The Right Insurance
What insurance do you need if you want to rent a motorhome in Australia or New Zealand? Is the standard motorhome rental insurance sufficient? Do you need the significantly more expensive full-cover version? What is a liability insurance for? And are the classics, travel cancellation and foreign health insurances always necessary? At this point we want to give an overview of the often-complicated subject of insurances.
Please note that the text below is intended to provide general assistance in choosing the right insurance. It does not replace the individual rental conditions of the rental company.
Insurance Options for Trips to Australia And New Zealand
If you want to rent a motorhome or a camper you have to decide on an insurance option before signing the contract. You can choose between a standard and a full-cover insurance. A look at the price quickly leads you towards a standard insurance, but that is almost always very risky move - at least riskier than customers think. In the standard insurance, apart from damage to the car body, hardly anything else is usually insured. Customers can be held responsible for things they have never heard of before in their life:
Hardly anyone knows the term if they don't work in the industry themselves. But what is really hiding behind this expression? If the vehicle is damaged, it must be repaired at some point. In the event of damage that does not make the vehicle completely impassable, this can happen after the end of your own rental period. For camper / motorhome rental, however, these are days in which the motorhome cannot be further used. If the damage is heavy, a replacement vehicle may be required and for the moment no further rental will be possible. The revenue gap resulting from this drop out is considered the demurrage cost.
If a customer is only protected by a standard insurance, he has to close this gap by himself. This means that he will continue to pay rent for the days the vehicle is in maintenance and repair, even after the vacation is long over. Demurrage costs are not capped. If it is difficult to repair damage, if spare parts are missing and are only delivered after weeks, then it can add up to a sum that exceeds the actual rent of the camper / motorhome. So, we're talking about amounts that can get the customer in real trouble. For this reason, when traveling by camper / motorhome in New Zealand or Australia, we always recommend a full-cover insurance that covers all these costs.
Credit Card Fees
Most camper and motorhome rentals include credit card fees submitted by the rental companies themselves, in addition to bank credit card usage fees abroad. Depending on the bank and credit card, these add up to an additional 2 % till 4.5 % and are collected from the rental company. Of course, this applies to every transaction with a credit card. At the same time, the credit card is often accepted as the only means of payment.
If you book a vehicle with standard insurance, a deposit equivalent of the liability must be paid. This is often an amount of several thousand dollars. The deposit will be debited from your credit card when you pick up the vehicle. If damage now arises, the motorhome rental will keep this deposit. If the tenant`s rental period has not yet expired and he will continue to drive the camper / motorhome or even needs a replacement vehicle, the rental company will collect an additional deposit from the credit card.
This way, various transactions taking place can quickly add up to a few hundred dollars. This can be avoided with a full-cover insurance, because there is often no or only a small liability. The fee for the corresponding transaction is therefore minimal.
Undercarriage, Roof, Windshield and Tires
Damage to these areas, which are susceptible and therefore somewhat rough terrain, occurs frequently and is not covered by a standard insurance. A windshield quickly costs $ 600, a tire at least $ 100 and so on. Therefore, the full-cover insurance pays off quickly. Broken tires and a stone chip in the window are not uncommon on the often-unpaved roads when traveling to Australia or New Zealand.
Further Advantages of The Full-Cover Rental
If you opt for a full-cover insurance, you get significantly more than just a better insurance for your trip to Australia or New Zealand. There are no costs such as the one-way fee, which is otherwise charged if the vehicle is handed over to a depot that does not correspond to the pick-up location. The specification of an additional driver is also an extra that needs to be paid outside the full-cover package, as is the diesel tax for diesel vehicles, GPS, camping table and chairs, BBQ and solar showers. If you don't want to pay for every additional service, you should definitely go for the full-cover insurance, which offers significantly more equipment and additional services depending on the rental company.
In addition, for the standard option, a processing fee (of $ 60- $ 80 depending on the company) is charged for each processing of customer queries.
