Caravan parks occupy a strange place in the national psyche: part working-class rite of passage, part grey-nomad pilgrimage, part school-holiday pressure valve for families watching the cost-of-living. They are also, increasingly, a frontline risk for Australia’s insurers - perched on coasts, rivers and in bushland corridors that travellers seek out precisely because they are beautiful, exposed and close to nature.
In that exposure sits a growing insurance problem that brokers, insurers, regulators and governments keep circling but haven’t solved. Like many nat cat threatened properties and businesses, the soft market hasn’t done much to improve the insurance situation for caravan parks. Caravan parks are being hit by premium shock, shifting terms, exclusions and a thicket of excesses that can make technically “being insured” little protection.
“Essentially, you’re paying more and getting less,” said Glenn Thomas, principal of GT Insurance Brokers in Bendigo.
Operators say the market is forcing a harsh choice: accept narrower cover and punishing excesses, self-insure, or gamble on staying open without the safety net most Australians assume is non-negotiable.
News reports cite caravan park owners with skyrocketing premiums. An ABC News report last year found that the owners of Kingston-on-Murray Caravan Park in South Australia were paying a premium of $34,000 in 2024, up from under $15,000 in 2020. The Victorian Caravan Parks Association president has said that premiums for some members have increased by 300%.
Thomas said that one of the industry’s least-discussed affordability traps isn’t only the headline premium - it’s the way excesses have ballooned in peril-prone classes.
“Some of the excesses on small businesses now - like caravan parks - are $5,000 for a claim, or $10,000 for storm, $20,000 for trees and $50,000 for bushfire,” he said.
At that point, the excess can function like a de facto exclusion for the most common, most frequent losses - the fallen branch through an amenities block roof, the storm-lifted awning, the flash-flood damage to electrical infrastructure. Even when the policy responds, operators can be left juggling cashflow at precisely the moment trading is disrupted and repair costs spike.
The public sees “a caravan park” and imagines low-margin simplicity. The reality is a complex physical risk: cabins and annexes, laundries and camp kitchens, playgrounds, pools, kiosks, LPG infrastructure, power distribution, wastewater systems, flood-prone grounds and transient occupancy patterns. A single major event doesn’t just destroy property - it wipes peak season revenue, triggers cancellations, forces refunds and can set off long-tail liability issues.
The Insurance Council of Australia (ICA) has flagged caravan parks as among the industries it says are being squeezed by rising public liability costs, arguing for reforms to state and territory civil liability laws. Whether or not policymakers accept that diagnosis, it underscores the broader reality: for parks, the insurance challenge is not one product - it’s property, BI, liability and sometimes management liability and motor/plant, all in a risk environment getting less predictable.
The stakes here could be cultural and social as much as commercial because caravan parks sit at the intersection of domestic tourism, regional jobs and social cohesion - including, in some areas, the long-term residents who live in parks because they can’t access other housing.
“It’s a very Australian, middle-class thing to do – to go to a caravan park,” said Thomas. “But if these places can’t afford to stay open, it does seem very un-Australian to be charging that kind of money for these operators.”
It’s a charged line - and insurers will push back. Many will argue the premiums reflect real loss costs, that floods are hard to mitigate, that building standards, maintenance and site selection matter and that climate risk is accelerating faster than legacy pricing models were ever built to handle. The ICA and other industry voices have repeatedly pointed to the rising cost of extreme weather, estimating extreme-weather losses as averaging $4.5 billion a year in the 2020s - triple the 1990s.
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But caravan parks are also a case study in what happens when risk-based pricing outruns a community’s ability to pay: essential services shrink, regional economies lose accommodation capacity and more operators quietly step into the shadow market of partial cover or no cover.
For some insurers, it could mean moving past blunt avoidance - the silent “no quote,” the sweeping exclusion, the excess so high it neuters the promise of protection - and instead investing in sharper underwriting that rewards mitigation. That could result in clearer pathways for parks to earn better terms through defensible vegetation management, upgraded drainage and power, raised services, firebreaks, flood plans, stronger building materials, and verifiable maintenance regimes. It also means transparency: if cover is being narrowed, show why, show how to improve, and stop relying on complexity as a pricing lever.
For brokers, it could involve more pushing for meaningful sublimits and helping operators build the evidence base insurers say they need. It also means telling uncomfortable truths early: which risks are trending toward uninsurability, what mitigation can realistically achieve and where the operator’s own balance sheet must play a role.
