Introduction to Recreational Vehicle Insurance

For most Americans Recreational Vehicle insurance is a very expensive purchase. To make an informed decision you should learn as much as you can about the underwriting factors that affect the cost, the different amounts of coverage available, the requirements in your state, and about what insurance companies have the best rate for you.

Underwriting Factors

Insurance companies underwrite to assess risk associated with an applicant. That is, what groups are at a higher risk to make more claims. The groups with a higher claim history will pay more for Recreational Vehicle insurance. Underwriting factors that affect cost are:

  • Driving Record - Drivers with previous traffic violations and at fault accidents would be placed in a higher risk group.
  • Marital Status - Claims among married policyholders are less than single policyholders putting them in a lower risk group than single policyholders.
  • Residence - The location where you garage the vehicle (usually your residence) also affects the rates. More claims are made from urban areas than rural areas.
  • Age and Gender - Some age groups fall into higher risk groups. Males have more accidents than females. Teenagers have many more accidents than the rest of the population. A small number of states have prohibited insurance companies from using gender as a risk factor.
  • Use of Vehicle - Higher annual mileage will usually result in higher cost because of the higher exposure to risk. · Type of Vehicle - The type and cost of the vehicle you drive will affect the cost of the insurance.
  • History of Prior Coverage - If you were cancelled because of non-payment of premiums from a prior insurance company your rates in some states might be affected adversely.
  • "Better Risk Discounts" - If you qualify, discounts you should ask for:
    • Multiple Vehicles
    • Good Student
    • Safety Devices - Automatic seat belts, Anti-Lock brakes, Air Bags etc.
    • Drive a low amount of miles each year
    • Good Driver
    • Anti-theft devices
    • Driver Education-courses for young and old drivers
    • Vehicle and Homeowners policies with same company
    • Dividends>

Depending on the type of legal and financial responsibility system used in your state, you will need to purchase either recreational vehicle liability insurance or no-fault insurance.

Liability Insurance

Bodily Injury Liability Insurance protects you against claims of other people who are injured when you are at fault. It does not protect you against damage to you personally or your vehicle. It protects you from their damages such as medical expenses, lost wages, and pain and suffering. You will also be covered for damages if the accident was caused by a member of your family living with you or a person using your vehicle with your consent.

Bodily injury liability insurance is purchased with specific benefit limits. These limits address how much money the insurance company is committed to pay for any one victim in an accident and limits the amount they must pay for multiple victims. Most states require you to purchase minimum amounts of bodily injury coverage. If you raise your coverage your premiums will increase because the insurance company will be assuming a higher risk.

Property Damage Liability Insurance pays for any damage you cause to the property of others. It could be a dented fender, broken window, or damaged property. The insurance company will pay the claim whether you were driving your vehicle or whether it was driven by another person with your consent. Property damage liability insurance is purchased with specific benefit limits. Most states require you to purchase minimum amounts of property damage liability insurance.

Uninsured motorists coverage is protection for you. This coverage pays you if you are injured by a driver who does not have vehicle insurance or by a hit-and-run driver. This coverage takes the place of the insurance the other driver should have purchased but did not, or covers the amount the other driver's insurance does not cover. Uninsured motorists coverage is purchased with specific benefit limits. Most states require you to purchase minimum amounts of coverage. This coverage does not protect the other driver and may not cover damage to your vehicle.


Each state must implement either a Tort System or a No-Fault System. Liability insurance above applies to the Tort system. In a no-fault state your insurance company pays you directly for your losses as a result of injury sustained in an accident, regardless of who is at fault. If the other driver was injured in the same accident, the other driver collects losses from his or her own insurance company. You could be sued only under specific conditions. You could be sued if you are the driver at fault in an accident that causes very serious injuries to others.

Personal Injury Protection (PIP) is the most basic no-fault coverage. This coverage pays for the losses incurred due to injuries to anyone riding in your vehicle a minimum benefit amount per person for injury regardless of fault. The level of benefits varies widely among states.

The following coverages are normally included under PIP:

1. Medical Expense Benefits include all reasonable charges for medical, hospital, surgical, professional nursing, dental, optometric, ambulance, prosthetic services and X-rays.

2. Rehabilitation Expenses Benefit includes charges for psychiatric, physical and occupational therapy, and rehabilitation.

3. Work Loss Benefit includes coverage for loss of wages up to a specific limit for a specific time period following injury.

4. Funeral Expense Benefit covers all reasonable charges up to a specific amount for funeral services including burial and cremation expenses.

5. Survivors Loss Benefit provides a payment to your surviving spouse or dependents up to a specific amount for a specific time period.

Residual Bodily Injury Liability Coverageprotects your family and anyone else while in your vehicle with your permission in the event you are sued because of injuries caused to others. Each no-fault state has defined certain thresholds that, if exceeded, open the possibility of a suit. These thresholds can be based on specific dollar amounts, clearly defined injuries and/or death resulting from an accident.

No-Fault specifically excludes property damage liability for damage that you cause to the property of others. If you are at fault in such an accident, you will be held liable and can be sued for these losses. You must buy separate collision coverage to satisfy this risk.

Property Damage Coverage

Property damage is covered by either Collision coverage or Comprehensive coverage.

Collision Coverage pays for physical damage to your vehicle as the result of a collision with an object or another vehicle. This coverage is expensive and is optional but may be required by your lending institution or lessor. The higher the deductible, the more you will save on the cost of coverage. Collision coverage only covers your financial expenses for repair of your damaged vehicle. If the repair cost exceeds the current value of your vehicle the insurer will "total" the vehicle and pay you only what the vehicle is worth, not what it would cost to repair.

Comprehensive Coverage pays for damage to your vehicle other than the result of an accident, such as, theft, fire, severe weather, flood, and vandalism. It is not as expensive as collision coverage and the cost can be reduced as you increase the deductible. This coverage is optional but may be required by your lending institution or lessor.

Optional Coverages

Medical Payments Coverage pays for the medical and funeral expenses for you or others injured or killed in an accident while riding in or driving your vehicle even if you cause the accident. Claims include all reasonable hospital, surgical, chiropractor, X-ray, dental, professional nursing, prosthetic, and funeral expenses. It also covers you or members of your family if you are struck by any vehicle while walking or while riding in another vehicle.

Rental Reimbursement Coverage usually pays a specific amount for a specific number of days while your vehicle is being repaired.

Towing Coverage pays the cost of towing your vehicle to the repair shop.

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