A new RV can be great family fun, but do you know if insurance is required or if insurance is optional for your RV? A lot of variables come into play when it comes to RVs and insurance. Laws can vary based on what type of RV you own making it very confusing. Let’s take a look at some examples of why you might need RV insurance and why you might not need it.
Times RV Insurance is Required
- Your RV is a motor home
- Your RV is financed
- Your RV is a rental
Motor homes are required to have liability insurance while being driven on the road according to state law. Full coverage can be optional based on whether you have the vehicle financed. Learn why financed vehicles are required to carry full coverage below. Just because full coverage is optional does not mean you should necessarily opt out. Determine the value of your RV verse the likelihood of a loss to decide if you can self insure your motor home’s physical damage risk.
Financed RVs are generally required to carry full coverage because lenders want reimbursement on their loan in case of a loss. If you do not carry full coverage, your lender could take out an insurance policy on the vehicle and send you the bill. Lender purchased insurance typically comes with much higher premiums and no liability.
Rental RVs are your responsibility while in your possession. It is important to make sure you have insurance coverage on the RV. Check with your auto insurance carrier to see if coverage extends to renting an RV. RV rental dealers usually either automatically included insurance or have it available for purchase.Times RV Insurance is Optional
- Your RV is only towable not drivable
- You own your RV outright with no financing
Towable RVs include fifth-wheels, pop-ups, and travel trailers. Liability is automatically extended from your car insurance policy when towing a camper. For instance, if your camper somehow comes unhitched from your truck and damages some property, your auto insurance liability will cover the costs. Because liability is covered under your car insurance, the state does not require insurance on towable RVs.
Loan free RV means you own the camper outright without any financing. RV insurance is only optional when the RV is loan free and is towable only. It is not optional for motor homes. If you purchase a new travel trailer for $10,000 cash, insurance is optional; however you would probably still want to carry full coverage on it. A total loss, such as fire or theft would be devastating to most people without insurance to protect the investment. Determine the value of your RV verse the likelihood of a loss to decide if you can self insure your travel trailer’s physical damage risk.
Whether RV insurance is optional or required, be aware of the pitfalls of going without RV insurance. Lots of RV owners leave their RVs parked out in the open yard, leaving them susceptible to storm damage and possible theft. If your RV holds a great deal of value still, make sure to purchase full coverage RV insurance to protect against a potential loss.