If you own a recreational vehicle (RV), you should insure it against perils such as vandalism, theft, and accidents. This is important because, between 2016 and 2018, the U.S. Fire Administration (USFA) received about 3,700 fire reports related to recreational vehicles, which resulted in at least $58 million worth of losses. You should purchase the right RV insurance for your vehicle, especially since your typical car insurance policy may not cover it. Total loss replacement RV insurance is one of the suitable coverages you can purchase. Read on to find out more about RV insurance.
Does Your RV Insurance Include Loss Coverage?
The type of RV insurance coverage you have determines how much the insurance company will cover in case of damages. For instance, while collision coverage pays for damages resulting from a collision with an object or another vehicle, comprehensive coverage covers non-collision-related disasters, per the Insurance Information Institute (III). Loss coverages are necessary when your recreational vehicle undergoes massive damage that is beyond repair. Therefore, if you want your RV insurance to replace your vehicle in case of damage, consider the following loss coverages.
- Actual Cash Value Coverage – As the name implies, this policy pays the actual market value of your recreational vehicle at the time of damage. For instance, if your RV has a value of $40,000 at the time it goes up in flames, the insurance company will only pay you $40,000. Due to the depreciation that comes with time, actual cash value coverage may not be the best option to cover the loss. While this may be better than having an uninsured RV, you will have to spend way more than $40,000 to purchase another vehicle.
- Agreed Value Coverage – When purchasing your RV insurance, you can agree with the insurance company on the amount they will pay you in case you lose your recreational vehicle. According to the Kampgrounds of America (KOA), the agreed value coverage allows this kind of arrangement and mainly works for vehicles that do not have a standard market price. This means that you can even negotiate with the insurance provider to pay higher than the purchase price provided you prove that the RV is worth the amount you are asking for. For instance, if you got a 20% discount on your recreational vehicle during purchasing, the agreed value could go up to 100% of the market price if you can prove its value.
- Total Loss Replacement RV Insurance – Also known as Full Loss Replacement, this policy covers the total replacement cost of your RV before depreciation. For example, if you bought your recreational vehicle at $100,000, total loss replacement insurance will pay you $100,000 in case your vehicle undergoes extreme damage.
Total loss replacement is often considered the best type of policy to purchase. This is because, in the event of irreparable damage to your RV, the amount you receive from this insurance coverage will enable you to purchase a new recreational vehicle. While this sounds like a good deal, take note that the insurance company will charge you higher premiums for this type of loss coverage. Even so, simple risk mitigation measures such as regular maintenance can earn you some discount on your RV insurance premiums.
These are some of the most common types of RV insurance policies. For more information on RV insurance, contact the experts at Jack Stone Insurance Agency. We can help you find the right policy for your needs.