Hi Alex,
There are several aspects to your question that are not entirely clear. Judging by the date/age of the caravan, it is most likely the water heater is a Carver Cascade 2.
These are storage water heaters and they do not provide instant hot water. Typically the heater takes between 25 to 30 minutes to heat a thankful.
The heater has a 9 litre tank that needs to be filled, before it you try to heat it. When it is hot , you need to be able to push cold water in to push the hot water out, so it will never be empty even if you run out of cold water.
The heating systems are thermostatically controlled so it should never 'boil dry'
When travelling or storing in the winter, the heater needs to be deliberately drained which is the only time the heater should be empty, so when setting up on a new site, the heater needs to be re-filled by closing all drain ports, and opening the hot tap and allowing the cold water fill the tank. This may take about 1to 2 minutes When it is full water and air will come out of the hot tap. Close that tap when there is a good flow of water. The heater can now by turned on. After about 15min, you will get some warm water, but it will only reach full temperature after about 30 min. or a little shorter if you have both the Gas and electric option fitted.
Now It sounds as though you have micro-switched taps. This is where each tap has a small electrical switch the allows power to the pump when the tap is opened. If the pump does not run when you open a particular tap, then either the microswitch in that tap is faulty or the wiring is damaged.
If when you open the hot tap, the pump runs but no water is delivered then the heater may have been damaged over winter. There is a none return valve fitted to the cold water in let to the heater. If the heater has not been drained properly, then the NRV may have been frost damaged. Sometimes the NRV can be carefully repaired, on other occasions it may need to be replaced. This is why it is very important to drain the heater properly for winter storage.
The replacement vales are still available from good caravan suppliers, or I belive from arcsystems.biz. Check out the web site as it also has copies of the instruction manuals for many carver appliances including the Cascade Rapide which is in most respect the same as your model.