Specialty RV Insurance Policies vs. Typical Auto Policies

Big "I" Quarterly Newsletter - 1st Quarter 2009

Specialty RV insurance represents a tremendous growth opportunity, especially as the Baby Boomers increasingly flock to the RV lifestyle. The average specialty RV premium is over $1,000 and the average retention is about 5 years. This article seeks to explain some of the unique coverages available with specialty RV programs such as the Big “I” Markets RV specialty insurance program.

In previous articles we covered the foundation of specialized RV coverage with the depreciation protection coverage options. We have also talked about full-timer coverage options as well. Let us now cover other coverage options available on a RV specialty policy that an insured can’t get on a standard auto policy. Remember, captive agents typically do not have access to specialty RV programs and this is a large advantage to you considering the millions of RVs on the market and the widely held belief that State Farm is the largest insurer of recreational vehicles. Captive agents most often insure RVs on policies that are closer to standard auto policies.

The following is a list of specialty coverages available in several specialty RV insurance programs including the National Interstate RV program available through Big “I” Markets:

• Emergency Vacation Expense coverage is an option that reimburses out-of-pocket expenses that are a result of loss of use of the RV from a covered loss. This is available on every specialty RV policy with a $750 limit for recreational users and a $1,500 limit for full-timers. Hotel, meals, and car rentals are all examples of expenses that are reimbursed for RV’ers who are stuck in town while waiting for their RV to be repaired.

• Vacation Liability provides slip/fall type liability coverage while the RV is being used as a vacation residence. This liability protection follows the insured from campsite to campsite or RV lot to RV lot. It extends around the boundaries of the site to protect the insured from an incident the insured becomes legally responsible for. When and RV’er becomes a full-timer, full-time personal liability takes the place of this coverage.

• Diminishing deductibles is a coverage option that is hard to decline. When selected, it decreases the amount of the comprehensive and collision deductibles by 25% every claim free year until the deductible hits zero. For example, if the insured selects a $1,000 deductible for both comprehensive and collision, it will decrease by $250 each year the insured stays claim free and the insured will keep the premium benefit of paying for a $1,000 deductible! Most auto policies give only small credits to the deductible and will not let the deductible go to zero.

• Replacement Cost for Personal Effects coverage is an option that replaces belongings inside the RV destroyed during a covered loss. Clothes, pots and pans, silverware, plates, bowls, DVD’s, clock/radio, and lawn furniture are all examples of personal effects that are covered under this option. Items that are more costly such as high cost televisions that are not part of the RV, jewelry, stereos, and computers should be listed under Valuable Personal Property coverage.

• Extended Utility Trailer coverage is an option that covers utility trailers pulled behind a motorhome. Every policy automatically covers physical damage to a utility trailer up to $2,500. However, we can increase that coverage up to $99,000. As Rv’ers take more of their belongings with them on trips, utility trailers are becoming the norm. It simplifies things for the insured to include their trailer on the same policy as their RV.

• Golf cart/moped coverage is another option that simplifies things for the insured. We can add physical damage on a golf cart or moped that is not licensed for street use, but rather just for use in campsites and parks, onto their RV policy.

• Mexico physical damage is a great option available to any RV’er. This option extends comprehensive and collision coverage into Mexico as long as the insured purchases the Mexico liability coverage. This option usually costs $5 per year as opposed to the high cost of comprehensive and collision on a Mexico insurance policy.

• Awning replacement and Custom Equipment replacement are available options when the insured qualifies for Total Loss Replacement. Awning replacement covers the awning for the full replacement value during the first two model years of the RV. Custom Equipment replacement protects the equipment added after the original manufacture and extends during the same period as the Total Loss Replacement. These options protect the insured’s continual investment in their RV.

National Interstate also offers windshield replacement coverage in most states, which is a tremendous value considering the high cost of replacing most motor home windshields. When an insured hits the road permanently or just for a vacation, they need to feel comfortable that everything is going to be okay when the unexpected happens. A specialty RV policy covers more of the gaps that can arise during this time than an auto policy. The gaps can be filled for less coin as most of these coverage options are inexpensive and go a long way when needed.

Again, these coverages most often cannot be matched by a captive agent. Therefore, the RV policy represents unique value that you can offer your prospective insureds. Let the Big “I” Markets RV program and National Interstate Insurance Company help you win and keep more business. For more information log on to www.bigimarkets.com.