RV Replacement Cost Settlement

There can be quite alot of confusion among the RV community about this subject so I want to just do a review on what your options are when purchasing RV insurance.

I am going to base this information on how the big 3 companies (Progressive, GMAC and National Interstate) describe this coverage.

Total Replacement Cost:

This coverage is available on new RV's with all 3 companies. (Some will allow the RV to be a couple years old). In the event of a total loss, this coverage replaces the current RV with a brand new untitled RV that is as close as possible to the same make and model you had with comparable equipment. Even if it cost more than you paid for yours. This is a no-brainer and is inexpensive. If you buy a new RV make sure you have this coverage!!

Purchase Price Guarantee:

Once the RV you purchased new is 5 model years old, the 3 companies will revert your Total Replacement Cost coverage to Purchase Price Guarantee automatically. This means that in the event of a total loss, you will receive your purchase price back. Therefore, I cannot stress how important it is for you to always keep your original purchase invoice. I always try to have my clients send me a copy for safekeeping.
I have asked all 3 companies how long this coverage will remain. All three said either 20 years or forever and since no one seems to keep their RV's for that long, we have never had to put that to the test.

Agreed Value:

Progressive is the only one that offers this coverage and I think it's also a no-brainer if you have purchased your RV within the last 2 years. They will insure the RV based upon your purchase price and agree to pay you that amount in the event of a total loss. It doesn't matter if the RV is not brand new at the time of purchase. Again a copy of your purchase invoice is required. In South Dakota, they have allowed this coverage to be added even if you purchased your RV over 2 years ago as long as you provide a current NADA print out showing the value. www.nada.com. National Interstate offers this coverage on bus conversions but will require a qualified appraisal.


Actual Cash Value:

If you do not see any of the above three coverages listed on your policy, then most likely you have an Actual Cash Value loss settlement. This means that the company will depriciate the RV and take into account the condition, mileage, existing damage etc. I'm not a fan if you can get one of the above. Especially on your higher valued RV's

I want to make mention that if you have an RV that has had Total Replacement Cost and it is now 5 years old, you may want to consider dropping the Replacement Cost/Purchase Price Guarantee and just insure the RV for it's current value. This amount will need to be adjusted based upon market conditions and should be reviewed at renewal time to make sure it is accurate. The plus side to this is that insurance premiums are based upon the value of the RV. So, if you have an RV that has depriciated significantly, you could reduce the value on the policy, insure it for Actual Cash Value and pay less for your policy. Personally, I am OK with this if your RV is under $50,000 in value AND if you do not owe money on it.