When you’re getting quotes for touring caravan insurance, you’re given two types of cover to choose from: Market Value and New for Old. I’ve seen a lot of people asking what New for Old caravan cover is, so I decided to write this blog post answering the question.
New for Old cover is a type of touring caravan insurance. If your caravan is insured on a New for Old basis and you make a total loss claim — e.g., if it’s stolen or damaged beyond repair — you will receive a like-for-like new equivalent. The alternative is Market Value cover, which only pays out the current market value of your tourer.
If something happens to your caravan and you need to make a total loss claim, you’ll get the brand new equivalent of your tourer if it’s insured on a New for Old policy. The alternative is Market Value cover, which insures your tourer for its current market value. In this case, you will be given the current market value for your caravan at the time the loss happened.
In this blog post, I’ll explain a bit more about how New for Old cover works, why you should choose New for Old cover — and why it might not be the best option for you — as well as some caveats to consider.
What Does New for Old Caravan Insurance Mean?
When getting quotes for caravan insurance, there are two fundamental cover types to choose between:
- Market Value
- New for Old
If you’ve just purchased your first touring caravan and you’re setting up the insurance now, you’re probably wondering how the two differ. As part of our Caravan Guard Q&A — which you can read in full by clicking here — we had the opportunity to ask Liz Harrison, Caravan Guard PR & Communications Manager, this question. Here’s what she said.
“New for old cover means that if your caravan was stolen or damaged beyond economic repair, also known as written off, you will be able to get a brand new caravan of the same or equivalent specification. A Caravan Guard caravan insurance policy offers new for old cover for caravans up to 15 years old. You must insure your caravan at the value it would cost to replace it with a new equivalent model, not its current value.
Market value cover means that if your caravan was completely damaged or stolen you will be given the current market value of the caravan at the time the loss happened.”
So New for Old is essentially what it says on the tin — a brand new caravan if something happens to your old one.
On the other hand, Market Value cover simply pays out whatever your touring caravan is worth at the moment of the total loss claim.
When choosing between the two types of caravan insurance, there’s one big question that most people ask: is New for Old caravan insurance worth it? To answer this question, there are a lot of points to consider:
- How often do you use your caravan?
- Would you want a brand new replacement if something happened to it?
- How much are you willing to pay for insurance?
People always ask how much Market Value and New for Old insurance premiums differ. Is New for Old always a lot more than Market Value, or is there little difference? In fairness, that all depends on the age of your caravan. If you have an old caravan, New for Old will be significantly more costly than Market Value cover. That being said, there won’t be much of a premium difference if your current caravan is relatively new.
To try and demonstrate the difference in price, I decided to get some insurance quotes for one caravan in particular — the Coachman VIP 460 (2013) — to see how the cost differs. The results of my research are below.
Research: How Much Does The Type Of Cover You Choose Affect Your Insurance Premium?
To try and demonstrate how much your premium can change depending on the type of cover you choose, I used price comparison tools to get quotes for the Coachman VIP 460 (2013).
The only piece of information I changed for these quotes is the type of cover required and the value of the caravan (if you choose New for Old, you have to set the value of your caravan as the cost of the closest new equivalent). Here’s what I found.
New For Old Quotes
After entering all my information, I had a large number of quotes to choose from. In the table below, you will see the five cheapest quotes that I was offered.
The figure given is the annual premium. If you choose to pay monthly, you’ll pay a greater amount overall. To find out how that works, please read my post tips for reducing your caravan insurance premium. For that post, I researched how different the cost was on average depending on whether you pay for your insurance annually or monthly.
| Insurer #1 | Insurer #2 | Insurer #3 | Insurer #4 | Insurer #5 |
|---|---|---|---|---|
| £353.65 | £367.59 | £407.83 | £455.89 | £534.05 |
As you can see in the table above, the cheapest quote I was offered is £353.65 (annual premium). If I chose to break this down into monthly payments (as most people do), it would be £38.90 monthly, equalling a total premium of £466.80.
Before we directly compare the two, here are the quotes I got for Market Value cover.
Market Value Quotes
The market value of the Coachman VIP 460 (2013) is obviously much lower than the cost of a newer equivalent.
I had a look at a few dealers and worked out the market value to be around £14,000, hence the change in value above.
Again, I had a large number of quotes to choose from. Again, the table below shows the 5 cheapest quotes that I received.
As with the New for Old cover type quotes, the figure given is the annual premium.
| Insurer #1 | Insurer #2 | Insurer #3 | Insurer #4 | Insurer #5 |
|---|---|---|---|---|
| £203.76 | £220.88 | £232.51 | £258.71 | £294.55 |
As you can see on the table above, the cheapest quote I received was £203.76 if you pay in one payment. If you split it into 12 payments, it costs £22.41 per month, equalling a total cost of £268.92.
Let’s directly compare the New for Old and Market Value quotes.
New for Old v Market Value Cover: Direct Price Comparison
After getting quotes for the two types of caravan insurance, I compiled them to create a comparison. The comparison is what you see on the graph below.
As you can see on the graph, New for Old cover is significantly more expensive than Market Value cover — although that all depends on the age of your caravan. This is predictable, considering the significant variance in value between a second-hand and brand new caravan, particularly in this example where we’re looking at a caravan that’s a few years old.
That wraps up our blog post! Hopefully you have a really good idea of how New for Old caravan insurance works now.
