Having never owned an RV before when we started in 2005, we had no idea what we needed in the way of RV insurance. We quickly learned that RV insurance is much like automobile insurance except that full-timers on forums and websites were recommending something called Full-timer Coverage AND Total Loss Replacement Coverage - coverages that are not offered for autos. We'll get to those, but let's start with the basics of RV Insurance.
This is a long page, but if you want to skip around to areas that interest you the most, click on the links below.
Breaking Down RV Coverages
There are four three basic types of coverage that apply to both RVs and other vehicles - Liability, Uninsured/Underinsured, Collision, & Comprehensive.
Liability Coverage protects you from legal liability for bodily injury and property damage you cause to others. It does not cover the injuries to you and your family and it does not cover damage to your own vehicle. It is the coverage that is legally required in almost every state.
However, this Liability Coverage is legally required for motorhomes, not for towables. BUT, it is required for vehicles that are towing your towable RV and the tow vehicle's Liability Coverage carries over to the towable RV while driving.
The Liability Coverage required varies by state and is usually expressed in the state laws as minimum coverage limits. These limits are "per accident" and may be expressed as "Split Limits" or a "Single Combined Limit".
An example of a Split Limit might be 25,000/50,000/10,000 (perhaps shown as 25/50/10). That means that the limits of coverage "per accident" are $25,000 bodily injury coverage per person, $50,000 aggregate bodily injury coverage for all persons injured, and $10,000 for property damage.
An example of a Combined Single Limit would be $100,000 in which the total "per accident" coverage limit is $100,000, but it can be used as necessary for bodily injury and/or property damage.
Keep in mind however, that state minimum coverages may not be adequate to protect you from the potential liability of an RV accident. Large RVs tend to cause more serious bodily injury and property damage, and you could be personally liable for those claims that exceed the state-required minimums.
So, many agents recommend higher Liability Coverage limits than the state minimum. The recommended coverages often depend on the value of your personal assets, your net worth, and your earning potential.
Also, with higher liability limits, you may be eligible for a Personal Umbrella Policy which would protect you from liability that exceeds your RV policy limits. Umbrella policies usually require you to have minimum liability split limits of $250,000/$500,000/$100,000 or a combined single limit of $300,000 (or something in those ranges depending on the company).
For more information on Personal Umbrella Policies, click on the link.
Let's move on to other Basic Coverages.
Uninsured & Underinsured Motorist Coverage
These coverages protect you and your passengers when someone without insurance (Uninsured Motorist - UM) or someone without enough insurance (Underinsured Motorist - UIM) hits your RV.
These coverages can be split or combined. But about 20 states require you to have at least Uninsured Motorist Coverage (again, required for motorhomes and tow vehicles, but not towables). The other states allow UM & UIM Coverage to be added to your policy as an option for an additional premium. Most people will get both coverages because the premiums are relatively low.
You can get UM & UIM coverage for Bodily Injury and/or Property Damage. Think of Uninsured & Underinsured Motorist Coverage as the opposite of the Liability Coverage we discussed above.
Liability Coverage covers other people when you hit them. Uninsured and Underinsured Motorist Coverage protects you and your family (and passengers) when someone hits you and you can't recover from them because they don't have insurance or don't have enough insurance to cover your claims.
Collision Coverage will pay for damage to your RV when you collide with another vehicle or any non-living object like a fence, pole, wall, etc. It does not cover collision with an animal or any claim that is not the result of a collision. This coverage will pay regardless of who was at fault.
Comprehensive Coverage covers damage to your RV not covered by Collision. A loss not covered by Collision includes:
Not all policies cover all of the above losses, so be sure to understand what is included in your particular Comprehensive policy.
Most RVers, especially full-timers, will have a combination of the above coverages. Usually, your state will require Liability Coverage (which is part of Full-timer Coverage if you go that route). Your state may require Uninsured and/or Underinsured Motorist Coverage. And, if you are financing your RV, usually your lender will require that you have Collision and Comprehensive coverages (they may refer to it as "Full Coverage").
Now, notice that none of the coverages above cover injuries to you and your family IF you are at fault. RV insurance assumes you have health insurance to cover injuries to yourself and your family in accidents that are your fault. If you don't have health insurance or you have a high deductible health policy, you may want to consider optional Medical Payments Coverage.
Total Loss Coverages
So, let's assume we have Collision and Comprehensive coverages. How much will the insurance company pay if we have a total loss of our RV through an accident, theft, fire, or some other disaster?
There are three types of total loss valuation - Market Value (Actual Cash Value), Agreed Value, and Total Loss Replacement. Market Value is the standard, included coverage while the other two are options requiring higher premiums. Agreed Value and Total Loss Replacement are specialized coverages in RV insurance, while Market Value is usually the only option in automobile insurance.
