As Americans consider how to travel safely during a pandemic and RV sales are on the rise. According to data from RV Industry Association, the total shipments of RV manufacturers increased by nearly 47% last December. Laila Ali, of Ace RV Sales and Rentals in Herndon (Va.), says that people are taking more road trips.
The RV is a double-duty vehicle that can be used as transportation and accommodation. However, RVs can be costly. They cost anywhere from $10,000 to $500,000 for a motorhome or travel trailer that is towable behind a vehicle.
It is crucial to protect your investment by getting the right insurance. David Russell, Nationwide’s powersports product manager, says that the RV can be your biggest physical asset and is often worth more than a primary residence.
Take into account special risks when looking for insurance
Insurance requirements can vary from one state to another, with three types of coverage that are similar to an Auto Policy: collision, liability and comprehensive. This is protection against lawsuits, accidents, and Mother Nature.
You should pay particular attention to liability coverage because RVs can cause a lot of damage in an auto accident. A motorhome policy can only cover liability. The policy covering the towing vehicle will typically provide liability coverage for a travel trailer. You may consider an umbrella policy if you have large retirement savings to protect.
There will be a difference between collision and comprehensive coverage. The policy may provide coverage for a severely damaged RV in any of the following ways, depending on its condition. Russell states that actual cash value covers the RV’s current market value and pays the owner the amount it was worth at the time of the incident. Total loss replacement is the amount required to replace the RV damaged. Russell states that under agreed value coverage, which is usually for classic vehicles the insurer will pay an amount that was already settled.
You may also want coverage for other risks that a standard RV policy does not cover. John Dixon, USAA’s product management director, said that RV insurance is very different from car insurance. For example, you may want extra coverage to cover the cost of a hotel for RV repairs or if you are unable to stay in your RV.
Bert Alanko (profit center leader at MBA Insurance) suggests that you also consider roadside assistance. An RV tow can be costly. The tow truck costs up to $130 to hook up and there is an additional charge for mileage.
Common claims such as vandalism and theft are covered by homeowners or renters insurance policies. However, there is usually a lower limit for coverage of property far from home. Your RV policy will provide additional coverage if your RV contains expensive electronic items and personal effects. Most RV policies cover permanent contents such as bathroom fixtures and kitchen appliances.
One of the most difficult situations for RV owners is one in which the other driver is at fault. This is because they have little or no insurance. Joseph Fried, an Atlanta trial attorney at Fried Goldberg, has dealt with insurance cases involving RVs. If you are severely injured, in addition to other damages, you could find yourself on the hook for huge medical bills.
Fried says that the minimum amount of insurance needed for commercial and personal vehicles is far lower than most people believe. “If you’re seriously injured and require medical attention or money because of your disability, you should have insurance. If you rely on someone with $15,000, $1 million, or less, these numbers don’t really matter in today’s society.
Fried states that adding uninsured or inadequate coverage is very affordable, but insurance agents tend not to promote it as much because they get a smaller commission.
How much does insurance cost?
Cost of RV insurance can vary depending on where you live, what vehicle you have and who your insurer is. Nationwide charges $100 per year for a pop up camper and $1,500 for luxury motorhomes. USAA offers RV insurance through a partnering company called Progressive. Annual premiums for RV insurance range from $100 to $3,000 for a travel caravan and $200 to $7,000 for a motorhome. Dixon states that the premium is higher for RVs with higher values.
While consumers can reduce their annual premiums by purchasing plans with higher deductibles they may also save money. However, this decision must be made carefully. Ali states that RV repairs can be manageable, but not inexpensive.
Dixon says that awnings that haven’t been properly retracted are a common type of insurance claim. He adds that the repair cost can vary from $1,000 to $10,000 depending on how large the awning is and how severe the damage was.
Dixon states that consumers can receive additional discounts if the annual premium is paid in full and they have no tickets or accidents.
Shop around for insurance policies before you buy. Alanko advises that you talk to your agent about what you plan to buy before you buy an RV. What are your options and costs? Is your agent able to offer any advice? “You don’t want surprises.”
