The recent flood event in Queensland and NSW has left devastation across many areas. Caravan owners that have lost their RV in the floods are likely to have many questions around what to do and will happen in regard to their caravan loan. If a caravan under finance has been damaged or written-off due to the flood and an insurance claim is being made, there are steps to be taken in regard to the caravan loan.
We address a number of key areas in regard to both handling the caravan loan while the insurance claim is being processed and how owners can go about sourcing finance to quickly replace their caravan with a new RV.
Making Contact with the Lender
When a caravan is purchased with a loan it is referred to as being ‘under finance’. With a secured loan, the lender will register their interest in the goods with the PPSR. The PPSR is a registry of security over personal property.
When goods under finance are lost or written-off such as in the event of a flood, the loan holder should contact their lender as soon as possible. Jade Caravan Finance is accredited with many non-bank lenders and the major banks. If you arranged your caravan finance through us or through another finance broker, it is the actual lender you need to contact rather than the broker.
Many lenders are currently offering personal loan relief for flood victims. This may apply to you but it will depend on individual circumstances.
Impact on Caravan Loan Repayments
When making an insurance claim for a lost or written-off RV, loan holders are still responsible to meet their caravan finance repayments. Which is why it is very important to contact the lender. When speaking with the lender, loan holders may ask for repayments to be paused during the process as the insurance company will be making the payout. If a pause cannot be arranged, it is important that the repayment schedule be met in order to avoid negative impacts on the credit profile.
When taking out finance to purchase a caravan, lenders will require their customers to also take out an insurance policy to cover the goods being financed. When the caravan is damaged or in the case of say a flood, totally destroyed, owners should contact their insurer as soon as possible.
Individual insurers will have their own processes for lodging and processing claims. With the large number of claims currently being lodged due to the widespread flood damage, insurers are busy so patience may be required.
One issue which may be concerning some owners is if everything that was in the caravan at the time and is also now destroyed will be covered by insurance. This will depend on the details of the individual policy which was purchased.
The lender will only require that the actual RV be covered by insurance to the value of the goods. Including any contents will be a matter for individual caravan owners. If accessories and options were purchased with the RV and included in the caravan finance, then these should be covered.
For specifics, owners will need to check their individual policy and discuss this with their insurer. When purchasing a replacement caravan, this is an aspect that should be kept in mind.
Impact on Credit Rating
Another important issue is the impact on a personal credit rating or profile as a result of an insurance claim being made on a caravan under finance. In order to maintain a good credit profile, individuals must maintain their caravan loan repayment schedule.
When repayments are not made, that is when the potential for a negative entry on a credit report can arise. This is why contacting the lender is important. The actual process of claiming insurance should not in itself have an impact on a credit score.
The insurer should be finalising the amount owed on the loan with the lender and in so doing, the debt will no longer be listed on the credit profile.
A major issue for many people affected by floods is losing all their documents and paperwork. In this instance, contact the lender and the insurer and they should be able to work through these issues with you.
Sourcing Finance for Replacement Caravan
Many caravan owners will no doubt be keen to replace their RVs as soon as possible. It may be required as a temporary home while repairs are carried out on a damaged property or to continue with holiday and travel plans.
Jade Caravan Finance can get started with a new caravan finance application even while an insurance claim on the previous RV under finance is being processed. When an application is being assessed, lenders will see that the individual already has a caravan loan but our consultants will advise our lenders that that particular loan is the subject of an insurance claim.
The interest rate on the new caravan loan will be based on the rates available at the time of application. This may be a different interest rate to the loan on the previous caravan depending on how long ago the existing loan was arranged.
To compare caravan finance interest rates, simply use our caravan loan repayment calculator which lists the types of loans and rates offered by a number of lenders.
Relieving the Stress
We fully appreciate the stress and worry that flood victims endure at these times. Our comprehensive caravan finance service will handle the entire finance process on your behalf to secure your new loan to purchase your new RV.
Losing a much-valued caravan due to flood, accident or other circumstances can be devastating. But in regard to caravan finance, by following these actions, the issues should be resolved in a straightforward manner so you can proceed to purchase your new RV.
Contact Jade Caravan Finance on 1300 000 003 for a caravan loan quote.
DISCLAIMER: THE DETAILS AND INFORMATION IN THIS CONTENT ARE PREPARED AND PRESENTED PURELY FOR INFORMATION AND NOT INTENDED IN ANY WAY AS THE SOLE SOURCE OF FINANCIAL ADVICE FOR CARAVAN PURCHASING. IF ADDITIONAL FINANCIAL ADVICE IS REQUIRED, READERS SHOULD REFER TO A FINANCIAL ADVISOR. NO LIABILITY IS ACCEPTED FOR ANY ERRORS, PRODUCT DESCRIPTION VARIATIONS, OR OTHER MISREPRESENTATIONS OF INFORMATION AS PRESENTED.