Market Value (Actual Cash Value)
The basic "total loss" coverage included in RV insurance policies is Market Value. That means that you will be paid the actual market or cash value of your RV at the time of the loss. You will be put back in the same financial position that you were before the loss. You had an asset worth a certain dollar amount, and you will be paid the value of that asset - you will be made "whole", which is what most insurance is designed to do.
If your RV was purchased for $100,000 but it was only worth $60,000 according to standard NADA or Kelley Blue Book RV valuations at the time of a total loss, you will be paid $60,000 (less the deductible).
An upgrade option (additional premium) is to purchase Agreed Value coverage. This means that in the case of a total loss, the insurance company will pay the Agreed Value which is exactly what it sounds like - it's a value for your RV that you and the insurance company agreed on from the beginning.
This coverage is very useful for bus conversions and custom RVs that don't have a standard market value, used RVs, and RVs that have upgrades that increase their value beyond the standard market value. The Agreed Value is usually based on purchase price and is documented by purchase documents. However, it is possible you got a really good deal at time of purchase and the purchase documents show too low a value. In that case, the Agreed Value may be based on NADA or Kelley Blue Book values, or on an appraisal, if necessary.
You can get Agreed Value coverage on any RV model year.
If your Agreed Value is $100,000 and there is a total loss, you will be paid $100,000 (less the deductible) although the current market value of the RV at the time of the loss may only be $60,000. Because this coverage puts you in better shape than just "making you whole" (protecting you from depreciation), there is additional premium.
Total Loss Replacement/Purchase Price Guarantee Coverage
Another upgrade option (additional premium) is to purchase Total Loss Replacement coverage. This means that in the case of a total loss, the insurance company will pay for a new RV that is the same or substantially the same as the RV you lost.
This coverage can usually only be purchased in the first two model years of the RV. And, the Total Loss Replacement coverage, replacement of your RV with a new RV, only lasts for the first five model years.*
In the sixth year, the coverage reverts to Purchase Price Guarantee coverage. That means that in the case of a total loss in year six and beyond, the insurance company will pay you the original purchase price of the RV.
Be aware that some companies continue the Purchase Price Guarantee coverage from year six on as long as the policy is in force. However, some companies will only honor this coverage through the tenth model year (or less)*.
* Geico's Total Loss Replacement is in effect for only four years, and the Purchase Price Coverage ends after seven years.
So, if your RV's purchase price was $100,000, but it was only worth $60,000 at the time of total loss, in the first five years, your policy would pay to replace your RV with a new unit (meaning never titled to a consumer) of the same make, size, class, and type with the same equipment. The new unit may now have a purchase price of $90,000 or $100,000 or even $120,000, but whatever it is, you get a new unit just like the one you had. If the unit is no longer made, then they will pay for a new unit that is substantially the same.
IF, however, you don't want the same unit, you have the right to choose a different replacement unit, but the payout will be limited to the cost of the new unit the insurance company identified as a proper replacement.
Of course, you still have to pay the deductible in the above scenarios.
Now, let's say that your $100,000 RV is in its eighth year and you have a total loss when its value is only $30,000. The insurance company will no longer replace your RV with a new unit - the Total Loss Replacement coverage expired at the end of five years. However, the Purchase Price coverage has kicked in, and the insurance company will pay you $100,000 (less the deductible).
Again, Total Loss Replacement/Purchase Price Coverage puts you in a better position - it more than "makes you whole" by protecting you from depreciation. Therefore, your premiums are higher.
So, which of the above coverages should you get?
Well, it depends. If you are trying to keep premiums as low as possible and you have cash in the bank to cover significant damage or total loss of your RV (and to pay off any loan on the RV), you could probably go with just Liability Coverage (you might even be able to add your RV to your auto coverage, if you go that route).
If you are trying to keep premiums low, but you still want to be covered for any damage to your RV from any cause, then you will want Liability, Collision, and Comprehensive Coverages, but you may opt for the standard Market Value/Cash Value total loss coverage. This will keep your premiums a little lower and still "make you whole" in the unlikely case of a total loss. However, if you go this route AND you have a loan on the RV which is more than the cash value of the RV, you may want to purchase optional Loan Payoff Coverage (aka Gap Insurance).
If you care more about being able to replace your RV with a new RV in the case of a total loss, and you don't have the cash in the bank to make up the difference (and pay off any loan) after a Market Value payout, you will probably want Liability, Collision, and Comprehensive Coverages with either Agreed Value or Total Loss Replacement Coverage. Yes, the risk of a total loss is relatively low, and the premiums are higher, but if a total loss would be financially devastating and you can swing the extra premium, that would most likely be the way to go, especially if you are a full-timer with limited assets and no house.
