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.
No-Fault
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 Coverage protects
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.
