Insuring an RV is different from insuring a standard automobile. And it’s also quite different from insuring a home. Most of the time, RV owners require a specialized policy that specifically addresses the unique concerns of RV ownership.
Let’s take a look at some of the key risks and issues RV owners face that auto owners don't typically encounter - and that aren't typically covered by insurance carriers.
RVs have more options and attachments than automobiles do. Motorhomes and recreational vehicles often come with a vast array of permanently attached options and devices that are not common in ordinary vehicles. Most people want coverage not just for the vehicle itself, but also for the attached items like satellite dishes, antennae, awnings, solar panels, hitch equipment and so on. Insurance carriers that understand RV ownership will typically make this coverage available in their base policy at no additional charge - or at least make specific coverages easily available. In contrast, many standard auto insurance carriers don’t even realize that these extras could be an issue; and you certainly don’t want to find that out come claim time! The best insurance policies are the ones that cover all the attached items in addition to the basic stripped-down RV chassis.
RVs typically carry more personal items than you could fit into your sedan. Personal belongings coverage – called ‘personal effects coverage’ in the insurance industry - is critical for an RV. People traveling in RVs simply carry more of their belongings than they would if they were only traveling by car. If someone were to break into your RV; or if your RV were destroyed in a fire, collision, tornado or any other covered hazard, you would likely lose a lot more than the RV itself. We're talking about things like:
Camping and recreational gear
Grills and cooking equipment
Clothing and jewelry
Personal Effects policies cover items like these. Most carriers include up to $3,000 in personal effects coverage as part of the base policy. Some will even compensate you the full replacement cost or purchase price of these items, which is much better than coverage that only pays a depreciated amount! And if you need more, you can generally purchase more.
Full replacement cost is more important for RVs than for automobiles. Motorhomes and RVs depreciate much faster than permanent real estate, but most auto coverage is based on the ‘fair market value’ of the vehicle after depreciation. What's worse - the difference between fair market value and the actual replacement cost can leave RV owners open to high-dollar losses. When you elect full replacement cost coverage, the insurance company will reimburse you based on what it costs you out-of-pocket to actually replace your vehicle - and not the book value of the RV, which deducts tens of thousands of dollars for depreciation. Insuring for replacement cost rather than fair market value generally costs a bit more in premium, but it also ensures that you will be made financially whole and back on the road in a comparable vehicle should you ever wreck your RV.
RV usage is often seasonal. If you only use your RV for a few weeks or months and keep it in storage the remainder of the year, your insurance premiums should reflect that. Since your RV will be sitting in your backyard or garage for much of the year, there’s no need to pay for collision, uninsured motorist, or liability coverage. Your insurance company should have an option to pay a reduced rate that protects your investment against damage from flood, fire, tornadoes, theft, vandalism and the like while your RV isn't in use. It's called a Storage Option and it could potentially save you roughly 53 percent of your premium while your RV is in storage! Just remember to switch your full coverage back on before you go back out on the road!
Full-timers require more coverage than casual RV users. Notably, they need personal liability coverage. Most people get $400,000 to $500,000 in personal liability insurance through their homeowner’s insurance policy, but since full-time RVers usually give up their permanent residence to live in an RV, this personal liability insurance has to come from somewhere else; that’s what full-time coverage is for. While part-timers need to pack only that which they’ll need for a weekend or a few weeks, full-timers are literally carrying their whole lives with them. For this reason, RV insurance companies normally make expanded coverage available to full-time RV residents.
Your RV and Auto are damaged in the same accident. Can you afford both deductibles at the same time? This is far more common for RV insurers since RVs are frequently towed by truck or SUV. It’s quite easy for both items to be damaged or destroyed in an accident. When you combine your RV and auto insurance coverage under one policy, though, in most cases, you will only be responsible for one deductible, not two. This can cut your out-of-pocket expenses by half or even more in the event that your vehicle and RV are damaged or destroyed by the same covered incident or accident.
These are just a few of the more common issues and challenges faced by the RV community that most ordinary auto insurance companies don't understand or aren't prepared for simply because of the nature of their business model. The RV isn’t just a vehicle or trailer – there’s a lifestyle that comes with it. The best insurance companies carefully tailor their policies with the RV owner and his or her lifestyle in mind.
That's it! Those are my top 10 tips for buying an RV. Oh, and don't forget to test drive the unit. I guess that's an obvious one, right?