01422 396 769 
quoteWhen you take out a caravan or motorhome insurance policy, the adviser on the end of the phone may ask if you would like to insure on a ‘new for old’ or ‘market value’ basis, but how do you know which is right for you?
In this article we explain the difference between the two, how they could impact the cost of insurance, and how they affect the settlement received in a total loss situation.
What is new for old cover?
If your caravan or motorhome is insured on a new for old basis and it’s damaged beyond repair or stolen, you will receive a like-for-like new equivalent. So rather than getting a cheque for the value of your old, damaged unit, it will be replaced with either the latest version of your vehicle or a shiny new equivalent. For caravan insurance policyholders insured with Caravan Guard, the same would apply for your equipment and personal possessions.
New for old cover pays out for a new, equivalent model in a total loss claim
To be covered on a new for old basis, you must insure you caravan or motorhome at the value it would cost to replace with a new equivalent model, not its current value.
We offer new for old cover on caravans, folding campers and trailer tents up to 15 years old; and it’s available for fifth wheel caravans up to five years old. You can insure your motorhome with us on a new for old basis too so long as it has a recorded mileage less than 24,000, is under two years old and you’ve owned it from new.
What is market value cover?
If you choose to insure your caravan or motorhome on a market value basis you are only covered for the amount it’s worth in terms of resale value. So if it’s ever stolen and unrecovered, damaged beyond repair or declared a total loss, you will be given the market value of the vehicle at the time that the loss occurred. This amount will be the same as the figure listed against the model in the Glass’s Guide.
What are the main differences between the two?
As new for old cover provides you with a brand new equivalent in the event of a total loss claim you need to insure at the value of a brand new replacement caravan or motorhome, which means it can cost a little extra than market value.
That said, new for old cover means you’re in a better position if you ever need to claim following a total loss claim (i.e. stolen and not recovered or damaged beyond economic repair). After all, if you originally bought your caravan or motorhome new, you may not like the thought of having to go out and buy a model that has been used by somebody else when armed with a market value settlement.
Likewise in the case of caravans, it’s comforting to know in a total loss situation your stolen or destroyed personal possessions and equipment will also be replaced with brand new versions. A market value settlement might mean you have to put a little bit of money towards when buying new replacement caravan equipment or possessions, or that you have to search the likes of Ebay to find suitable second hand replacements.
Another point of view is that many of us are used to market value settlements. If your car is written off, most car insurers will settle the claim on a market value basis, so many are prepared to accept the same type of settlement upon write off of their caravan or motorhome.
Will new for old cover affect my renewal cost?
If you’re currently insured on a new for old basis and you are approaching the end of your 12 month policy, it’s worth knowing that the price you’re quoted at renewal may increase. This is because the cost of what’s essentially the latest version of your current caravan or motorhome will likely have increased.
For example, if your 2014 Swift Esprit 424 motorhome is insured on a new for old basis and its declared a total loss after being stolen, you would be given a 2015 Swift Esprit 424 worth £46,535. Make the same claim in 2016, and you’ll receive the 2016 Swift Esprit as a replacement which will most likely have a higher recommended retail price than the 2014 model due to inflation.
Want to know more about new for old or market value cover?
If you’re unsure which cover to go for, or you prefer one to the other having recently made a claim, use the comment box below to send in your questions and share your stories.
We have a static caravan with a new for old policy,which seems to rise every year ,I have had a meeting with the site owner and was advised we must get the policy with his appointed insurance company not anyone else ,further investigations into the matter we found that he was the agent for this company or we might be told to get out .everything has to go through him even £90.00 so he obviously bumps the price up would you advise me to seek legal advice on this
Hi Hugh
Many parks work with in partnership with insurance providers as they like to make sure every customer has insurance cover. Such static caravan park block scheme arrangements do often offer very keen pricing and can be beneficial for static caravan owners. Your park operator can’t force you to insure with a particular insurance company. It might be part of your site agreement to have certain levels of cover and as long as you meet those levels you should be able to choose whichever insurance provider you want. Your park operator is entitled to ask to see your certificate of insurance to prove you have cover. If you haven’t already you might want to check out our static caravan insurance brand Leisuredays.
Thanks
Craig
I had a problem with this new for old with my present insurer when I contacted you for second opinion.Swift fairway 490/5 2006 my insurer correctly told me I could be under insured for n for old.I was advised to call a dealer which I did and as my model was not being made now I was quoted for a more expensive model.I asked my insurance if they could give me a value and they said not allowed.I later found a near perfect van new price not so expensive different maker.Asked if I could insure on this basis and told yes but they could not guarantee on payout if this value would be ok.(if you don’t cover new for old at correct value it goes to market value) I would like to know if you would use glasses guide to give a value new for old on any unit .I can not see salesmen running through glasses guides for all makes and models to give me an accurate cost while trying to sell caravans best quote there own makes and be done
Hi James,
Many thanks for getting in touch. If a customer contacts us for new quote (i.e. they’re not an existing policyholder) we run the quote based on the amount the customer paid for their caravan or motorhome. If an existing customer chooses to renew with us, we then refer to Glasse’s Guide for an accurate valuation when quoting a renewal price.
I hope this answers your question, please let me know if you need further information.
Lucie
Caravan Guard
Many thanks
Lucie
We have a Lunar Lexon CS 2004 and we have been told that a new version of ours would be the Lunar Clubman SI make 2015 about £22,794.00. Now much would the insurance cost us if we decide to go for new for old please Thank you
Hi Janet,
Many thanks for getting in touch. Without knowing your full details (including telephone and postcode) we’re not able to search for you on our system. If you aren’t currently insured with us, we would love to be able to run through a full quote with you. That way you can get a better understanding of exactly what’s covered on the new for old policy.
Our contact centre is open:
8am-8pm Weekdays & 9am-4pm Weekends
Simply call 0800 14 88 400 or 01422 396 769 (Mobile friendly number).
Many thanks
Lucie
Interesting article.
Of course, with inflation at 0%, there is no reason at all that the new for old price has increased. No-one ever pays RRP in any case … and Caravan Guard, with their buying power, can replace a Unit much cheaper than a single buyer.
No need, therefore, for automatic increases in premiums simply because of that fact.
Hi MrRee,
We understand that most people buy used caravans, but when quoting on a new for old basis, we have to refer to the newest value that’s given in the Glass’s guide. Glass’s Caravan Guide provides a benchmark for new and used residual values covering: touring caravans, holiday homes, park homes and motor caravans. If you were given a replacement vehicle in a total loss claim scenario, the price of the replacement would be the same as the new value detailed on the policy.
Many thanks
Lucie
Craig, This is something we’d all like to know. Why not publish the answer ?
Hi Norman,
We prefer to keep customer’s policy details private. In order to provide a cost, our adviser team will have to requote using the new price indicated on the Glass’s Guide. I’m sure Fiona would prefer to keep this information away from the blog.
Many thanks
Lucie
Hi there, just reading the email mag about old for new was wondering we have just renewed out caravan insurance with you his much would it cist to change it old for new ?? Thank you Mrs Fiona Louise Boyle
Hi Mrs Boyle
Thanks for your comment. I’m aware you have spoken to our contact centre and are expecting a call tonight.
Kind regards
Craig