Insurance considerations for private motorhome hirers

If you are one of the many people who own a motorhome and decide to “rent it out” to make a bit of extra cash, you should be aware of the following considerations regarding your personal insurance for your motorhome when you hire it out.

In 2006 I owned one motorhome and occasionally hired it out through a Booking Agency. They provided me with the booking, basic documentation and also the comprehensive hire insurance for the hire period. I was informed that this was a seperate insurance and would not effect my own insurance for the vehicle.

I hired out my motorhome during 2006 without any problems.

In 2007, I decided to purchase another motorhome with the sole intention of renting it out on the same basis as the previous year.

I contacted my personal vehicle insurance company and requested another motorhome to be added to my policy. They asked why I had 2 motorhomes, and I told them that I intended to hire one of them out. They then declined my insurance and cancelled my existing policy. I then  had no insurance cover for me to drive my own motorhomes!!!

I contacted my Booking Agency and was informed that I should not inform my insurance company that I was hiring out and not to inform them of anything, unless they asked me directly. I thought that this advice was, to say the least, really, really dodgy,

I then contacted about 20 well known motorhome insurance companies and explained my full intentions to them, and not one of them would provide me with personal insurance for my motorhome(s). Hire insurance was not a problem - to allow hirers to drive my motorhomes, but I could not obtain personal Social, Domestic and Pleasure (SDP) cover to enable me to drive my own motorhome in my own time.

I requested to speak with an underwriter at one of the companies that I contacted, and he provided me with the reasons why their company could not provide me with a SDP comprehensive policy for my motorhome(s):

Firstly, all policies have standard wording to prevent the use of the motorhome for “hire or reward”. This is because if it is hired, it will have a seperate policy governing the hire, and at the same time will have a personal policy for the owners use. In the event of an accident, two insurance policies will cover the same vehicle at the same time, and this could lead to problems concerning who is responsible for the repair of the vehicle, personal injury and subsequent loss of earnings. This is known in the insurance trade as the “Dual Insurance” problem.

I was informed that one of the ways to prevent this problem was to obtain personal vehicle insurance from the same company that provide the hire insurance, so when the vehicle is on hire, only one insurance company will have responsibility for it in the event of an accident thus negating the dual insurance problem.

Another way to prevent the dual insurance problem is to obtain your own commercial policy for your motorhome. I use an insurance broker called Alan Boswell Insurance (http://www.alanboswell.com/) for my policies. They charge between £1600 - £1900 per year for a commercial policy for a single motorhome. This allows me to drive it as well as hirers. This is however the expensive option.

I am involved in the operation of Motorhome City (www.motorhome-city.co.uk), a booking agency for private motorhome owners, who have taken this issue to heart and have came up with a solution to the problem of dual insurance. In conjunction with the underwriters of our commercial insurance company (Highway Insurance), we spent a good deal of time on the wording of our Terms and Conditions of Hire document - the main contract between the owner and the hirer of a motorhome. The first paragraph of this document imposes an agreement between the owner and hirer that in the event of an accident or reportable event, then the hire insurance company has sole responsibility when the vehicle is on hire. This condition is pertinent to both the hire insurance company and the owner of the motorhome, with regard to their personal vehicle insurance.

Motorhome City has taken this issue very seriously (as shown above). It would not provide bookings for owners if it impinged on their own personal motorhome insurance. You do however have to accept bookings with us in order to use our personalised Terms and Conditions. It is free to join us and you can leave at any time.

I must point out that you may still encounter minor difficulties when dealing with your own insurance company when you (properly) inform them that you may occasionally hire out your vehicle. You will be dealing with call centre operatives who are constrained by by the restrictions of the information on their computer screens as well as their training in these matters. You may need to request contact with a supervisor, or even an underwriter in order to show them that the hire insurance company have agreed to a legal document that prevents the dual insurance problem arising from your hire of your own motorhome.

I hope that you find this blog informative. It effects every motorhome owner who wishes to hire out their motorhome or camper and has serious implications for their own insurance policy for the vehicle.

At Motorhome City we have resolved this issue, and as well as providing some of the best rates available for owners, we hope we provide a high level of assistance to owners who just wish to make a good few thousand pounds every year from the rental of their pride and joy.

If you would like more information of how to make serious money from the hire of your motorhome, please visit http://www.motorhome-city.co.uk/earn.htm for more information.

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