that is my understanding of the insurance issue when towing. the caravan becomes part of the insured vehicle when it is on tow, however the insurance company (all as far as im aware) will provide an exclusion stating that any towed trailer is only covered 3rd party, therefore as has been stated they will pay for any damage to the "other" vehicle but not to your caravan or trailer. this is why everyone is advised to take out separate caravan insurance for the van, it may not be a legal requirement but it sure is a common sense requirement in my eyes.