RV insurance explained: a beginner's guide

A recreational vehicle is the one purchase that does not fit any of the policies a household already holds. It drives like a car, so it needs liability. It contains a kitchen, beds and everything a family takes for three weeks, so it needs contents coverage. It is parked at a campsite where a guest can trip over the sewer hose, so it needs premises liability. And it can be worth as much as a house while depreciating like a truck.

RV policies exist because none of the standard forms handles that combination. This guide separates the two families of RV, explains how each is insured, sets out the valuation choices that decide how a total loss pays, and covers the parts that matter to the growing number of people in the Southwest and the Mountain West who live in the rig for part or all of the year.

Motorhomes and towables are insured differently

A motorhome, whether a large diesel pusher, a van conversion or something in between, has its own engine and is registered as a vehicle. It carries its own liability coverage, its own uninsured motorist and medical payments coverage, and its own physical damage coverage, all on one policy that looks like an auto policy with more parts. A personal auto policy will not cover a motorhome; it is outside the definition of a private passenger auto.

A travel trailer, fifth wheel, toy hauler or truck camper has no engine. While it is being towed, liability for an accident follows the tow vehicle's auto policy, which covers the trailer as an attached unit. What the auto policy does not do is insure the trailer itself for damage, cover its contents, or provide liability once it is unhitched at a campsite. A towable RV policy fills those three gaps. A trailer that is only ever used a weekend or two a year and is worth little can sometimes be endorsed onto the auto policy for physical damage; anything more needs its own policy.

Three ways a total loss can be valued

The physical damage section covers collision, and comprehensive perils such as fire, theft, hail, wind, flood, vandalism and animal strikes. The premium and the outcome of a total loss depend on which of three valuation bases the policy uses. Actual cash value pays the market value at the time of the loss, which for an RV falls quickly in the first years. Agreed value fixes the figure at inception and pays it in full on a total loss; it is common for older, custom or vintage rigs. Total loss replacement, offered by some carriers on newer units for the first few model years, replaces a totalled RV with a new one of the same make and model, or the closest current equivalent, regardless of what the old one was worth.

Suppose a fifth wheel was bought new for $90,000 and totalled by a rollover in its second year. Under actual cash value the carrier might set the value at $65,000 and pay that less the deductible. Under agreed value at $85,000 it pays $85,000 less the deductible. Under total loss replacement it buys the current model year of the same trailer, which by then may list at $95,000, and delivers it. All hypothetical figures, and the premium climbs from the first basis to the third; the point is that an RV loan is often larger than the actual cash value for years, and only the second and third bases reliably clear it. Where neither is available, a gap endorsement covers the difference between the loan and the value.

Contents, attached accessories and the things outside

Personal effects coverage pays for what is inside the rig, clothing, electronics, tools, bicycles, kitchen equipment, at a limit you choose. A homeowner policy covers belongings away from home, but only up to a fraction of the contents limit and only against the perils of that policy, so a full RV of possessions is better insured on the RV policy. Attached accessories, the awning, the satellite dish, the solar array, the slide toppers, are covered as part of the rig only if declared; a large awning shredded by a monsoon gust in Quartzsite is the commonest small RV claim in Arizona and is worth asking about by name. Golf carts, generators, portable grills and screened rooms may need to be listed separately.

Liability at the campsite, and full-timer coverage

While the RV is parked and being lived in, an auto-style liability coverage does not respond to a guest injured at the site. Vacation liability, included in many RV policies and available on the rest, covers bodily injury and property damage at a campsite as a homeowner policy would at a house. For a household that still owns a home, that is enough, since the homeowner policy's personal liability follows the family and the RV coverage handles the site.

For someone who has sold the house and lives in the rig, there is no homeowner policy to fall back on. Full-timer coverage replaces it: personal liability that follows the insured everywhere, higher contents limits, medical payments to guests, loss assessment for those in RV resorts with association fees, and additional living expenses if the rig becomes uninhabitable after a covered loss. Carriers ask on the application how many nights a year the rig is occupied and treat full-time use as a different class; declaring part-time use while living aboard is the kind of misstatement that makes a claim contestable.

Roadside, emergency expense and storage

Three smaller coverages are worth understanding because they are used more often than the large ones.

• Roadside assistance: towing an RV requires a heavy wrecker, and the policy's version is sized for it. Check that it covers the towable and the tow vehicle together.
• Emergency expense: pays lodging, meals and transport home when a covered loss leaves the rig unusable away from home, and sometimes the cost of returning the repaired RV.
• Storage or lay-up: many carriers reduce the premium for months when the rig is declared in storage and not driven, keeping comprehensive on and suspending collision and liability. Driving it to the dump station during a declared storage month is uninsured for liability, so set the dates honestly and change them if plans change.

What is commonly excluded

Wear, tear and deterioration; rot, mould and mildew, a serious issue in a rig with a slow roof leak; damage by rodents and insects, a real problem in desert storage; mechanical and electrical breakdown; and tyre failure itself, though damage caused by a blowout is usually covered. Rental of the RV to others through a sharing platform is excluded unless the policy or a separate commercial policy addresses it. Use as a permanent residence without full-timer coverage may be excluded outright. Personal effects limits often exclude cash, jewellery and firearms above a small sum, and property in a detached storage shed at a seasonal site is a separate question.

What decides the premium

The class of RV comes first; a large motorhome is rated as a heavy vehicle. Then value, age, and the valuation basis chosen. Then use: the number of days a year on the road, full-time or part-time occupancy, and the states travelled, since an RV that winters in Arizona and summers in Idaho spends time in both. Then the drivers, their records and their experience with a large vehicle. Then the limits and deductibles selected, and whether the RV is bundled with the household's auto and home. Where the RV is financed, the lender will require physical damage coverage and be named on the policy.

How to use this

Decide the three things that shape the policy: whether the RV is a motorhome or a towable, whether anyone lives in it and for how many nights a year, and what it would take to replace it against what is owed on it. Those determine the policy type, the full-timer question and the valuation basis. With them answered we can compare the carriers we represent in Arizona, Nevada, Utah and Idaho, and if the policy already in place answers all three correctly, keeping it is the recommendation.