What to look for when purchasing an insurance program for your recreational vehicle.
In today’s day and age, not purchasing insurance can mean a lifetime of paying bills for accidents and unforeseen consequences from forces ultimately outside of our control. If not a lifetime, then be prepared to give away a significant amount of change out-of-pocket.
But how can I tell which RV insurance plan is best for me?
After reading this guide, you should have a better idea of what kind of insurance plans and options you will want to look for when selecting the type of protection for your treasured RV.
So Read on ahead to learn Everything You Need About RV, Caravan and Motorhome Insurance
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Why should I care about insurance at all?
Generally speaking, an insurance policy is all about saving in a plan that gives you benefits should the worst-case scenario happen. If the title and intro of the article hasn’t already gotten you interested, perhaps the following concept will.
Picture this: a group of five families inhabiting an island help each other out and build five homes to support themselves as they build their little society. One day, one home collapses and now one family is in dire need of financial assistance (for repairs and damages, whatever they may be). The other four families pool up their resources and donate it to the family in need because it’s the right thing to do.
If you can forgive the quasi-hyperbolic statement at the end, this is technically how insurance works. A product that’s better to have around, than leave you wanting when you need it. Because why would you pay for something that wasn’t entirely your fault in the first place?
When in doubt, remember that RV insurance is required if:
- You own a motorhome (Class A or B RV, explained later),
- You took out a loan to finance your RV, or
- Your RV is a rental.
What questions should I expect insurance companies to ask me?
They will want to know how much money you’re willing to afford. This goes without saying, but no company is willing to hand out a product to an interested buyer without knowing what their price point is. Typically the questions you can expect include:
- How much money you want to insure your motorhome for,
- If you want to ensure the annex (an awning-like extension), and
- The amount of insurance cover for the contents of your motorhome.
It should also be noted that insurance policies may vary between a “motorhome”, “caravan” and “RV”, so read the fine print carefully.
The next section details the differences between the aforementioned terms.
What’s the difference between an “RV”, “caravan” and “motorhome”?
There are three classifications of “RV”, a “caravan” typically means a fifth-wheel trailer and a “motorhome” usually refers to any Class A or B RV. The chart below provides a description for each class of RV.
|LENGTH AND WEIGHT
|26-45 ft, 13,000-30,000 lbs
|Like giant homes on wheels, examples include: luxury coaches, converted buses and motor coaches
|17-23 ft, 4,000-9,000 lbs
|Smallest RV class, called “camper vans”, great fuel economy, not as big as Class A
|20-30 ft, 10,000-13,000 lbs
|Mid-size option, has the camper portion which extends over the cab of the vehicle; fifth-wheel trailers/caravans are classified as this
So, what exactly does RV insurance cover?
RV insurance has much in common with car insurance, only with some added options for the “camper” element. Comprehensive, collision and liability are options included in most RV insurance packages. Other benefits include total loss replacement, campsite and vacation coverage, towing and roadside assistance, full-timer coverage, and uninsured and underinsured motorist coverage. Below is a quick list to shed some light on how these options benefit you.
Straightforward crash insurance. This coverage pays for any damage your RV may sustain in an accident involving another vehicle.
Any other damage. This coverage pays for damage your RV sustains outside of collision such as theft, vandalism, or falling objects.
AKA, third-party insurance. A sort of addendum to collision, liability insurance covers the cost of damages a third party may encounter in the event of an accident, such as hospitalization.
- Total Loss Replacement
Totaled vehicle coverage. While collision insurance may cover the cost of some head-on crashes, this option provides enough cash to replace the entire vehicle if the damage is severe.
- Campsite and Vacation Coverage
Vacation coverage. Additional coverage for damages during vacations and on campsites; situations such as backing into a parking or utility pole. This option is not available for individuals who use their RV as their residence or as a long-term living accommodation (compare with “Full-Timer Coverage”).
- Towing and Roadside Assistance
Help if your vehicle breaks down on the road. Self-explanatory, this coverage provides towing service, and may or may not include the following: battery service, flat-tire service, fuel delivery, lockout service and winching service.
- Full-Timer Coverage
Insurance for “full-time” RV residents. This coverage affects individuals who use their RV’s as their main home 24/7. Typically, this covers theft, emergency expenses and additional liability.
- Uninsured and Underinsured Motorist Coverage
Liability coverage for individuals with little to no coverage. This covers property damage or hospital fees incurred by third parties who have inadequate coverage or no coverage at all.
Remember that this list offers general information on the aforementioned options and you will need to inquire about specifics with the insurance companies; questions such as how much or what happens if?
Compare RV insurance rates and benefits with other companies via online quote generators and weigh your options.
Keep in mind to read the fine print carefully!
What about auto club memberships and their benefits?
Joining an automotive club membership can yield RV insurance benefits. There are several auto clubs in Australia, each with their own perks and benefits you can enjoy with a successful membership application. Take note however, that insurance benefits with auto club memberships may be complementary and may not have the customizability, or certain options available, as a stand-alone RV insurance policy.
