Caravan park industry may be ‘brought to its knees’

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bushfires cause spike in insurance premiums
Flashback: The increasing frequency of bushfires like this one at the start of the year are making it difficult for some van parks to get insured. PIC: Facebook / Ahlia Olley / ABC

Already hit hard by this year’s pandemic-induced lockdowns, the caravan park industry could be ‘brought to its knees’ by a lack of affordable insurance cover, an inquiry has been told.

The Australian Small Business and Family Enterprise Ombudsman called the inquiry earlier this year to investigate insurance practices and cover availability after receiving complaints about policy denials and soaring prices.

The insurancenews.com.au website reports that ombudsman, Kate Carnell, has published 26 submissions in advance of a final report that should be completed before the end of the year.

Caravan park businesses and associations say that a lack of available insurance and spiralling prices could spell the end of a multi-billion-dollar industry which is a huge employer in regional areas.

“Access to affordable and adequate insurance coverage is crucial to the ongoing viability of the sector,” the Caravan Industry Association of Australia said. “However, in recent years caravan park operators are increasingly expressing their difficulties in obtaining coverage, excessively high premiums, limitations on policy extensions and reduced options in the market.”

Big4 Holiday Parks says areas with increased natural disaster risk are particularly hard hit.

“If this issue is not fixed in the next couple of years, it is likely the industry will be brought to its knees with investment stopping and facilities and activities being removed,” its submission said.

insurancenews.com.au reports that many caravan park owners are apparently struggling to find willing insurers after last summer’s devastating bushfires. They claim that underwriters are either declining to offer cover, or pricing policies beyond their reach.

Darren Fenech, regional manager SE Melbourne at PSC Insurance Brokers, said one of its clients, a caravan park on the outskirts of Melbourne was recently declined cover by a long-time insurer.

“Try getting caravan park insurance at the moment – it’s nearly impossible because of the inherent risks associated with bushfires, mainly due to the environmental settings they are located in,” he said.

A Senate committee inquiry into last summer’s bushfires has recommended the Australian Competition and Consumer Commission (ACCC) monitor insurance premiums due to concerns over future price increases driven by rising natural disaster risks.

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One Response to Caravan park industry may be ‘brought to its knees’

  1. Are the insurance company’s putting all caravan parks in Australia in the one basket, irrespective of which state and risk of destruction from bushfires ? I know of lots of caravan parks that are in open country, not in timber country. Maybe parks are over claiming for loss of income.

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