliers, you will find there are certain exclusions to the cover if you are taking the standard liability reduction option. Some of these may be obvious like tyre and windscreen damage, but others less so. Some suppliers will not cover overhead and under-body damage or single vehicle rollover. This means, should any of these events happen, your liability will not be limited to the ‘standard’ cover you have opted for (amount varies depending on the vehicle type/brand), but will be the cost to fix the vehicle. With many suppliers these ‘exclusions’ will have protection when reducing your liability/bond.

Standard Insurance inclusions differ between suppliers, but as a rule of thumb most of them cover the following:

  • Unlimited kilometres for 2WD campers (4WD’s usually have a daily limit)
  • Vehicle liability
  • Linen and bedding
  • Kitchen equipment
  • General equipment
  • Customer care and road side assist

TOP TIP: for our international clients, it might be worth noting that if you take out the Standard Insurance, there is a risk to take into consideration such as the exchange rate. These charges are in Australian dollars, so there will be an exchange rate risk on these refunds. (Credit card fees apply, and a Travel Debit card cannot be used)

If you can’t stretch to cover the amount of the liability/deposit on your credit card and are concerned about your money being tied up or you being responsible should there be an incident, then many people choose to have peace of mind and reduce the liability/bond to as low as $0 with either no bond, or a small AU$250, which is then held on the card, rather than charged.

2. Reduced Insurance
All the suppliers offer the option of paying a higher daily day rate for the RV hire. This will reduce the bond and give you better peace of mind. Reduced Insurance may seem expensive initially, but for a fee that is way less than any expense you may incur should anything happen – it can be appealing for some to have the peace of mind. It is also a ‘known’ expense, as opposed to what ‘might’ happen if cover is not taken.

Reducing your liability option will generally include (again these can differ between the suppliers):

  • Freedom camping scenicReducing the vehicle liability/bond (from anywhere as high as AU$8,000) down to AU$500-AU$0 depending on the vehicle type/brand.
    • Some brands also have a partial liability reduction option
  • Overhead and under-body damage – some suppliers include this at this level. An example of overhead damage can be hitting a tree branch in a camping area for example.
  • Accidental damage to tyres and windscreen – some suppliers include this at this level
  • Single Vehicle Rollover cover – is still usually excluded at this level and only included with some brands in the ‘package’.

If Reduced Insurance is taken, then the cost is capped at 50 days with the remaining days covered for free – so it really works in your favour for long hires. If you choose to fully reduce to a $0 insurance liability with an AU$250 or AU$0 bond the bond is a ‘swipe’ against the credit card, rather than a charge. If you bring back the vehicle in line with the terms and conditions (toilet etc. emptied), this is not actually charged to the card.

With any form of insurance, there are always exclusions. Check what is not covered under the $0 liability cover and the list of exclusions. Be sure to read them when they come through in the terms and conditions of the hire. There can be some big variances among the brands as to what is and isn’t covered. For example, some brands will not cover Single Vehicle Rollover at all, and some of the older brands don’t included tyre/windscreen cover as part of their top-level cover – there is an additional cost.

We mentioned earlier on that there is also an additional layer of insurance that some suppliers call it their ‘Package / or Inclusive Package’ and is the most popular with our clients.

3. The Package / or Inclusive Package
The package is great value for money as it includes top level liability cover, in most cases it extends that cover to include protection that would not otherwise be included.

It varies among the suppliers, for example, overhead/under-body damage is included in the Reduced Insurance for some, however with other suppliers its only included when you take the highest cover insurance package.  This type of damage is excluded in the Lets Go Platinum package.

Out on the road in Central QldIf you are after the single vehicle roll over cover, the majority of our partners have the ability to include this level of insurance in their Inclusive Package. Let’s Go do not offer protection for single vehicle rollover.

The Inclusive Packages also comes with extras that are useful for your trip.

We’ll show some of these inclusions below, however terminology and inclusions varies between the suppliers. When you get your detailed quote be sure to check that you have the correct cover for peace of mind travel, and if you want single vehicle rollover cover, to ensure that you have let us know so we can show you the correct brands that offer this. Sometimes it can be a trade off  in choosing the features you would like, versus the benefit of peace of mind insurance cover. It is most important that you understand the detail.

The package is mostly taken with our clients once they understand the benefits and desire for peace of mind travel. Usually to upgrade from the Reduced Insurance cover which we spoke about earlier, to the Inclusive Package option, is a minimal extra cost and is taken by the vast majority of our clients.

Here’s an explanation of what is included in the various Inclusive Package options (not all brands include or offer the below):

  • Single vehicle roll over cover – provides protection if the vehicle rolls onto its side with no other vehicle involved. Often, this can be a write off of the vehicle, so many of our clients sleep better knowing they have this protection (not available with Lets Go Motorhomes).
  • Linen Exchange – if you have a long hire, then you may find this useful as you get the opportunity to stop in at one of the suppliers depots (if they are en route on your journey) and simply switching your linen for clean sheets/towels etc, and can even get a quick clean on the vehicle if you like (48 hours’ notice required).
  • Overhead and under-body damage (if not included in the Reduced Insurance above), this gives you protection when driving into something lower than the height of the RV. Driving into an underground car park is rare, however hitting a tree branch in a camping area can be more common. Not all brands offer this protection, but many now offer as part of the Inclusive Package or at Reduced Insurance cover level.
  • Accidental damage to tyres and windscreen (if not included in the Reduced Insurance above)
  • Camping table and chairs
  • Extra driver fee – highly recommend this if there are two of you travelling, just in case of sickness or any other reason. Some brands have an extra fee, others have this already built into the standard rates
  • 1GB of data (not currently available 2020) – With brands such as Maui, Britz and Mighty, this works off the GPS unit at the front of the vehicle, which has a few other features. The 1GB is sent out as a hot spot, and you use a password to access. If you need more data, then you can purchase more with the Maui, Britz and Mighty brands for example from April 2021. This can be done on the device, or there is a toll-free help line for any on road questions. It is through the Telstra network which has the best coverage in Australia.
  • Child restraints – baby booster/baby seat are available if required

Our recommendation is that you look at the total cost for the motorhome (with insurance), rather than looking specifically at the insurance cost. It can be perceived as expensive, however as you start to understand the other costs involved when not taking the insurance cover, it certainly becomes more attractive to most of our clients.

We find brands such as Maui, Britz and Mighty,, Apollo, Star RV, Cheapa and Cruisin when taking the top-level option (package) gives the best bang for your buck, with the peace of mind cover. When taking the package, the main things that are not covered are if you are breaking the law (i.e. drink driving); putting petrol in a diesel engine; locking keys in the car; driving through flood waters (which should never be done) etc.

It might also be worth checking with your travel insurance company to see what is covered with them, but the big things which are often excluded are things like single vehicle rollover or overhead/under body damage. If you do choose to take insurance elsewhere, e.g. if you have great travel insurance policy, please be clear that the motorhome company will still charge the bond to your credit card at time of pick up.

If you are planning your trip down under, then check out our Travel Routes and vehicle hire and drop us note when you have an idea of your travel itinerary and let us provide you with an idea on costs to help make your trip become a reality!

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