- Class A RV
- Liability Insurance
- Injury Liability
- Financial Lien-holder
- Total Loss
Many people dream of retiring and traveling in an RV, and a person should be aware of these five key terms to know when shopping for RV and motorhome insurance. The terminology of both RVs, or recreational vehicles, and insurance can be tricky and complicated. Awareness of these top terms related to RVs and insurance could help a person make informed decisions when shopping for an insurance policy.
Class A RV
A Class A RV is a governmental designation for a vehicle. These vehicles weigh 13,000 to 30,000 pounds. They measure at least 26 feet long. They are akin to a house on wheels. This is the largest type of RV, and they are typically the most expensive. They can easily cost in excess of $100,000.
Liability insurance includes injury liability and property damage. A person who is at-fault for an accident while driving their RV could be sued if the other party’s property is damaged and the at-fault party lacks sufficient insurance coverage. The property damage insurance typically covers repairs or replacement value of the damaged vehicle as well as access to a rental car while the damaged vehicle is at the mechanic’s shop.
Injury liability is a type of insurance that provides coverage for an injured person’s medical expenses, lost wages, pain and suffering. For example, if a person is found to be at-fault for an accident in which their RV hit a small car and caused an occupant of the car to be injured, the injury liability insurance would pay for the person’s medical expenses, lost wages and pain. If a person does not have enough injury liability coverage, the injured party could file a lawsuit against them.
A financial lien-holder refers to the holder of a lien on the RV. This happens when a person does not pay for the entire cost of the RV outright. For example, a person buys a Class A RV and puts a 20 percent cash down payment on it. They make payments until the RV is paid off, just like they would on a car loan or a home mortgage. The lien-holder of the RV typically requires that the purchaser carry comprehensive and collision insurance on the vehicle. This is because the RV is the collateral of the loan. If the RV were destroyed, there would be no collateral for the lien-holder to collect if the customer stopped making their loan payments.
Another important term that a person should know when they shop for RV and motorhome insurance is “total loss.” A total loss is when the vehicle is destroyed or not able to be driven, explains The Balance. Some causes of a total loss include fire, collision and theft. Total loss is typically covered under a comprehensive coverage policy. Comprehensive insurance covers all types of damage that is not related to a collision. This coverage also includes vandalism, flood and hail damage. A person who lives in their RV or who spends many months out of the year traveling in their RV should strongly consider comprehensive insurance for a total loss of the vehicle.
Related Resource: 10 Best Cheap RV Insurance Companies
Keep in mind that an insurance agent should take the time to answer any questions that a purchaser has about a policy. This is also true for RV salespeople, and they should be able to provide a customer with information about insurance for these vehicles. Understanding these five key terms to know when shopping for RV and motorhome insurance could help a person save money, get the coverage they need and protect themselves from financial liability in the event of an accident.