Campervan Insurance Can be Different - Do you TRULY know what you are getting?

From all the comments we get on the website from past users, insurance seems to be a big thing that people get concerned about. I thought I'd give you a quick run down on the basics of campervan and motorhome insurance options.

The Deposit Bond Can Be As Much As $8000 Out Of Your Pocket

Most of the campervan rental companies require you to debit the full amount of the bond from your credit card when picking up the campervan. This can be has high as $8000 for a 4wd vechicle, about $7500 for most vehicles but can go as low as $5000 for some of the discount companies. They will provide an option for you to reduce the bond amount by taking out additional insurance packages, but if you don't take one of these, you will actually have the full bond amount taken off your card - you can't use it during your travels. Additional to that, there will be an 'admin' fee that will cover the cost of the credit card fee from the bank and in some cases, like Diners Club or American Express, be well in excess of the fees actually charged by the bank - this is non-refundable fee. So taking a standard $7500 bond with a 2% fee means $7650 is coming off your credit card and $150 of it is never coming back.

Options to Reduce the Bond

Normally the campervan hire company will provide 2 tiers of options to reduce the bond. Now you know you are already up for an additional $150 non-refundable admin fee on the full $7500 bond so reducing the bond might be worth it depending the length of the journey. The cheaper package will normally reduce the excess (and therefor the bond) to around half to 1/3 of the original amount and the more expensive option will reduce your bond to around $500 or nothing. This is not an unusual system, most car rentals around the world will do it, but in the campervan world you are looking at approx. $30 per day for the first option to get the bond down to around to $2500 and $45 per day to reduce the bond to between $500 and nothing and simply take an imprint of the credit card. No car company in world will charge that for insurance! Sometimes the campervan is only costing $50pd anyway, so you can almost be doubling your rental cost.

3rd Party Insurance

There's always the option of taking out 3rd party insurance or maybe your travel insurance has hire vehicle excess included. This is great news. What this will mean is that if you crash and didn't buy extra insurance with the campervan rental company, your 3rd party insurer will pay the excess required by the rental company back to you. DOWNSIDE: First, by not taking out the extra insurance with the campervan rental company, you will have to cash up the $7500 bond and get charged a $150 admin fee. Next, if you stack the campervan, the hire company will keep all that money until such time they say they know the full cost of the repairs, which miraculously come in at $7500 or more. So you will be putting in the claim to your travel insurance for the fact that the campervan company kept all the bond money, but in my searching around I can't really find a 3rd party campervan that insure an excess for hired vehicles beyond $6000, so you are still going to be out of pocket approx $1500. Like all things, there are plenty of deals out the market so shop around for 3rd party companies that will cover your rented campervan experience.

Every Company is Different

All these numbers change as you move between companies. The numbers here are based off the 2 largest campervan rental companies is Australia that between their various fleets account for about 80% of rentals in Australia and New Zealand. The numbers get smaller as you start renting with companies that deal with the budget and youth markets, but at the same time the quality of the campervans rented also diminishes.

Getting the Bond Back

Even if you don't have any kind of accident with your campervan while it is under hire, there is now an unfortunate reputation that the bond doesn't come back on to your credit card as quick as it went off it. In general, don't expect it back for 2 weeks. The legitimate reason for this is that you may have incurred speeding fines or road tolls on your trip. In this modern age of cameras everywhere you're photographed registration plate means the fine will make its way to the head office of your campervan rental company. They are holding on to your bond to allow for this process to take place and so they can take the money out of your deposit both for the fine and the admin fee they are going to charge you for them having to pay the fine on your behalf. This is fair enough, it is unlikely they are going to get the money out of you any other way and cops don't just let them off because it was a renter driving it, the company will still have to pay the fine as owner of the camper. Now, the unfortunate word that we hear about here is that the bond takes more like 4-5 weeks to come back and that the less legitimate reason is so that the campervan company can sit on the money and earn interest. We're not saying that we agree with this aspersion, but there is a lot of chatter about it. Anyway, be prepared to be without your money for quite a few weeks after you return the campervan.

Conclusion

The insurance system is not geared in any way to favour the renter. The excess reduction packages will strike most renters as highly priced and a money grab after backing the renter into a corner if they don't have $7500 cash to spare. The amount of coverage is limited even if you do take it out and there are often caveats on how to campervan company can get out of it. However, each campervan hire company's specifics are different so make sure you READ THE TERMS AND CONDITIONS of your chosen company. Personally I like to have additional coverage in the form of travel insurance that has hire vehicle coverage. After that I still do take out the excess reduction of some sort most the time mainly because I don't want $5000-$7500 of my money sitting with someone else for 2 months hoping that one day it will find its way back to my account. But the best advice out of all this is DON'T CRASH THE CAMPERVAN :-)