After a turbulent few years packed with challenges including Covid and cruel weather events, many caravan parks are now facing up to another major hurdle to their continuing viability … soaring insurance premiums.
Caravan Industry Association of Australia CEO Stuart Lamont told the insuranceNEWS.com.au website that annual premiums for caravan parks had skyrocketed, with many now facing the prospect of running uninsured.
“It has not been uncommon to see prices increase five-fold, should insurance even be offered at all,” Mr Lamont said. “A well-known award-winning caravan park in North Queensland had annual premium increases from $105,000 to $945,000 across two years, with his long-term insurer bowing out of the sector, leaving the property subject to a thin insurance market.”
Some van park operators are finding it harder to make the sums add up. PIC: Antoni Shkraba / Pexels
Mr Lamont said van parks had been a casualty of a lack of understanding of the product by predominantly international insurers.
He told insuranceNEWS.com.au that the industry had been communicating with brokers, insurers, and the Insurance Council of Australia to provide increased confidence for insurers to offer affordable policies … but he warned that some solutions may not be quick enough.
“A working model between industry and insurers is proposed so insurers have a better understanding of how individual sites can be better assessed rather than being blanket excluded by virtue of their category,” he said. “But the clock is ticking, and a broad-based solution may not come in time for some operators who will have to make the decision to self-insure, close their doors, or remove important pieces of infrastructure which are attractive to guests.”
The Insurance Council of Australia said the caravan park industry had been one of the hardest hit sectors by the current market, with the increasing scale and frequency of claims due to cyclones and flood raising costs.
Oracle Group Insurance Brokers MD Matthew Denehy told insuranceNEWS.com.au that it was becoming ‘impossible’ for uninsured caravan park owners to obtain cover.
He said existing policies had seen increases from 20%-60% depending on the park’s size, with high-risk areas finding coverage increasingly difficult.
“Some insurers are simply excluding cyclone altogether,” Mr Denehy told insuranceNEWS.com.au. “If you are in a flood zone, you can’t get flood cover, if you are in a bushfire zone you have a 40% increase and a high excess minimum of $50,000,”
He says he fears the inflated prices are ‘becoming the new norm’ and will force mum and dad businesses out of the industry.
“There are major park groups that can use their size to get cover as they have the size, cashflow and ability to do that, the average mum and dad who runs these smaller parks simply can’t,” Mr Denehy said. “The addition, over time, of amenities that carry higher insurance risks such as pools and inflatable amusements has also raised the risk profile of this sector.”
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Not only businesses having high premiums. We have had to devalue our house, this year to be able to afford insurance, but the premium stayed the same as the year before $1500, for $150,000 dollar house. Next year we have been told we can’t devalue it anymore. The house value was originally $340, 000. I wouldn’t insure it at all, if I could but we have trees on the block, and neihbours and if a tree fell on any other house we would be screwed. Our contents or only $10,000 and it is $1200. We are with the cheapest insurers we can get. Have had no claims ever. We are pensioners, so you can only ever afford just so much..
If more people would take responsibility for themselves and maybe cared where or what their children were doing, Public Liability insurance for a start wouldn’t be such an issue that it has become.
Too many people these days looking for the free lunch to the point of feigning injury in order to lodge a fake claim against some poor unsuspecting property owner.
Insurers are aware that many claims made are fraudulent, but there is no fool proof way to separate the wheat from the chaff…
Insurance premiums in north queensland for caravan parks are hard to get, and if you can the coverage is limited. I know of a park that had a $5000k cyclone excess and 3 yrs later it is $100,000k. This on top of their premium tripling for less coverage. The cost of doing business has really increased for smaller parks and they are the ones usually working 7 days a week for most of the year. Then people still winge about the cost of site fees that are under $40. Help these small business’s out.
We were lucky, we shopped around, and saved $300.
Hi Guy, who did you obtain insurance from?
There is a new underwriting working to try and fix this issue. The only issue is the only viable insurers aren’t authorised by APRA despite operating in the UK/Europe for years but sadly they are looking like the only viable solution.
An eye watering costs is a double edged sword for caravan park owner and the traveller . The camper or traveller used to pay what was once cheap places to stay , but today they pay more than the market rent for a unit or house per night hundreds of dollars per week to plug in and stay on a patch of grass is dumb. The park owner passing on all costs to the traveller is normal now and has become not cost effective with staying in these places any more . With high tech off grid capable the self contained 4×4 style vans with showers and proper toilets t is no need for the over priced patches of grass any more . This tech has disrupted the overpriced caravan park rents. They just cost too much and are a rip off in 2023 . People who once would rely on the caravan park for their road trips around Australia don’t need to any more . It the same equivalent with what holiday short stays Air BNB has done and disrupted with the local well established hotel industries . The end is near for the caravan park . They used to be considered a licence to print money 20-30 years ago and very sort after as a business but the insures doubling tripling and refusing premiums and high tech affordable off grid capable caravans have meant the end of the once lucrative caravan park .
Local shows, art galleries, public meetings, all manner of clubs, halls and anybody wantng to hire a room for a meeting are faced with this un -Australian need for this insurance. So many clubs and groups that promote social interaction, fun, movement and community support have had to close because of the money that has to be raised entirely for insurance. Many have sadly closed and many more will soon go to the wall. All we will have left is big business. Its time we get back to the Australia we are used to. It won’t happen. If the government insured all “reasonable” local events that submotted a risk analysis the costs could be so low.
Unfortuneately many would see it as a great reason to “fall over” and make a claim. That’s the world we live in. Years ago I wanted to start a camping group for new refugees that needed a cheap holiday that was load of fun. Then somebody asked me had I though about an accident and what that could cost the leader. Hmmm. I never did it.
Like most things nobdoy cares anymore. We can have a camp together as long as nobody is the leader and we all insure outselves. Maybe?
Then six years ago I had an accident at a friends house and was badly hurt. I had to sue his insurance company to get the money for the rest of my super as I found it very hard to work anymore. I then saw the other side of all this. Mind you -it’s not easy to get that money as you have to threaten to take it to court to get a settlement. Something that can leave you with a larger debt if you lose. Very risky. Not nice stuff.
I do agree totally with John. I just need some grass and sunshine to have a holiday or a stopover. Dump points aren’t hard to find. Water is easy to get along the way. I use just over 10 litres a day. My total costs are for the day including food and fuel are less than the cost of a medium priced caravan park. (I dont travel far in a day) Caravan parks to me mean either double the cost of a holiday or half the amount of time. I did 9 weeks in Tasmania and never paid a cent for accomodation. Some of the places we stayed at we were on our own and the scenery was just amazing. So different from the costly sardine caravan park experience. Last year I went to a sunshine coast caravan park. My firends lost their chairs and I lost my good crocs that I left outside the door. You live and learn. I have had four thefts and break ins in my life. All have been at caravan parks. I lived in one for 18 month. Crime stats in parks have been hidden by some tricky studies. I only go to them now when I really have to. So many lovely green free camps (There are now four free camps with hot showers within one days journey of Brisbane). Well done to Linville, Kilcoy, Benarkin and Wondai. I go to all of them each year and I am taking my chapter to one later in the year too.