The proper designation which should be on the V5 under "body type" is "Motor Caravan" not "Motor Home."
Since that document is printed from the DVLA database, I can't think of any reason for it to be different. I suppose, for an aftermarket conversion, the insurers might only have access to an out-of-date entry?
But it's also possible the insurers are right, and the seller was hoping you'd ignore the discrepancy,
Personally, I don't think I'd have cancelled a viewing for that, unless it was a long way away, but I'd certainly have been on my guard when I got there (see my reply to your post elsewhere).