Okay, let's look at some other coverages.
Other RV Coverages
Full-timer Coverage is much like a homeowners policy from the standpoint of potential liability to others. It replaces Liability Coverage (discussed above) for those that use their RV as a primary residence. It covers accidents that may occur while driving the RV or accidents that may occur in an RV (OR on the campsite) while the RV is stationary.
Another reason Full-timer Coverage is important is that having the coverage ensures that your insurance carrier is quite aware that you use the RV as a home and that it does not remain stationary. Technically, an insurance company can deny coverage if it was not disclosed to them that the RV was intended to be used as a permanent residence. If your policy includes Full-timer Coverage, the insurance company sure has a tough time arguing that they did not know the intended use of the RV.
Many full-timers feel that the Full-timer Coverage is not necessary, but some companies require you have it if you are a full-timer. It also narrows down the companies we have to look at for quotes, because there are only a few companies that offer the coverage. The added bonus of that is that those companies, just by having Full-timer Coverage, know better how to handle full-timer issues.
Many companies offer a "Full-timer Package" which includes:
Note: For towables, the coverage may include only bodily injury since a towable wouldn't cause property damage unless it detached from a tow vehicle while going down the road - in that case, the tow vehicle's liability coverage would kick in
Vacation Liability Coverage
Vacation Liability Coverage (also known as Campsite Liability Coverage) provides the same homeowners-type accident coverage as Full-timers Coverage (but it doesn't include the Storage Shed Contents or Loss Assessment coverages).
If you have Full-timers Coverage, you can't get Vacation Liability Coverage, and vice versa. So, this coverage is for those that want to be protected from liability while parked, but who are not full-time RVers.
Personal Effects Coverage
This is an optional coverage that I wish was included in a "Full-Timers Package". If you own a house, your personal items may be covered under a homeowner's policy, but often there are limitations to that coverage when the items are "off premises". Of course, if you don't have a house, the only way to cover the loss (resulting from damage, destruction, or theft) of the items in your RV (computers, electronics, clothing, cameras, jewelry, tools, golf clubs, firearms, etc.), is to have Personal Effects Coverage.
Personal Effects Coverage is usually available when you have purchased Comprehensive Coverage, but it does require an additional premium. You can choose the overall level of coverage - the aggregate amount to be paid to you should everything be lost. Personal Effects Coverage pays replacement costs of your items, not just current value.
However, be aware that most policies have "per item" limits (often $500 or $1,000) and "group of similar items" limits (often $1,000, $2,000, or $3,000). This is especially important for you to know if you have expensive single items. If you have numerous items worth more than $500, you may want to check into "Valuable Items" Coverage for such things as expensive jewelry, fine art, etc.
Most of us don't think about the contents of our RVs, but we've known a few people that have had fires, accidents, and other disasters where they've lost everything. And most of them didn't realize they were underinsured on their personal items until it was time to start replacing everything. Those incidents made us take stock of everything in our RV, and we increased our Personal Effects Coverage.
Also, it's always a good idea photograph or video the personal items you carry in your RV and to schedule them out with purchase prices or values (make copies of purchase receipts if you still have them). This will give you a record of everything and will provide you with a total so you know how much coverage to get. Keep a copy of your schedule in a safe place and provide the insurance company with a copy for your file.
Some RV insurance companies offer Disappearing Deductibles. For each year you don't have a claim, your deductible is reduced 25%. So, after four years without a claim, your deductible is $0.
Your deductible remains at $0 until you have a claim. If you later have a claim, your deductible is restored to the original amount and the Disappearing Deductible starts over.
Disappearing Deductibles may be included with your Collision and/or Comprehensive Coverage, or it may be an option requiring an additional premium.
Many RV insurance policies include a minimal amount of Emergency Expense Coverage for no extra charge.
For full-timers, this coverage will pay for reasonable temporary living expenses and transportation if the RV becomes disabled due to a "covered" loss.
For non-full-timers, this coverage will pay for reasonable temporary living expenses, transportation, and the return of the RV if it becomes disabled more than 50 miles away from the insured's primary residence.
This coverage can be increased for an additional premium.
Emergency Roadside Assistance
RV insurance companies have optional 24/7 Emergency Roadside Assistance that can be added to policies for an additional premium.
This coverage provides towing to the nearest qualified repair facility and pays for necessary labor at the place of disablement when the RV becomes disabled from events such as:
The towing benefit usually includes the tow vehicle with an insured trailer (even if the tow vehicle is insured elsewhere) and anything being towed by an insured motorhome (even if the towed vehicle or trailer is insured elsewhere).
