RV Insurance vs. RV Warranty Protection: What Do They Cover, How Are They Different, and Do You Need Both?
RV life can be unpredictable. In fact, that’s a huge part of why it’s so sought after! Unexpected friends, destinations and experiences are waiting around every corner. Unfortunately, not every surprise is a good one. From bumps in the road—literally—to broken items in the coach, sudden repair costs can be a financial headache for any traveler.
The good news? There are a variety of insurance and warranty products available to help you deal with these obstacles. It’s important to know what these policies do, which ones are required, and how different coverages can work together to provide peace of mind while traveling.
Let’s start with the basics: What do these policies cover?
RV Insurance
This type of coverage generally comes in the form of comp and collision insurance. This is similar to the type of insurance drivers are accustomed to carrying on their personal automobiles, and protects against the financial ramifications of an accident, damages caused by extreme circumstances like fire or vandalism, or vehicle theft. A minimum amount of liability insurance is required by every state, so insurance is one of the first things a new RVer should look into before hitting the road.
There are many different types of RV insurance, and each traveler will need to decide what level of protection feels comfortable for them. In general, RV insurance breaks down into the following categories:
Minimum Liability Insurance
This type of coverage is the minimum required by almost every state, and will extend basic protection for accidents. This includes paying for damages to the other vehicle, as well as bodily injury to all drivers and/or passengers involved in the incident. Liability insurance may also cover any legal action that arises from the accident.
Comp & Collision RV Insurance
A step up from minimum liability coverage, comp and collision insurance will include protection for collision damages and injury, as well as a variety of additional options. This type of policy will often protect you in the event there is an uninsured motorist involved in your accident, and will extend protection to your rig for damages caused by weather, theft, vandalism, and more.
Many RVers, especially those who travel often or own high-end coaches, will choose to add on a variety of protection options ranging from pet injury coverage to unlimited towing and roadside assistance, personal item coverage for belongings kept in your rig, and even loan or lease payoff insurance. Another popular insurance add-on is rental car reimbursement, which will pay for alternate transportation in the event the RV is forced to remain in a repair shop overnight, or even longer.
Total Loss
Another component to your comp and collision RV insurance is Total Loss. This is the coverage that defines payout limitations in the event the damage to your RV results in a total loss. The most common option is Market Value, meaning that you will be reimbursed for the current valuation of your vehicle at the time of loss. For a higher premium, RVers can upgrade this to Total Loss Replacement, which will extend coverage to replace your loss with a new RV of like kind and quality, or at the value of your original purchase price.
Full-Time RV Insurance Notes
Those traveling in their RVs full-time will also need to consider insurance options that raise their limit of liability, or cover unexpected costs like medical payments.
Often, the insurance company will require full-time travelers to purchase a package offering coverage similar to a sticks-and-bricks homeowners’ insurance policy. This will cover you for incidents such as liability claims made against you by a visitor to your home-on-wheels. These packages may also raise the limit of liability for personal property held in your rig.
RV Extended Warranty
The term “Extended Warranty” is actually a misnomer, as a true “warranty” is associated with the company who manufactured the vehicle. The coverage this term refers to is actually a protection policy called an RV Extended Service Contract, and offered by a 3rd party outside of the unit manufacturer. However, using “Extended Warranty” is a simple and recognizable way for RVers to understand these protection contracts, so it remains the term of choice within the industry.
RV extended warranties are specifically designed to cover the repair costs for the mechanical failure of a wide array of components within your coach. Most extended RV warranties will pay full parts, labor, and diagnosis costs for these covered repairs. These contracts will specifically exclude any failure caused by an accident, weather, or physical damage of any kind. In this way, warranties can be seen as the opposite of RV liability insurance.
There are many different RV warranty providers, contracts, and levels of coverage, but they do fall into a few specific categories. These are:
Exclusionary RV Extended Warranty
An exclusionary policy is the highest level of coverage available. Essentially, this type of policy will give you a specific list of what is excluded, or not covered by the policy. If your mechanical failure is not on this list, it will be covered. This is a great option for travelers looking for total peace of mind and the convenience of knowing someone will be there for them when they run into problems.
Examples of exclusions include damages caused by collision, weather, or lack of maintenance, as well as physical items like paint, carpeting, and furniture. Because these policies are specifically designed to cover mechanical components, you can expect all of your major appliances, engine items, and heating/cooling to be covered. Exclusionary RV extended warranties will pay for failed items such as your engine, transmission, and drive axle (when applicable), as well as coach components like your refrigerator, television sets, wiring, and water heater. Most exclusionary policies will also extend coverage to your leveling system, slide-out mechanism, and even luxury items like solar panel, washer/dryers and electronics.
