It’s the worst-case scenario, an accident causes so much damage, it is not practical to repair your recreational vehicle. But Total Loss Replacement coverage provides full protection for your RV.
How Your RV is Rated “Totaled”
In the case of an accident, your insurance company will inspect your damaged RV. Generally, the insurer rates an RV a “total loss” if the cost of repair is greater than the total value of the vehicle.
Suffering a total loss is difficult. No doubt you’ve made a significant financial investment in your RV. Also, you probably invested a lot of time and energy in finding the perfect toy for your American adventures.
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Typical Insurance Won’t Cover Replacement Costs
Depreciation can really hurt you if your RV is totaled. If you don’t have TLR, your insurance company will typically pay you something like the Blue Book value of your vehicle at the time of the loss. But in just one year, depreciation can take a huge toll on the original value of your RV. So, if your insurer pays you only what your vehicle is worth at the time of the accident, that amount is likely to be far less than you paid or owe. And that may leave you with too little cash to replace your beloved RV.
Total Loss Replacement Coverage Protects You From Depreciation
If you have Total Loss Replacement coverage, your insurance company pays full replacement value for a like make and model (minus your deductible). So depreciation does not affect you. In fact, the amount your insurance company pays could be more than you paid for your RV because they cover the cost of an RV of the same model year or later
Let’s say you spend $130,000 on a Winnebago Cambria. Then, one year later you’re on a hike while your RV is parked at Sunny Boulders RV Park and Campgrounds and a faulty refrigerator causes a fire that destroys your beloved RV before you can return to your site. (Insurance companies include fires among their top claims.) Suddenly, a giant boulder breaks free from the rocky hillside and smashes into the roof of your RV. It causes extensive damage inside and out. Depreciation could put the value of the Cambria before the accident at $100,000 or less. That’s not enough to replace it. But with Total Loss Replacement, your insurance company pays you the cost of a new Cambria with the model year of 2019 or later, minus your deductible.
Most insurers limit full replacement to losses that occur within the first five model years. What happens after the first five model years depends on your insurer.
Total Loss Replacement Offers the Highest Level of Protection for Your RV
Total Loss Replacement coverage offers full protection for your RV. For that reason, it is the Cadillac of loss coverages compared to the other options.
Actual Cash Value protection covers you up to the “fair market value” of your RV at the time of the accident. This takes depreciation into account. ACV offers the least amount of coverage, with the lowest premiums. Agreed Value is special coverage that allows you and the insurance company to agree on a set price. If you have a total loss, the insurance company pays out that agreed-upon price. Compared to Actual Cash Value, Agreed Value offers more protection with a higher premium. Total Loss Replacement offers the most protection of all three, though this coverage has the highest cost.
Is Total Loss Replacement Coverage Right for You?
Total Loss Replacement is the ideal coverage if you crave peace of mind. Enjoy your American Adventures without worry, and rest easy in the knowledge that if the worst happens, your carefully selected and treasured RV will be replaced.
Our experts can’t wait to help you compare costs and determine what policy is right for you. Call 888-930-3680. Or submit a quote request. We’ll deliver a quote to your inbox in minutes.
