RV Warranty vs. RV Insurance: Which Do You Need?

A lot can happen on the open road. Adventure, spontaneity, the unexpected—these are reasons many people choose to purchase an RV and see the country. Unfortunately, the unexpected isn’t always good. Sudden breakdowns or accidents can put the brakes on your travel plans and empty your bank account. 

RV Insurance and RV extended warranties are the inverse of each other, providing separate and complementary protection based on the reason for repairs.

Simply put, insurance covers damage caused by accidents and other events, while warranties cover mechanical failures and wear-and-tear. But there’s more to it than that.

RV Insurance

An RV insurance policy functions similarly to car insurance. Motorhomes, whether they are Class A, B, or C, require the same amount of minimum liability auto insurance as a car to drive legally on the road.

Liability insurance has a specific function: if you cause an accident, the insurance company covers the cost of property damage and bodily injury for the other driver. 

Motorhomes and towable recreational vehicles (like 5th wheel trailers and toy haulers) and require comprehensive and collision coverage if the RV purchase is financed. This applies to a new RV or a used RV.

Collision coverage offsets the cost of damage in an accident caused by the owner, and comprehensive coverage protects owners if the RV is damaged by events such as natural disasters, fire, or theft.

Liability, comprehensive, and collision are the most common types of RV insurance that owners purchase, but other coverages exist for things like personal belongings stored in the RV and damage caused by uninsured motorists.

There is even coverage that, in the event of a total loss, replaces the RV with a similar model or reimburses the original purchase price to the owner.

RV Warranty

RV warranty coverage picks up where RV insurance ends. A warranty covers mechanical breakdowns and repair work caused by the everyday operation of the vehicle rather than repairs caused by accidents, weather, or theft.

An Extended warranty is a vehicle service contract. When you enter into a service plan with a warranty company, they agree to pay the repair shop for labor costs and parts in the event that the RV breaks due to mechanical failure. Each service contract lists the particular issues and items that are covered.

True warranties are offered by the RV manufacturer, but extended warranties protect against repair costs for just about any issue a manufacturer’s warranty would cover.

RVs are complex machines—most homes stay in one place. RVs are subject to potholes, steep grades, high speeds and winds, and RV maintenance is like taking care of both a house and a car.

According to Everything About RVing, 30% of RVs will have a major breakdown within two years of operation. By the end of five years that number rises to 80%. While travel trailers and fifth wheels are not motorized, they’re still subject to the ravages of the road.

RVs are also expensive to repair. RV Repair Co, an online RV service center directory, lists the prices of some of the most common repairs: a diesel engine costs up to $25,000, generators cost up to $10,000, and a refrigerator can cost up to $2,500. Air conditioner repairs can be pricey, too. Warranty plans can cover these repair costs and others, and there are several types of coverage offered.

Many coach items such as the water heater and fresh water system are much more likely to breakdown than they are to be damaged, but some Rv’ers mistakenly believe that insurance will cover these failures.

Exclusionary Policy

The most extensive coverage can be found under an exclusionary policy, and the coverage is simple. The policy contains a list of noncovered items, typically including things like water damage, damage caused by collisions, cosmetic items like paint and carpet, and nonmechanical items like furniture and cabinetry. Anything not listed under the exclusions is covered by the policy.

These plans protect both functions of a motorhome, covering failures of its motor vehicle function, like engines and transmissions, as well as the appliances in the coach, such as refrigerators, water heater, televisions, wiring, and cooling systems. They also cover luxury features such as slide-out mechanisms, leveling systems, and even solar panels.

Comprehensive Policy

A comprehensive policy, sometimes referred to as a listed component warranty, is the opposite of an exclusionary policy. This policy provides a list of items that are covered; anything not found on the list will not be covered by the plan. 

While the coverage isn’t as all-encompassing, comprehensive policies often cover many of the same failures that an exclusionary policy covers. They are also more affordable.

Drivetrain/Powertrain Policy

A comprehensive policy, sometimes referred to as a listed component warranty, is the opposite of an exclusionary policy. This policy provides a list of items that are covered; anything not found on the list will not be covered by the plan. 

While the coverage isn’t as all-encompassing, comprehensive policies often cover many of the same failures that an exclusionary policy covers. They are also more affordable. Note that regular maintenance, such as oil changes, are not covered by warranties or insurance.

Where to Purchase

Extended RV warranties can be purchased through the RV dealership at the time of purchase or through a third party at any point. Buying from a third party warranty company instead of an RV dealer has a few benefits.

First, coverage is generally more expensive through the dealer, and coverage options are more limited. If the RV purchase is financed, then the RV owner will be paying interest on the cost of warranty as well as the cost of the RV. If the owner chooses to cancel the coverage, the monthly payments will not decrease Instead the payments will simply end sooner.

Purchasing with a third party allows RV owners to shop around and compare prices and coverage. Most companies provide coverage info online, and obtaining a quote is easy. Unlike extended warranties purchased from dealerships, these warranties can be cancelled for a pro-rated refund.

For research, use resources like the Better Business Bureau and Google reviews to find the companies with good reputations. Websites like Today’s Best Company compare different companies and plan features.

When reading a company’s policy, it’s a good idea to pay attention to who can perform repairs. Many companies allow any licensed repair facility in the United States or Canada to perform repairs, making it easy to find RV services anywhere you want to travel.

Not all RVs are eligible for coverage. Most companies have mileage or age limits on the RVs they cover. Because older RVs are more likely to require frequent service, policies can be more expensive.