In my opinion, this optional coverage is more suited to recreational RVers. As for Full-timers and extended time RVers, most forgo this coverage and opt for Emergency Roadside Assistance from one of the two major RV-specific companies: Coach-Net or Good Sam Emergency Roadside Service.
Medical Payments (aka MedPay)
This is an optional coverage* which pays for the costs of medical care for you, your family, and any passengers resulting from a covered accident. It may be used regardless of fault.
This coverage is fairly inexpensive and may be a great supplement to your health insurance especially if you have a high deductible health insurance policy. If you have medical costs resulting from an accident, this coverage pays quickly and may save you paying for a high out-of-pocket deductible.
It may also be worthwhile if you have no health insurance. It's certainly not a substitute for health insurance and only kicks in if you are injured in a covered accident, but it may be worth the premium.
* - Some states require insurers to include a minimum amount of this coverage.
Personal Injury Protection (PIP)
Personal Injury Protection is an expanded version of Medical Payments described above. In addition to paying for costs of medical care for you, your family, and any passengers resulting from a covered accident, it may (in some states) also cover lost wages, the value of lost services to your family, and funeral expenses.
This coverage is only available in the few "no-fault" states, and it is a required coverage in some of those states.
Just like Medical Payments, this coverage is fairly inexpensive and may be a great supplement to your health insurance especially if you have a high deductible health insurance policy. If you have medical costs resulting from an accident, this coverage pays quickly and may save you paying for a high out-of-pocket deductible.
It may also be worthwhile if you have no health insurance. It's certainly not a substitute for health insurance and only kicks in if you are injured in a covered accident, but it may be worth the premium.
Some RV insurance companies include Mexico Coverage if you have Comprehensive & Collision Coverage. Other companies may offer it as an option with additional premium due.
So, what is Mexico Coverage?
Well, it simply means that the coverage area of your RV policy is extended to Mexico for Comprehensive and Collision claims (most base policies exclude Mexico from the territory of coverage). However, there are some caveats.
Fire Department Service Coverage
This coverage pays a limited amount toward fire department charges incurred for a run made to save or protect your RV.
Some RV insurance companies include Fire Department Service Coverage if you have Comprehensive & Collision Coverage. Other companies may offer it as an option with additional premium due.
Loan Payoff Coverage (Gap Coverage)
This coverage is exactly what it says. If your RV is totaled and you only have Market Value (Actual Cash Value) coverage, this optional coverage will pay off any loan balance remaining. Some Gap Coverage will also pay your deductible to keep you from being in a financial bind.
Personal Umbrella Policies
Although this is not RV insurance, Personal Umbrella Policies can provide low-cost additional liability protection above and beyond RV insurance (and homeowners insurance) limits.
Umbrella Policies kick in when there are claims against you that exceed the limits of your RV insurance, Auto Insurance, Homeowners Insurance, Boat Insurance, and other policies.
For example, let's say you have RV insurance with combined single limit of $500,000 and you have an Umbrella Policy in the amount of $2 Million.
You are involved in a serious RV accident causing injuries and property damage of $1.2 Million. Your RV insurance company pays out the $500,000 and then you are sued for the additional $700,000. Your Umbrella Policy will defend you and cover your legal fees and the additional damages.
Without the Umbrella Policy, the lawsuit could have wiped out your savings, wiped out your retirement, forced you to sell your house, forced you to file bankruptcy, or resulted in a judgment which could cause garnishment of your wages for several years.
In addition to covering "excess liability" above the limits of your underlying policies, Umbrella Policies can also protect you in situations that aren't covered by any type of insurance. If someone files a personal injury lawsuit against you claiming, libel, slander, mental anguish, or a myriad of other actionable grounds, your Umbrella Policy may protect you and defend you (depending on the details of the policy coverage).
One myth is that Umbrella Policies are only for the wealthy, but that's certainly not the case. Lawsuits abound and no one is safe from them. Also, Umbrella Policies have fairly inexpensive premiums.
It's not unusual for the first $1 Million of coverage to cost between $100 - $200 per year, and each $1 Million of coverage after that is about $100 more.
Of course, the premiums are reasonable because you do have to have high limits on your other policies to be eligible. Often they require $500,000 of liability coverage on your homeowners (assuming you own a house), and they may require $300,000 (or more) of single limit liability coverage on your RV.
It's another insurance you hope you never have to use, but for a couple hundred dollars a year, it provides a little peace of mind against a catastrophic lawsuit.
Our Full-Time RV Insurance
Again, we didn't really know what we were doing when we started in 2005. And we simply bought what was recommended. But, we now understand our coverages and feel good about what we have.
2006 Keystone Cambridge Fifth Wheel
2005 Ford F450 Diesel Dually Pick-up