If your home on wheels was totaled, how much can you spend to replace it? RV insurance isn’t exactly fun to research, but when you live on the road it’s imperative that you have adequate RV insurance total loss coverage.
The three main types of RV insurance total loss coverage
RV insurance plans costs and coverage varies depending on what you want to pay now in annual premiums, and what you can afford to pay later if the worst happens. Most RV insurance companies offer these three main loss protections.
Actual Cash Value policies are the default level of protection available by RV insurance companies. If you have this type of policy and your RV is in a serious accident or worse, your provider pays what your RV is currently worth on the open market. Your deductible will be subtracted from the payment.
Actual Cash Value is bare bones protection but it’s not without merit. This coverage is the cheapest available. And for many full-timers who start out with older, used RVs, it’s often the only choice of RV insurance total loss coverage. If you fall into this category, building a hefty savings account is imperative. That way you can easily bridge the gap between your payout and a replacement rig.
Agreed Value is a step up in coverage. This is what I have for my Arctic Fox fifth wheel. If my RV is totaled, my insurance company will cover the RV amount that we “Agreed” on when the policy was written.
Unfortunately, not all RVs are eligible for Agreed Value protection. My RV insurance provider requires RVs to be less than five years old for these policies. If your RV qualifies, underwriters must review the bill of sale to approve of the amount you paid.
But let’s say you got a screaming deal on your RV and it’s worth more than the documented sale price. In that case, you’ll have to work with underwriters to find the real value (usually obtained through NADA Guides or an appraisal). Once everyone agrees on the dollar amount, that is what you’ll get (less your deductible) in the event of a total loss.
In a worst-case scenario, Agreed Value policies help you buy another RV of comparable quality. The downside of this coverage is you’ll pay annual premiums that cost more than Actual Cash Value policies.
Full loss replacement
This is the Cadillac of total loss coverage for RVs and the sky-high premiums reflect it. Full Loss Replacement is usually only available on RVs less than one year old. If you obtain this coverage and you suffer a total loss, the insurance company pays out what it costs to buy a brand new RV. The replacement will be of similar make and model.
My provider will do this for the first five years of ownership. After that, insureds with this coverage must step down to Agreed or Actual Cash Value policies. Full-Loss Replacement is ideal if you can’t afford to replace your brand new RV. If you make RV loan payments, ask your agent if you can secure “Gap Coverage.” This protection also pays RV loans in the event of a total loss.
Nobody likes to think about RV catastrophes, but the more you get out in the world and travel, the greater the risk of encountering a mishap. Securing good full-timer RV insurance coverage for your needs lets you roam without worry.