Protecting the Life You Love

Whether you’ve moved your life entirely on the road or you’re more of a weekend RV warrior, you’ve found something to love about the RV lifestyle. You’re invested in it—not just emotionally, but also, financially.

New RVs can cost thousands and even hundreds of thousands of dollars. And used RV prices don’t lag much behind. You may have spent years saving up to purchase the key to your RV dreams. Perhaps you’ve sold or refinanced your “real” home to access funds to buy your RV. Either way, your investment warrants protection. And that’s why RV insurance is a must.

What Exactly is RV Insurance?

If you’ve owned and insured a bunch of cars over the years, you already know a lot about RV insurance. You pay premiums for it. You’ll have a deductible when you make a claim. Coverage varies among policies, but you typically pay for liability and property protection. RV policies also come with coverage limits: the maximum amount an insurer will pay when you make a claim. And like auto insurance, in nearly every state, RV insurance is mandatory. It’s illegal to drive an RV without insurance everywhere except in New Hampshire and Virginia. But let’s be clear: even if it’s legal to drive without insurance in your state, it’s just not smart to go without it. In the case of a serious accident, where one or more passengers is badly injured, you could be on the hook for hundreds of thousands or even several million dollars. In other words, you could lose everything. And you could wind up paying for your mistake for many years.

RV insurance differs from auto insurance, as well. Most policies include some additional coverages and involve special considerations. Let’s take a look at how RV insurance differs from traditional auto coverage to help you find the best RV insurance for you and your rig.

RV Insurance Reflects RV Life

RV insurance is specifically designed to suit your RV lifestyle. Insurers offer customized policies for full-timers and part-timers. If you only drive your RV occasionally and don’t live in it every day, you’re considered less of a risk by RV insurance companies. That’s because you spend less time on the road and park your vehicle in fewer far-flung places. Part-timers usually spend less on insurance. It’s important to select the proper policy for your rig. If you buy a part-timer policy and an insurer determines you’re actually living in your RV, the company may deny coverage when you file a claim.

RV policies are generally made up of two essential parts: liability and property damage coverage. You need both. Collision insurance is considered part of property damage insurance.

You should select your coverage limits by considering two factors: your net worth and the cost of your vehicle. In the event of a serious accident, if your limits aren’t high enough to cover the damages, you’re putting your personal funds at risk. If you own a deluxe motor home that cost you a lot and is equipped with lots of amenities, your property damage limit should be high enough to cover a complete loss. When we set out on a road trip, we often carry a lot of expensive personal property, including cameras and computers. Be sure your property damage insurance covers those, too.

You just never know what might happen when you set out on the road. The property damage insurance you carry will typically cover many of the hardships you might encounter when you’re driving your rig, including theft, vandalism, weather damage, animal collisions, and more. A standard policy might not cover permanent a\achments to your vehicle, including solar panels and air compressors, but you can usually add optional coverage for permanent attachments. Other optional policy features include roadside assistance and reimbursement for emergency expenses like food and lodging if an incident force you to seek overnight shelter outside your vehicle.

An Important Choice: Replacement Value Coverage Versus Actual Cash Value Coverage

It’s a sad truth, but the moment you leave your RV dealer’s lot with your brand new rig, it begins to lose cash value. When you carry Actual Cash Value coverage, in the event of a loss, your insurer will pay you what it would cost to buy a used RV or RV equipment similar to yours.

With Replacement Value coverage, your insurer will reimburse you the cost of buying a brand new rig with features that match your original RV’s. The same goes for any permanent attachments you may have added to your vehicle. Naturally, Replacement Value coverage costs more than Actual Cash Value coverage. But if the damage to your vehicle is serious, you may be glad you spent the extra cash to carry Replacement Value coverage.

How Much Does RV Insurance Cost?

As is the case with so many financial questions, the answer is it depends. For a full-time RVer, it might cost about $1000 a year to cover a Class C rig. That price is likely to double if you own a Class A RV. But part-timers will pay less. Your driving record may also influence the cost of your insurance so, needless to say, drive safely—for all kinds of reasons. Tickets and at-fault accidents all count against you and will result in higher premiums. On the flip side, if you have a perfect driving record, you may qualify for a safe driver discount.

Believe it or not, your credit score can also affect the insurance rates you’re offered. That’s because, statistically, drivers with higher credit scores make fewer claims. The higher your credit score, the less risky you look to insurance companies. Before you purchase a policy, you may want to take some time to clean up your credit. Bringing all of your credit accounts up to date and making more than the minimum payments due on your accounts can bump your credit score up.

Many RV insurers offer discounts to policy owners if they meet certain criteria. Somewhat ironically—at least from the perspective of a full-time RVer—owning a home can reduce your premiums. If you’re a member of the military, you may be en8tled to a discount, too. Bundling

your RV insurance with other types of insurance, including homeowner’s and motorcycle policies, can also save you money: sometimes as much as 25% per policy. Insurers want your repeat business.

There’s one other surefire way to decrease your RV insurance costs: select a higher deductible. Choosing a $1000 deductible versus a $250 deductible can save you as much as 40% on policy premiums. How high a deductible should you choose? As high as you can comfortably afford to pay in the event of an accident. Before buying your RV, you may want to create a “deductible” fund”—perhaps as a separate savings account—that’s equal to the deductible you choose for your policy. That way, you’ll always be prepared to get repairs done promptly if you ever have to make a claim. Who wants to be sidelined from their RV adventures over an insurance matter? That’s no fun at all!

Choosing the Right Coverage: Do Your Research

RV insurance is a complicated subject. Having a trusted insurance agent in your life can be a great advantage. Look for an agent who will take the time to really understand your need for protection and your financial circumstances. An agent worth his or her salt will ask a lot of questions and look for ways to reduce your insurance costs. But you can also take the time to educate yourself, by reading articles like these, insurance company and insurance agency product reviews, and, of course, the fine print on any policy you’re considering. And don’t discount the RV community as a resource. Talk with other, experienced RV enthusiasts or join an online RV discussion board. Take advantage of the collective wisdom of others who share your passion and lifestyle.

Author Bio:

Susan Doktor is a journalist and business strategist who writes about a wide range of personal finance topics. Her contribution comes to us courtesy of Money.com.