Auto and RV Insurance: An Explainer

RV owners love the open road, the great outdoors, the wide-open sky and the next adventure. About 11.2 million U.S. households own a recreational vehicle (RV), according to a 2021 RV Industry Association report.

If you drive your RV, you will need auto liability insurance at the very least.

When it comes to RV insurance, recreational vehicles are divided into two categories: RVs that are towed and RVs that are driven. If you tow a trailer or camper, your RV does not need to be insured—the towing vehicle's insurance will cover travel trailers, campers and utility trailers. If you drive your RV, you will need auto liability insurance at the very least. Once you have your liability insurance, you can start to think about specialized RV insurance, such as trailer insurance, replacement cost personal effects and emergency expense, among others.

Travel trailers, utility trailers and campers don't need liability coverage, but they can still be insured for damage.

Auto and RV Insurance

If you drive your RV, it needs to be covered by liability auto insurance just like any other vehicle on the road. Available in all states, liability auto insurance covers any bodily injury or property damage that your RV may cause in an accident.

Your RV is not covered by your auto insurance.

However, your RV is not covered by your car's liability auto insurance; that is, your RV can't be added on to your auto policy. If you drive your RV, you must purchase a separate liability policy for that RV.

Liability Insurance Is a Must for RVers

The amount you pay for liability insurance on your RV will be determined by the same factors that determine the amount you pay for your car insurance: your age, gender, zip code, driving history, insurance history, credit rating, vehicle make and model, and miles driven, among other factors. Of course, when it comes to RVs, the miles driven may be a big factor, especially if you only drive your RV for a short time each year.

Each state has its own mandated minimum liability insurance requirements for bodily injury and property damage. For instance, Texas demands a minimum of $30,000 per person and $60,000 per accident for bodily injury liability and $25,000 per accident for property damage. While every state demands the same three different types of coverage, the dollar amounts, or liability limits, differ.

To find out your state's minimum liability requirements, go to your state's Division of Motor Vehicles or Department of Insurance website or call a licensed insurance agent.

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Liability Insurance and Large RVs

Because of their size and weight, recreational vehicles can cause more serious bodily injury and property damage than your average car, meaning you could be personally on the hook for claims that exceed the state-mandated minimums. So, many RV insurance customers prefer to purchase liability coverage in amounts greater than their state's minimum requirements.

The recommended coverages vary based on the value of your personal assets, your net worth and your earning potential. Also, with higher liability limits, you may be eligible for a personal umbrella policy, which would insure you against claims that exceed those higher liability thresholds.

Discount for Bundled Auto-RV Insurance

Auto insurance companies offer discounts that lower the costs of accident protection for customers who qualify for those discounts. For example, multi-vehicle discounts save customers money on the total cost of insuring two or more vehicles at a time. If you purchase an auto policy and an RV policy from the same insurance provider, you will most likely be eligible for a multi-vehicle discount, so call your insurer and ask about this bundling discount.

Comprehensive and Collision Coverage

Neither liability auto insurance nor specialized RV coverage protects your RV if you are in an at-fault accident. That's why many RVers decide to get comprehensive and collision, which pays no matter who is at fault.

Many RVers choose full-timer RV insurance.

Together, comprehensive and collision are called "full coverage" insurance. Comprehensive covers passive damage—that is, when your RV is impacted by falling objects, natural disasters, fire, vandalism, theft, an animal or a similar event. Collision covers active damage—that is, when your RV collides with another vehicle or a fence, a tree or any other non-living object.

You should also consider purchasing coverage for an accident with an uninsured or underinsured motorist as well as personal injury protection (PIP), medical payments and GAP coverage.

Specialized RV Insurance

Good Sam, National General, RVInsurance.com, Nationwide, Safeco, Foremost Insurance Group and other U.S. insurance carriers offer specialized RV insurance, which is a mix of both vehicle and homeowner’s insurance. Unlike auto or home insurance, this RV insurance coverage comprehends both living and driving purposes.

Specialized RV insurance is a combination of car and homeowners coverage.

Every insurance policy is different, depending on the insurance provider, the customer and state law. Specialized RV insurance comes in many shapes and sizes, but here are some common coverage options:

• Vacation liability
• Full-timer
• Total loss replacement (TLR)
• Travel trailer
• Agreed value
• Personal contents
• Disappearing deductible
• Add-on and tow dolly
• Emergency travel expenses
• 24-hour emergency roadside assistance
• Pet injury

Let's look at a few of these individually, starting with vacation liability.

Vacation Liability

According to the 2021 RV Industry Association report, most RV owners only use their RV about 20 days a year. If this sounds like your family, you should opt for vacation liability, which is sometimes called campsite liability. It is similar to homeowners insurance.

