Navigating the Road of RV Insurance
Large-scale weather events are a harsh reminder of the power of nature. Protecting what matters most, including recreational vehicles (RVs), is crucial. The Brookings Institute recently reported that climate-related insurance claims are on the rise, with wind/hail, water damage/freezing, and fire/lightning being the leading causes of property damage.
Even if your customer can drive or pull an RV away from immediate harm, the RV insurance market isn’t immune to weather-related impacts. As you offer a customer a home on wheels, RV owners need to understand key coverages for physical damages, mirroring an auto policy, and liability exposure, similar to a home policy.
Understanding and buying RV insurance can be complicated and costly once your customer has selected their ideal RV. Fortunately, licensed local, independent insurance agents can assist consumers in comparing coverage across multiple carriers. Partnering with an insurance agent is important because the best agents can demystify coverage or highlight risks requiring special endorsements, which can influence premiums.
But what exactly are we buying when paying an insurance premium? Indemnification.
Insurance carriers are legally obligated to provide indemnification to policyholders. That is, insurance offers financial protection and compensation for covered losses or harm. However, insurance remains a mystery to many, even as premiums increase.
“Because insurance protects people’s most important assets, it’s crucial that policyholders understand their coverage. But unfortunately, our survey shows there is a considerable insurance knowledge gap among consumers,” said Charles Symington, president and CEO of the Independent Insurance Agents & Brokers of America (Big “I”).
According to a Trusted Choice and Big “I” study, “while 86% of respondents said they had a strong understanding of what their policies covered, when their knowledge was put to the test many were incorrect or unsure about coverage specifics.”
Coverage specifics for RV owners are more nuanced because of storage limitations and weather exposure.
“I think one thing that we have to be cognizant of is climate change and weather in general,” said Christopher Bartram, Safeco’s national specialty vehicle product director. “Given the size of RVs, they are typically not garaged in the same way an auto would be. Therefore, the exposure to weather risk is also more pronounced than a regular car.”
Protecting an RV from the elements can be challenging, particularly as the market grows and demand for RVs and storage solutions rebounds. According to Business Research Insights, “density in cities has affected the availability of individual facilities for storage, and as such owners are compelled to look for professional services to secure their property against vices such as theft, damage or even deterioration due to unfavorable weather conditions.” RV storage also impacts insurance premiums.
Finding the right RV insurance coverage can be a challenge. Here are some tips:
- Peer-to-Peer Rentals: If your customer is not a full-timer, make sure the policy allows peer-to-peer rentals. As the “median annual usage for current RV owners remains steady at 20 days,” RVs often sit unused, which has fueled the peer-to-peer sharing economy. With the advent of platforms like Outdoorsy, RVshare, and RVezy, this is becoming more prevalent. Not all insurance carriers permit renting, even though rental companies provide coverage; some policies may prohibit it. Your customer needs coverage before, during, and after the rental period if they plan on renting their RV.
- Independent Insurance Agents: Save time and find an independent insurance agent to shop for RV insurance. Binding coverage online often means the agent is a captive agent, representing only one company. Independent agents represent multiple carriers and can compare policy features and benefits for your customer’s RV and insurance history. This approach helps consumers find the right coverage at the right price.
- Coverage Explanation: If your customer is like most Americans who do not fully understand insurance coverage, ask an agent to explain features, benefits, or RV-specific endorsements. These can include endorsements for vacation liability, damages in Mexico, personal effects, or choosing an agreed-upon value or replacement cost option in the event of a total loss.
- Know What You’re Paying For: Insurance is a financial protection product, not a maintenance policy. It won’t cover repairs from regular use or wear and tear. However, insurance steps in if another vehicle, animal, or event damages your customer’s RV. With a claim, the insurance company will verify and ensure the customer is paid what they’re owed.
Successfully navigating RV insurance involves more than just paying premiums. An RV is a lifestyle choice and investment. Protecting that investment from unexpected risks, whether on the road or in storage, is critical. By partnering with knowledgeable independent insurance agents and understanding specific coverages, RV owners can safeguard their investments.
With a record 11.2 million RV-owning households and 9.6 million more households intending to buy an RV, that’s a lot of investments that need protection. Make sure your customers partner with the right agent to find the right RV coverage.