- No demurrage costs
- No or little deposit, hence little credit card fees
- Damage to tires, windows, undercarriage and roof are (mostly) insured
- Many other services do not have to be paid for in addition to the basic rental price
Liability Reduction Insurance (LRI)
The liability reduction insurance is a third-party service that is intended to be an alternative to the expensive full-cover rental. Why this, however, no longer makes sense is to be explained here.
A LRI is offered in addition to the standard insurance from insurance companies or by some credit card providers. If a customer causes damage that is covered by the standard insurance, the liability reduction insurance takes effect and covers the cost of the liability. There is no liability for damage that is not covered by standard insurance. In this case, the damage must be paid in full by the customer and liability reduction insurance does not take effect.
Since the rental companies earn a lot more on full-cover rentals, they are very interested in not making them irrelevant by the possibility of a liability reduction insurance. Therefore, the conditions of the standard rent have been continuously adjusted. In the past, the two types of insurances differed mainly in that the standard insurance has a liability, while this was no longer the case in the full-cover insurance. With a liability reduction insurance, you had a cheap solution to avoid the full-cover rental with the same service. To counteract this, more and more services were removed from the standard rental, so that there is now hardly any damage that would be covered here. As a result, there are evenly few liabilities that are covered by liability reduction insurance.
In the end, you pay a daily rate for the liability reduction insurance, while having minimal insurance coverage (in the best case, undercarriage of your own vehicle minus processing fees and demurrage costs) but imagining to be on the safe side... Therefore, we explicitly recommend the full-cover insurance, which is the only option for us to represent carefree travels!
Health Insurance for Trips to New Zealand
In New Zealand, everyone, whether local or tourist, is insured through ACC (Accident Compensation Corporation) if an accident has occurred. It doesn't matter whether it is a work accident, a traffic accident or a sports injury. ACC will cover the cost of treatment in government facilities. However, the follow-up costs such as travel cancellation, return flight home or the flight of a relative to New Zealand are not covered.
Since ACC assumes all costs on site, a legal action regarding any financial compensation payments against the person who caused the accident is legally excluded.
ACC does not pay for illness. You should therefore carefully consider whether you would like conclude an additional foreign health insurance. If, for example, you become seriously ill during your travels (i.e. with a meningitis or an appendicitis), such insurance can be useful. However, most foreign health insurance policies have a liability that needs to be payed per treatment out of one's own pocket.
Is the liability i.e. as high as € 50, it may be that you have to go to the doctor 10 times due to severe illness. Each individual treatment may cost only € 40. In total you paid € 400. But you get nothing reimbursed because the 50 € liability for the individual treatments was never exceeded and in addition, you are forced to pay for insurance costs. However, there are also offers without this liability. If you are dependent on care in a hospital or even have to undergo surgery, you can face enormous costs without an insurance. We therefore always recommend choosing an appropriate travel insurance before starting your journey.
International Health Insurance for Trips to Australia
There is no health coverage comparable to New Zealand's ACC in Australia. The injury protection offered by the state is significantly more limited. In addition, benefits vary from state to state. Therefore, as a tourist, one should not count on government aid and include this in considerations for a foreign health insurance.
A liability insurance must be signed for every car and camper / motorhome registered in Australia. For rental vehicles, this has already been processed by the rental company. This insurance is liable if you cause an accident yourself and the opponent is injured. If you are injured even in a self-inflicted accident, the liability insurance of the vehicle does not pay though. Without your own insurance cover, it can get really expensive. In Australia, too, we strongly advise you to pick your own travel insurance.
Travel Cancellation Insurance for Trips to Australia and New Zealand
With a trip that causes comparatively high costs, a travel cancellation insurance is always worth considering. Travelling to either Australia or New Zealand is never really cheap because the flight alone sums up. We think a cancellation insurance makes sense, especially for families. However, you should always find out exactly in which cases the insurance pays. Because here, too, the costs will only be defrayed if there is a just cause.