- Discounts or freebies outside of insurance
- Potentially lower premiums than regular insurance policies
- Insurance coverage service honored outside of the country
- Legal assistance
- Roadside Assistance is usually complementary
- Insurance benefits may not be claimable in certain areas
- Insurance amounts and benefits may be smaller than a standalone insurance plan
- Less options in customizing your insurance plan
- Membership fees on top of insurance premiums
- Some clubs require top tier membership applications for RV insurance
What Are The Various Auto Clubs and their Benefits?
- National Roads and Motorists’ Association (NRMA) – Total Loss Replacement for caravans, $500 coverage for spoiled food (left untouched because of accident), $100/day coverage for temporary accommodations for up to 7 days (if you use your caravan as your primary residence)
- Royal Automobile Club of Queensland (RACQ) – Coverage for up to $500 in losses from theft, $100/day coverage for towing and storage after an accident for up to 30 days, up to $20 million property liability
- Automobile Association of the Northern Territory (AANT) – (all features stated come built-in with their caravan/trailer insurance) Option to choose your vehicle repair area, annex coverage, freight cost coverage, after accident clean-up
- Royal Automobile Association (RAA) – Coverage for up to $2,000 for personal belongings lost in an incident, coverage for transport costs (if a stolen RV gets recovered), up to $750 coverage for stolen locks and keys
Ultimately, while giving you a large list of discounts and benefits to enjoy, auto club memberships are an alternative you can consider when looking for other ways to insure your RV.
What about CTP insurance? Isn’t that enough?
Compulsory Third Party (CTP) Insurance is required for motorhomes, but only covers bodily injury or death. While motorhome coverage combines features found in both home and auto insurance, they are still classified as vehicles, so CTP insurance is mandatory (unless you live in New South Wales, where you will have to separately apply for CTP every time you renew your vehicle registration).
Remember, the whole point of insurance is peace of mind for you should the worst-case scenario happen. Third-party only (liability) insurance may be a cheaper option, but remember that you skimp on the potential benefits if you get involved in an accident; you may not have to worry about the other poor soul suing you for everything you’re worth, but now you’ve got a vehicle that needs repairs (at the very least, unless you’re willing to settle for duct tape and hardware store-bought nuts and bolts).
Do I choose a policy based on “agreed” or “market value”?
Market value policies are usually cheaper than agreed value policies, with some caveats. A “market value” policy means that a company insures your car and comes up with a premium estimate based on how much your vehicle is worth on the market in the time period just before you get involved in an accident. An “agreed value” policy involves an agreement between the company and the vehicle owner on how much the premiums will be worth on the policy.
Consider paying for a Market Value Policy if,
- You’re strapped for cash or like paying lower premiums
- You don’t mind benefits or payouts that have no guaranteed or set amounts
- Your vehicle is old or has few to no modifications (mods generally do not affect a car’s market value)
Consider paying for an Agreed Value Policy if,
- Paying for higher premiums is not an issue
- You prefer guaranteed compensation and benefit amounts (and flexibility in determining how much you think is necessary)
- Your vehicle is new or heavily modified (modification costs can be taken into account with agreed value policies)
The main consideration you need to take into account, is what you can afford. It’s one thing to plan ahead and protect your RV from financial risks, but it’s more important to make sure you can live comfortably while you’re supporting your safeguards.
What other things do I need to think about when selecting my RV insurance?
Before you make a decision, check the list of considerations below.
- Do I have other insurance policies with one company? (you may be entitled to discounts if you have multiple insurance plans with the same company)
- Do I get rewarded for a history of no claims?
- Do I get loyalty benefits for owning policies with a company after a number of years?
Additional Premium Costs
- Do I own a large RV? (towing and salvage costs are usually more expensive for larger vehicles, and may require additional insurance coverage)
- What is the excess I have to pay? (“excess” refers to the fees you pay when you file a claim)
- Is my RV parked out on the street or in a covered parking area?
- Will my insurance be accepted anywhere or only in certain states and territories?
Coverage and Benefits
- Does the insurance company provide round-the-clock, 24/7 assistance?
- Am I covered for transport costs in the event my RV gets written off as a “total loss”?
- What personal items are covered in my plan? (sometimes, only select appliances or furniture are covered in insurance plans concerning theft)
- Is my annex covered?
- Are the personal items in my trailer covered as well?
- Do I get a replacement vehicle for the period my motorhome is unusable?
- Does this insurance cover flood damage?
- Am I covered for repatriation costs if I plan on using my RV out of the country?
- Is medical and legal liability covered? (these are separate and distinct from property liability)
- Are boats covered in this policy?
The questions listed above are meant to be taken as points of discussion to provide you some level of clarity when it comes to selecting the kind of insurance that’s right for you.
It’s important to be insured. In today’s world where almost anything can happen to anyone, the last thing people need to worry about is how to pay for life’s events. Stay safe, stay educated and always remember to read the fine print!