When you are actually, finally on your big trip, vacation liability covers your RV while it is parked, whether at a campsite or off the public roads. For one thing, it provides general liability protection, so you're covered if a friend injures himself going down the front steps of your recreational vehicle or your son falls off the picnic table. Vacation insurance also provides damage coverage and personal effects coverage, which insures against the loss or damage of anything inside your RV.

When Is Vacation Liability Not Enough?

If you are living in your RV, renting an RV or financing your RV with a bank or other lender, vacation liability falls short of the policy protection you need. Also, some states require full-timer RV insurance, even if you only drive it 20 days a year. If any of these conditions apply to you, full-timer RV insurance is the way to go.

When Is an RV a Primary Residence?

About 165,000 Americans claim their RV as their full-time residence, according to the RV Industry Association. If you spend more than 150 nights in your RV during a 12-month period, your RV is considered to be a primary residence, and you need to purchase a full-timer RV insurance policy.

Of course, you will pay more if your RV is your permanent residence than if you live in both a house and an RV. If your RV is your home, you are exposed to more risk because you are on the road more. More liability translates to higher insurance costs.

Be Honest with Your Insurance Company

You must inform your insurance company of the intended use of your drivable RV. For example, if you don't tell your insurance company that you are using your RV as your permanent residence, your carrier can deny coverage claims in the event of an accident.

Full-Timer RV Insurance

Full-timer coverage provides the same homeowners-type accident coverage as vacation liability, but it also includes coverage of your storage-shed contents and loss assessment. These coverages typically include:

Personal liability, which pays for any injuries and property damage you cause while parked.

Medical payments, which covers medical expenses for those who are injured while near or in your RV.

Loss assessment, which pays for repairs to common areas or other parts of the property where your RV is parked.

If you store your recreational vehicle in a storage shed, that alone will lower your annual premium.

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Total Loss Replacement

Assuming you have collision and comprehensive, how much will a carrier reimburse you if an accident, fire, theft or some other disaster makes your RV a total loss?

There are three types of total loss valuation. A market-value evaluation is the standard, included coverage for any vehicle, but the options of agreed value and total loss replacement are unique to RV insurance and require a higher premium.

Market Value

Market value reflects the actual cash value of your RV at the time of the loss. If you paid $120,000 for your RV but the NADA or Kelly Blue Book valuations say its only worth $65,000, you'll be paid $65,000.

Agreed Value

This option will reimburse you for your RV's previously agreed-upon value, which you and your insurance company will determine at the time of your policy signing. This coverage is helpful for bus conversions and RVs that are custom-made, upgraded or used.

Total Loss Replacement

Also known as purchase-price guarantee coverage, this option will pay for a new RV that is the same or similar to the RV you lost. However, this coverage only lasts for the first five model years.

Travel-Trailer Insurance

Liability coverage is legally required for motorhomes, not for towables. However, your travel trailer may well be a valuable asset, so you should protect it the same way you protect your primary vehicle.

In most cases, your minimum auto insurance will cover any liabilities your travel trailer may cause. So, if your trailer gets unhitched on the highway and hits another car, your covered.

But your car insurance will not pay for any damages to your travel trailer. That's why many RVers opt to purchase a travel-trailer policy, which usually includes comprehensive coverage. If you want to add collision, that's up to you. Most financers will require you to carry both.

For example, travel-trailer coverage and other specialized RV insurance will pay out a nice sum for your RV's plumbing to be fixed or replaced in the event of an accident.

Do Most People Have Specialty RV Insurance for Their Trailers?

Most RVers do not have specialty RV insurance for their trailers, no matter how much insurance companies hate that fact. With that said, most RVers are disappointed when they do find themselves in an accident because they are underinsured, meaning that most of the damage to their property was not covered because they didn’t have a separate policy on their trailer.

When Is My Trailer Not Covered by My Car Insurance?

If you are still paying off the trailer and have a loan out on it, the trailer does not technically belong to you. Most lenders and lienholders require that you have full coverage or specialty RV coverage for any vehicle that is being financed. You should contact your lienholder to find out what they require of you, if you still owe on the RV.

What's My Address If I Live in My RV?

If your RV is your primary residence, you need to set up a "domicile address," which is a permanent, legal mailing address. You need a domicile address to renew your driver's license and register your RV, not to mention pay your taxes.

If your RV is your primary residence, vacation liability is not enough.

You must purchase your liability and specialized RV insurance in the same state as your domicile address. By law, you must live in the state of your domicile a good portion of the year.

Travel to Mexico or Canada

If your RV trip is taking you to Mexico or Canada, your current RV insurance policy may not be sufficient. Before heading out, you should check with your insurance carrier to make sure your current coverage will insure your RV against any damage or theft while your outside the U.S.

SmartFinancial Knows RVs

Looking for liability, full coverage or specialized RV insurance? Smart Financial can help.

SmartFinancial compares prices and policies for all types of insurance, including coverage for travel trailers, fifth-wheel campers and all other specialized RV insurance. Just enter your zip code or call 855-214-2291 to get a quote for free.