Specialty RV Coverages: Total Loss Replacement, Purchase Price Guarantee, and Agreed Value

According to a USA Today article on March 20, 2008, new sales of RV’s hit 354,000 in 2007. Many of those RV’s are insured with non-specialized coverage. At Explorer Insurance Agency, we realize how significant an investment a RV can be. This article discusses the three coverage options that are the foundation of the specialized RV policy. Each option provides a form of depreciation protection, but provides it in a different manner.

Total Loss Replacement is available to original owners of newer RV’s whose model year is within four years of the current year. This option provides depreciation protection for the first ten model years. If a total loss occurs during the first five model years, the insurance company will replace the RV with its newest model or whatever is most comparable. If a total loss occurs during the second five model years, the insurance company will pay the insured the purchase price that the insured paid for the RV towards the replacement.

Purchase Price Guarantee is available to owners of a used RV purchased within the most recent twelve months and where the model year is no more that ten years old. This option also provides depreciation protection for the first ten model years. If a total loss occurs at any time during the first ten model years, the insurance company will pay the insured the purchase price that the insured paid for the RV towards the replacement.

Agreed Value coverage is available to all owners of bus conversion style RV’s. This option is available only for bus conversions and it provides depreciation protection for three years. The insurance company asks that an appraisal is submitted to provide proof of value and will honor that value in the event of a total loss for three years. The insured has the option to submit a new appraisal every three years to keep this option as long as the insured wants it.

The purchase of an RV is a significant investment for the insured. The idea behind these coverage options is to protect that investment during the years where an unforeseen accident or loss can turn the investment into an unwelcome financial setback.