Caravan Club Non Insurance Policy

The club did not cover insurance payments previously they were covered by an insurance company. Devitts handled claims on the behalf of that insurance company following the insurance companies direction. The changes happened about 12 months ago. Devitts are still handling claims but on behalf of CMC and following CMC's guidelines who are the ones to finally authorise payment. 

The club do no longer pass insurance business to an insurance company but instead offer 5Cs etc as cover but not insurance other than legal cover if you choose it. 

The changes happened a little over 12 months ago and only applies to caravans as other cover for houses, motorhomes et al are passed to a proper insurance company - not a mutual

 .it would be good if there was a clear and open statement addressing any concerns around some of the terminology in the documents.

agreed, and if the club want to protect a valuable revenue stream then they should certainly aleviate the concerns of members, personally i trust my OH but i know not all members have ex insurance brokers to hand. 

It's not so much the caravan value side that would worry me but the third party liability, which could potentially be an eye watering sum, if the worst happened.

Exactly my concern should the CMC refuse a third party claim. The loss of a £25k caravan would not really affect my lifestyle. A lost court case could bankrupt

Hi everyone, Just to let you know I have forwarded this discussion to my colleagues on the insurance team today so we can provide you with further information. 

I thought it was not an insurance policy and is not regulated as an insurance policy so why is it sent to an insurance team?

The team I would think are responsible for all policy types 

Rowena, Can you please ask your colleagues to confirm whether this cover will not require the payment of 12% Insurance Premium Tax and if so whether HMRevenue and Customs have agreed to this tax avoidance. 

Have you read the T&Cs

Hello everyone,  

Below is a response from the Club that hopefully covers off the many points that have been queried or raised in this discussion.

The Club moved from Caravan Insurance to Caravan Cover on 1 March 2018. At that time the Club made no changes to the terms and conditions that had been in place through the insurers but brought the product in-house within a discretionary mutual scheme. For a discretionary mutual to apply only members of the Club can have the product. Discretionary mutual schemes operate in the same way as with the principle of insurance, which is that everyone purchasing the product pays their premiums, from which claims are paid for the few who are unlucky enough to need to make a claim.

The reason for the change was to enable us to become more flexible for members and also to help us to make more money from a shrinking and increasingly competitive market. As all money that is made goes straight back into the Club to deliver sites and services for our members, this revenue is extremely important to members of the Club. By operating a discretionary mutual the Club are also able to pay claims that are not always covered in the cover wording. We exercise our discretion where insurers may not i.e. we can be more flexible. It is certainly not our intention to not pay claims and our current paid rate remains in line with what it was before the change.

To make sure the Club is able to pay out claims should these be more than the premiums collected, an insurance policy was taken out to protect members. The Group Policy that has been taken out with Builders Direct SA is wider than simply protecting members should the Club not have enough money to pay a claim. If the Club does not pay a valid claim, Builders will pay the claim. Having the Group Policy also means members can go to the FOS if a claim is not paid.  

The Club itself continues to be regulated by the FCA and the Caravan Cover is subject to the Financial Services and Markets Act but Caravan Cover is not a regulated product within the FCA’s remit. Other Mutuals such as NFU and LV operate under registered insurance companies (note the general insurance arm of the latter will have become part of Allianz by the end of the year). This allows them to provide motor insurance products, which are a legal requirement. Other types of cover such as cover for caravans, homes, pets, travel are not legally compulsory and therefore can be covered under different structures to insurance, such as a discretionary mutual.

Since going live with the Caravan Cover product we have updated the cover wording twice. The first change, effective 1 March 2019, was to put the two cover options into the one cover booklet, which we did so members can see the alternative cover that is available and to reduce costs. The second update was to improve the clarity of the wording in some places, including around the discretionary mutual. We are continuing to look at how we can make more improvements to the cover and underwriting. While we are unable to now get a Defaqto rating because that only operates within the insurance space, the 5Cs product was 5* rated and we continue to ensure our Caravan Cover product meets that level of criteria. The Club continues to offer a no claims bonus on its Caravan Cover product.

Regarding the concern around acceptance of Caravan Cover by storage facilities or HP companies, the Club would be happy to pick this up directly with companies if there are any with concerns, as the cover should meet the needs of these companies.

In respect of the issue with the email addresses the documentation is being sent from, we are working to change all of these to cover@camc.com; however due to the system update to improve the booking process some of these could not be done until that has gone live and bedded in. We hope to have all email addresses changed within the next few months and apologise for the confusion this has caused some members.

And finally, regarding the HMRC point raised, we have recently had a tax inspection and the HMRC are aware the caravan cover is a discretionary mutual scheme.

We hope this answers the questions and concerns being raised but please do get in touch directly with the Club if you have any specific queries.

Hi Rowena

A quick question about the no claims bonus, if we were to switch to a true insurance company, would they accept we had a good record with a company that provided cover rather than insurance?