08 August 2024
What insurance do I need to rent out my campervan?
5 minutes
Renting out your campervan is a great way to offset the costs involved in owning one. Campervans are typically quite expensive, both in terms of the initial outlay and their ongoing maintenance and storage. Since it’s not typically the kind of vehicle you use all the time, handing the keys over to other holidaymakers can help to cover these costs. But first you’ve got to ask yourself: what insurance do I need to rent out my campervan?
Here, we look into the specialist campervan insurance you’ll need to protect your home on wheels when you rent it out.
Firstly, can you hire out your own campervan?
Yes, you certainly can rent out your own campervan. Whether you decide to do so, however, is a very personal decision.
While some people see the financial advantages in renting out their campervans, others focus on the risks involved. Here are some of the pros and cons to keep in mind as you weigh up your options:
Pros:
- Additional income: Renting out your campervan can provide a steady stream of extra income. This can help to cover your insurance, maintenance, and storage costs.
- Regular use: Instead of letting your campervan sit idle during periods when you’re not using it, renting it keeps everything ticking over. This can be good for the vehicle’s overall condition.
- Flexibility: You can hire out your campervan on your terms. It’s totally up to you who you rent it to, when, and for how long.
- Meeting new people: Renting out your campervan allows you to meet new people and share your passion for travel and adventure. If you have a particularly nice campervan, or know certain areas well, you might earn yourself a reputation for offering a good service.
Cons:
- Insurance costs: Obtaining the right insurance for renting out your campervan can be more expensive than standard coverage. On top of this, managing claims and potential disputes with renters can be challenging.
- Wear and tear: Renting out your campervan causes increased wear and tear. This can result in higher maintenance and repair costs over time.
- Time and effort: There’s a fair amount of time and effort involved in managing the rental process, including handling bookings, maintenance, cleaning, and customer service.
- Risk of damage: There is always the risk that renters may not treat your campervan with the same care as you would.
If you do decide to rent out your campervan, here are a few things you need to keep in mind:
- Your campervan has to have the proper hire insurance in place (more on this in a moment)
- It has to meet all applicable safety standards — like any other vehicle, you have to have to MOT your campervan
- It’s a good idea to have a rental agreement in place that outlines the terms and conditions of the rental, including responsibilities for damages, mileage limits, and other relevant details
What insurance do I need to rent my campervan out?
Ok, let’s take a look at the insurance implications. What type of insurance do you need to have in place in order to rent out your campervan?
It’s important to note that standard campervan insurance typically doesn’t cover rental activities. This means that you can’t simply give the keys to someone — not even a family member or friend — and assume that you’ll be properly covered. If in doubt, read your policy document, call your insurer, or speak to an experienced broker.
More often than not, you’ll need a specialist insurance policy that’s specifically designed for hire purposes in order to rent out your campervan. Your new policy should include:
- Commercial hire insurance: This is essential as it means that you’re allowed to rent out your vehicle in exchange for payment. It protects against claims made by renters and covers your vehicle while it is being rented out.
- Comprehensive cover: Comprehensive insurance covers you against damage to your vehicle, whether from accidents, theft, or vandalism. It also covers third-party liability, which means that you’ll be protected if your campervan causes damage or injury to others.
- Public liability insurance: Public liability insurance covers you against claims made by third parties for injuries or damages that occur while your campervan is rented out. It's crucial for protecting against potential lawsuits.
- Contents insurance: This will cover the contents inside your campervan. This is important in the event that your belongings are damaged in an accident or break-in.
- Breakdown cover: Offering roadside assistance and recovery services ensures that your renters won’t be stranded if your campervan breaks down. This can enhance the rental experience and provide peace of mind to both you and your renters.
The most important starting point is to inform your insurer or broker that you want to rent out your campervan. They can assess your situation, and let you know what your options are.
How much money can you make renting out a campervan?
Campervans have been a popular way to travel across the UK and the continent for some time — a trend that’s showing no signs of slowing down.
In its 2023 Leisure Vehicle Survey, the Caravan and Motorhome Club found that people are more satisfied with caravans, motorhomes, and campervans than they were previously. And that they’re spending more time in them, both in the UK and overseas. According to the study, 70% of campervanners and motorhomers spend over 21 days touring.
Add to this the popularity of “van life”, the rise of staycations amid the cost-of-living crisis, and an ongoing remote working culture, and campervans are likely to be in demand for some time.
So, if you have a campervan sitting in storage, how much can you likely make renting it out?
The total tally will depend on several key factors, including:
- The type of campervan you own
- Its age, size, condition, and on-board amenities
- It’s location
- The demand for campervan rentals in your area
- When you want to use it versus when you’re open to renting it out
During summer and other peak times of year, like school holidays and long weekends, you could make between £400 and £1,100 a week renting out a two-berth campervan. In the off-peak periods, you’re likely to make between £300 and £900 a week.
Remember, though, that you’re more likely to want to use it yourself over the summer and holiday periods. Be sure to factor this into your estimates.
Do I pay tax if I rent out my motorhome?
Yes, the money that you earn from renting out your campervan is subject to tax.
When you file your tax return to HMRC, you will have to declare the income you have received during this process. It’s classified as rental income, and you are required to pay tax on the profits, after deducting allowable expenses. Allowable expenses can include insurance costs, maintenance and repair expenses, advertising fees, and any other costs that are directly associated with renting it out.
Make sure you keep detailed records of all your campervan rental income and expenses during the year. Chat to a tax advisor to make sure that you’re complying with HMRC’s regulations when you submit your return.
Quickfire summary
Renting out your campervan can help to cover some of the costs of owning, maintaining, and storing it. However, you need to ensure that you have the right insurance in place. Standard campervan insurance typically won’t cover the rental of your campervan, though your insurer or broker will be able to confirm this.
To ensure you’re properly protected, you’ll need to have specialist rental insurance in place. Your cover will need to include commercial hire insurance, comprehensive insurance, public liability insurance, contents insurance, and possibly breakdown cover. Your broker will be able to assess whether there are any other types of insurance you might want to add on.
Start by informing your insurance broker of your intentions to rent out your caravan. They’ll be able to look at your unique circumstances and let you know what your insurance options are. The team at Howden can help you rent out your campervan today — contact us for help.
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