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News for December 8, 2022

Australian Caravan Parks Feel Uneasy As Insurance Premiums Continue To Rise

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Caravan park representatives believe that more effort is required to improve the issue of insurance accessibility, as companies are struggling to cover the cost of premiums that have risen dramatically.

Caravan parks and the wider tourism industry have faced increased strain on insurance availability as the difficult effects of the current market continue to be felt, according to a news report by insuranceNEWS.com.au.

Caravan Industry Association of Australia CEO Stuart Lamont said annual premiums for caravan parks have increased across the nation, with many facing the possibility of being uninsured.

He added that it hasn’t been unusual to see premiums rise five times over if insurance is offered. The issue lies in “both affordability as well as accessibility” and comes from insurance companies that are hesitant to enter the market.

Caravan parks have been the victim of an inability to comprehend the product from many international insurers that are more selective with the composition of their portfolios.

Lamont explained that the problem is more than just caravan parks with tourist operators and sporting clubs, accommodations homes, amusement parks, experiences, and events also being hit. The sector, in general, has been the victim of apathy due to a perception of risky places and activities.

Oracle Group Insurance Brokers MD Matthew Denehy said it has been “impossible” for uninsured caravan park owners to secure insurance. The insurers are renewing their policies but are not accepting new business.

The current policies have resulted in 20% to 60% increases based on the park’s size, and high-risk areas have become increasingly difficult to cover.

Denehy claimed that some insurance companies have decided to exclude cyclones completely. It is impossible to obtain flood coverage if the business is in a flood zone. If you’re in a zone of bushfire, the insurance premium is a 40% increase and an excess of AU$50,000.

He is concerned that the high costs are “becoming the new norm” and will drive mom and dad’s businesses out of the market.

He also said that large parks could use their size to gain coverage due to their capacity, cash flow, and capacity to achieve that. The average mother and dad who run these smaller parks aren’t able to.

The Insurance Council of Australia (ICA) stated that the caravan park industry is one of the most impacted sectors in today’s market.

The growing frequency and scale of claims caused by flooding and cyclones have increased prices and made the insurance market ineffective over time. The gradual introduction of facilities that pose a greater risk of insurance, like inflatables and pools, has added to the risk of this industry.

Lamont noted that several businesses had established “good disaster management” to reduce losses caused by natural disasters. He is also looking at ways to “change perceptions positively” towards caravan parks.

The industry has been in contact with brokers and insurers along with the ICA to increase insurers’ confidence that they can offer cheap insurance policies. However, he warns that some options may not be fast enough.

As an organization, they are developing existing accreditation frameworks that provide specific guidance on traditional infrastructure profiles and provide insurers with real-time information on continuous monitoring and reporting.

Lamont suggested a model of cooperation that includes insurers and industry is being considered to ensure that insurers have an understanding of how each site can be assessed rather than being a blanket exclusion due to their class.

He said the clock is ticking, and a general-based solution might not be available on time for certain operators who must decide to self-insure, shut their doors or take down crucial infrastructure pieces that will be attractive to visitors.

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Hi, you might find this article from Modern Campground interesting: Australian Caravan Parks Feel Uneasy As Insurance Premiums Continue To Rise! This is the link: https://moderncampground.com/australia/australian-caravan-parks-feel-uneasy-as-insurance-premiums-continue-to-rise/