Caravan on Finance. Will Insurance Pay out

I think you will find that part of the credit t&c's is that you do insure your caravan, until you have paid or part of your loan the van belongs to your lender you would be responsible for the insurance So yes insure it ! Think about it if you have a mortgage on your house the lender requires you to have insurance, same with a loan on cars caravans motor homes etc

I too would expect it to be a requirement of the finance.  If there is cause for a claim the insurers will contact the finance people regarding outstanding amount and settle with them and yourself, if necessary,  Good practice to insure it anyway unless you're happy to write off the cost of the caravan once it's all yours.