RV INSURANCE VS RV WARRANTY: 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: A SUMMARY
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. One key difference is that the coverage also applies to damage to living area of the RV (sometimes called the coach) in addition to the automotive functions of the vehicle.
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) 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. Insurance doesn’t typically cover damage from frozen pipes, so it’s important to winterize your RV during colder months (and dewinterize it before hitting the road when it warms up—RVs require a lot of upkeep).
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.
If you’re looking for RV insurance or wondering if you are currently paying too much for your policy, ARW can help you find the best quote for RV insurance for your vehicle.
RV WARRANTIES EXPLAINED
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. Knowing the age of the appliances in the RV helps avoid the surprise when they inevitably breakdown.
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 AN RV WARRANTY
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 TYPE OF COVERAGE 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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