Listed Component Policy
A listed component RV warranty, also known as a comprehensive policy, is the exact opposite of an exclusionary warranty. That is, a listed component warranty will give you a specific list of what is covered by the policy. If your failure is not on this list, it will not be covered.
Items covered by a listed component policy include your engine and powertrain (when applicable), appliances, heating and cooling components, slide-outs, leveling jacks, and more. This type of policy is very comprehensive, and is a more affordable option than the exclusionary coverage defined above.
Powertrain Only RV Extended Warranty
For RVers who are only worried about the most expensive potential failures on their coach–like a $30,000 diesel engine–there is a Powertrain Only policy. As identified in the name, this type of RV extended warranty will pay for breakdowns in your engine, transmission, and drive axle. This is an affordable way to avoid the most expensive repair bills you might face, and is a great option for those who are not concerned with day-to-day items in their coach.
RV Insurance vs. RV Extended Warranty
RV insurance and RV extended warranties can be considered the inverse of one another. RV insurance is specifically designed to cover repairs required due to collision, physical damage, or weather. On the other hand, RV warranties are designed to cover repair costs to mechanical failures as long as they are not the result of collision, physical damage, or weather.
Another main difference between these two types of coverage is the purchasing process. RV insurance is sold by many major providers and brokers, and can often be bundled with existing coverages to save money. RV warranties are only offered by dealers and a small number of online providers, and the cost difference between providers can be startling. Even further, extended RV warranty coverage can be locked in for a significant period of time—up to seven years for brand new RVs. Insurance, on the other hand, will need to be renewed more regularly.
There’s no arguing that both types of coverage will help to safeguard a traveler’s budget, but does every RVer need both?
Should I have RV Insurance?
RV insurance is required by law, and therefore isn’t negotiable. The type of insurance chosen, as well as any optional add-ons, should be determined by several factors. Full-time RVers, for instance, will need higher levels of coverage and liability limits, as they take on more risk simply by traveling often. RVers who use their coaches infrequently and don’t travel far may seek less coverage and smaller premiums.
Budget also plays a role in choosing the right insurance. Smaller premiums may be nice now, but you’ll need to consider if you are able to pay for a high deductible in the event of an accident or unexpected damage to your rig.
Do I need an RV Extended Warranty?
Let’s start with probability. Statistics show that 3 out of every 10 RVs will face a major mechanical failure by just their 2nd year on the road. This number jumps to 8 out of 10 by their 5th year, and nearly every RV by their 8th year in service.
The next logical question: just how expensive are these repairs anyway? Current claims data shows the average RV repair costs $300 per hour between parts and labor. These costs are only expected to go up, due in large part to the mechanical sophistication of modern RVs. With more technology in motorhomes and towable RVs than ever before, the level of expertise required to complete repairs is causing a rise in hourly labor rates and part prices.
So, your RV will breakdown, and the repair bills will be expensive when they do. An RV extended warranty will step in to cover the costs of these major repair bills, allowing you to control your budget even in the face of unforeseen breakdowns. Many RV travelers have found that pairing their insurance with an RV extended warranty provides the ultimate peace of mind.
RV warranties are also a huge source of confidence while traveling. They add the convenience of knowing someone else will handle the costs of repairs, as well as communication with the mechanic. A reliable RV warranty will cover you anywhere in the United States and Canada, so even if you’re far from home and unable to visit your trusted mechanic, you have the peace of mind that any licensed repair facility will be able to get you back on the road. Even further, they can help to address safety concerns while RVing. If you are stuck in an unfamiliar area or on the side of the road, your RV warranty provider will be there to help guide you through the claim process.
An RV extended warranty may not be the right choice for every RVer, however. There is limited eligibility for coverage, so owners of vintage RVs, or any vehicle older than 20 model years, will not be able to secure coverage. Additionally, motorhomes with over 125,000 miles will not be eligible for coverage.
Whether or not to purchase warranty coverage also comes down to each individual traveler’s desired level of risk. Those RVers who are easily able to come out of pocket for major repairs may choose to forego coverage, or to secure only catastrophic protection like an Engine and Powertrain policy. Additionally, if an RVer is looking to have commonly excluded items covered by the policy–including aesthetic components, maintenance, or physical damage–extended RV coverage may not be the best fit. There is no policy that covers absolutely everything, so a good understanding of what will not be covered is crucial to the decision process when purchasing coverage.
RV protection shouldn’t be a mystery. Whether or not to invest in an RV warranty as a compliment to required RV insurance is a personal one, and will be decided by each individual’s travel plans, type of RV, and desired level of risk. However, every traveler should know exactly what is available to them! After all, a bit of research now can make a huge difference toward a peaceful road ahead.
This information is for educational purposes. VIARV shall not be responsible nor retain liability for RVer’s use of the provided information. Prior to making any RV service decision, you are advised to consult with an RV professional.
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