Australian Caravan Parks Face Growing Insurance Crisis

A growing insurance crisis is threatening the future of caravan park holidays in Australia. 

Owners of caravan parks are struggling to find insurance coverage for their businesses as insurance companies increasingly decline coverage due to a scarcity of global insurance market capital, according to a report by 9 Now Australia.

April Whiston, the owner of Lakes Bushland Caravan and Lifestyle Park in East Gippsland, is one of many park owners facing this challenge.

Whiston has been denied coverage by 14 different insurance companies without any explanation. This issue is widespread, impacting hundreds of caravan parks across Australia.

Asset protection insurance is crucial for caravan park owners, as it covers a range of incidents that could occur on their properties, beyond natural disasters like fires and floods. Without insurance, park owners would need to cover any accidents out of pocket, which could significantly impact park residents and the broader community.

The Insurance Council of Australia (ICA) attributes the insurance crisis to increased claims due to extreme weather events. These incidents have raised costs and rendered the insurance market unprofitable for the caravan park sector. 

In response, the ICA has been working with insurers, brokers, and underwriting agencies to improve insurance affordability and availability.

However, David Hosking, director of Grampians Insurance Brokers, believes that insurance companies are unfairly applying a blanket ban on all caravan parks instead of individually assessing their risks. 

“They’re not differentiating between parks,” Hosking said, highlighting that urban parks and those in national parks present vastly different risk profiles.

Caravan parks are a significant contributor to Australia’s tourism industry, and their closure could have a detrimental impact on the economy. The Victorian Caravan Parks Association has been working with its national body and state associations to lobby governments to intervene in the insurance market.

Some industry stakeholders are requesting that the Victorian Managed Insurance Authority (VMIA) provide coverage for quality risks. Despite the VMIA’s role in offering insurance products when the market has collapsed or when coverage is difficult to obtain, the authority has denied the request.

As caravan park owners and campgrounds across Australia face uncertainty, the industry continues to engage with government authorities, insurance companies, and associations in the hopes of finding a sustainable and practical solution to the insurance crisis.