Which Do You Need?

If the RV is a motorhome or if its purchase is financed, some form of insurance will be required. Beyond that, purchasing additional coverage through insurance or an extended warranty relies on the owner’s level of comfort with risk (or their belief in their own good luck).

Some RV owners can afford an expensive repair without destroying their budget or compromising their RV lifestyle, while others prefer the peace of mind that coverage provides. 

Insurance covers you in the case of events like fire, vandalism, theft, and collisions. But even if you never have an accident, you’ll likely need major repairs at some point. Warranty coverage allows you to budget for those repairs and to be protected from the largest portion of the costs. It also protects your RV against rising repair costs over time, since the price for coverage and the deductible for repairs is set at the beginning of the plan.

Many full time RV’ers have an extended warranty plan because of the peace of mind and flexibility it brings to the RV lifestyle—if you have an issue, you can use your choice of repair facility, and if you’re disabled roadside, you can take advantage of mobile RV repair. In many of these situations, insurance does not help RV owners stay on the road.


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Exclusionary vs Inclusionary: RV Warranty Plans Explained

When buying an extended warranty, the options can be overwhelming. The different policies and add-ons can confuse RV owners, leaving them unsure how the plan saves them money. Nothing seems simple about finding the right warranty plan.

Warranties are complex, but they’re straightforward. With a little information, it’s easy to understand. Warranties assist with repair costs when an item suffers mechanical breakdown. Where plans differ is in which items they cover.

There are two main categories of extended warranties: Exclusionary policies and inclusionary policies. They may offer similar coverage, but they do so in different ways.

Exclusionary Coverage

Exclusionary policies are the most comprehensive plans offered for RV extended warranty coverage. They are also the simplest policies to understand. An exclusionary policy lists the items that are not covered under the policy, and anything not listed under the exclusions is covered. America’s RV Warranty offers the Complete plan, an exclusionary policy for motorhomes and towables.

Warranties cover mechanical failure, so the policy specifically excludes damage from accidents, weather, or fire. Also excluded are nonmechanical items and items that are replaced through normal operation, such as oil filters. Here are a few examples:

  • Carpet
  • Cabinets
  • Headlights
  • Rust
  • Pre-existing conditions
  • Paint
  • Noise from wind
  • Cosmetic Damage

Inclusionary Coverage

Often called listed-item coverage, inclusionary coverage works the opposite way, providing a detailed list of what’s covered. If it’s not on the list, it is not covered under the plan. Here are a few examples of items included in an inclusionary policy:

  • Engine
  • Transmission
  • Kitchen appliances
  • Fresh and waste water components
  • Heating and AC components
  • Generator
  • Leveling system
  • Slide-out mechanisms

Inclusionary plans allow customers to find the level of coverage that suits their needs. With America’s RV Warranty, listed item coverage for motorhomes comes in three different levels: Basic, Plus, and Total.

The Basic plan covers the engine and transmission, the most expensive items to repair on a motorhome. For those who want the biggest expenses covered, this plan offers peace of mind.

The Plus coverage adds several automotive coverages to the engine and transmission, including steering components, brake components, engine cooling components, chassis AC components, and more.

The Total plan goes one step further adding coverage for the items inside the coach, or home, of the RV. Items include fresh and waste water components, generator, AC and heating components, kitchen center components, and many more. For towable RVs, the Total Coverage includes items in the coach as well as the suspension.

Additional Coverages

For both exclusionary and inclusionary policies, extra coverage options are available. These coverages do not come standard with rv extended warranty policies. Not every RV owner will need them, but they may help bring peace of mind to the road.

Extended warranty companies offer RV services like roadside assistance, towing, and travel expenses, but they are usually separate from the policy terms. For this reason they aren’t on this list.

Power Surge

When an RV is hooked up to an external power source, it is prone to power surges. Nearby lightning strikes or mismanaged power grids can send a surge of electricity through the lines. Issues with the electrical hookup (often called a power pedestal) can also cause these surges. This coverage will pay for the repair of items damaged in the power surge, covering up to $2500 of repairs or replacement.

Commercial Use

Commercial Use add-ons extend coverage to RVs that are owned or operated by a business.

Consequential Loss

This add-on provides coverage for failure of a covered item even when its failure is caused by a non-covered part.

Navigation Package

This add-on covers navigation components on motorhomes. Coverage includes the compass, global positioning system (GPS), onboard communications system, GPS satellite antenna, back-up warning system, and electronic driver information display and module.

Tire and Wheel

This coverage pays for the repair or replacement of tires or wheels if they are damaged by a road hazard like a nail or a pothole. If the RV is a towable, this coverage also applies to the tow vehicle while it is towing the RV.

No warranty covers everything

No matter the company, no RV warranty covers everything. Damage due to accidents or weather will not be covered—this is where RV Insurance helps. Warranties cover the costs of parts and labor to repair covered items, but not damage caused by those items. This means if the refrigerator leaks and ruins the carpet, the warranty will cover the refrigerator, but not the carpet.

Warranties don’t cover maintenance. The RV owner handles the costs of changing the oil and replacing fluids. In fact, an RV must receive maintenance, otherwise failures might not be covered. Maintenance is also required to satisfy the manufacturer’s warranty. The RV dealer sometimes offers discounted or free maintenance during the first year.

By reading through the terms and asking questions, RV owners can understand exactly when and how they will be protected by a warranty. This knowledge allows them to get the most out of their coverage and be prepared when something breaks down.

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