Recreational Vehicles – Detailed Information

Watercraft

You are not legally required to insure your boat. However, if you are financing the purchase of your boat, the lender will most often require insurance coverage listing them as a loss payee to cover their interest in your boat. In addition, most marinas now insist that boaters maintain insurance on their boats when mooring them at the marina.

Boat owners insurance can insure you against most risks of owning and operating your boat, its motor and its trailer. Losses may include sinking, fire, storms, capsizing, being stranded, collision, etc. Boats can be insured as an extension on an existing homeowner policy, or on a standalone marina policy, depending on the vessel to be insured.

There are two coverages important to insuring your boat: Hull and Equipment and Liability. Insuring your vessel and equipment to market value will ensure you will recover what the boat is worth in the event of a loss. Liability coverage protects you for at fault damage to property or bodily injury claims.

Often the value to be paid in the event of a claim would be either Actual Cash Value Basis or Agreed Value. When a claim is settled on an actual cash basis, the insurance company will determine the value of the boat, subject to depreciation. When agreed value is the method of settlement, the insurance company will pay you the agreed upon value usually determined by appraisal, should you suffer a total loss to the boat.

Motorhome / RV / Trailer Insurance

Whether you’re 50-something and dreaming about a nomadic retirement or have a young family and want a recreational vehicle to cut holiday expenses, buying a RV presents a number of options to choose from. Your insurance needs for your RV will vary widely, depending on what you buy and what you intend to use it for.

Do you want a motorhome to drive to multiple vacation destinations, with your car-in-tow? Are you looking at towing a “fifth wheel” that has many or all of the features of a motorhome? Do you want a “park model” that will be set up as a vacation home at a semi-permanent location? Or are you considering a tent trailer or camper-topped pickup to make setting up a campsite fast and easy?

If you’re considering taking the plunge this spring or summer, it’s important to research your insurance options and costs before making a down payment on a RV, since the cost and limits of insurance may influence what you decide to buy. Your first call should be to your broker to find out the types of RV insurance they carry and the cost.

Types of RVs and RV Insurance

Deciding what insurance you need depends on which type of RV you’re considering. Most insurers divide policies into coverage for three basic types of RVs:

  1. Class A, B and C motorhomes: the type that you drive to each location.
  2. Trailers: these include travel trailers and “fifth wheels” (the latter of which can contain many or all of the comforts of a motorhome but are hitched to a tow vehicle), tent trailers, and truck campers.
  3. Park models: these are mobile, but just barely: they’re usually towed to a motor park or other location and left there for use as a vacation home, typically for many seasons.

Liability Coverage

Any RV with its own engine will require the same liability and accident benefit protection that’s required for an automobile in your province of residence. Given the size and weight of many motorhomes and the additional damage that they can cause in a crash, you may want to consider increasing your liability protection for damage to other people or property – especially if you plan taking your RV south of the border.

What happens if you are towing a fifth-wheel vacation trailer or tent trailer and it becomes detached and rolls out of control on the highway? The auto insurance policy for your tow vehicle will cover liability if someone gets hurt or property is damaged in a crash.

Home insurance policies include liability in the event someone slips and falls or is otherwise injured on your property. Since your RV is like a second home, check whether your current policy covers personal liability for that type of injury when your RV is parked at a campground or motorhome park. If it doesn’t, you may want to add personal liability to cover your RV. You still may want to increase your personal liability coverage – particularly if you’re using your RV as a cottage or vacation home or planning on parking it at U.S. locations.

Property Coverage

Whether the contents of your motorhome or trailer qualify for coverage depends on whether you purchase a home insurance policy that includes specific coverage for them. The same is true for theft, fire insurance and property damage: if your current home policy doesn’t cover your motorhome or trailer and/or its contents, you may want to consider buying additional insurance, especially if your personal property would be a hardship to replace out-of-pocket. This type of insurance typically does not cover when a RV being used as a permanent vacation residence. For that kind of use, you may need to purchase separate home insurance.

If your current home and auto insurer doesn’t offer the kind of coverage you want or need for your RV, you may have to seek out a RV standalone policy.

RVing South of the Border

Some Canadian insurers will not insure a RV left stored or parked in the United States for a certain number of months or more. Check the time limit with your insurer if you plan on leaving your RV south of the border for any length of time.

Elements of RV Policies

These are the basic elements of RV policies you may want to consider, depending on how and where you plan to use your RV, its model, make and value.

All perils: You may want to add risk coverage that adds fire, theft, vandalism, wind, hail, lightning, tornado and water damage coverage to your collision and accident benefits. All perils coverage will not include things such as rusting, wear and tear, buckling, cracking or other damage caused by freezing, rotting, mould, animals or insects. Many insurers will want deductibles as high as $1,000. For expensive RVs , theymay ask for a deductible that is a percentage of the RV’s value. ( E.G., a high-end motorhome valued at $100,000 that your insurer insists include a 5 per cent deductible based on its value, could cost $5,000. Read the fine print on your policy carefully.

Replacement cost coverage: Replacement cost coverage is usually available on a motorhome for five years if you are its first owner and purchased insurance for the total price of purchase, including taxes. This could be important if you make a claim for damage that occurred in a jurisdiction that has “no fault” insurance, in which you can’t claim the replacement cost from the person who caused the crash and your own insurer pays your costs. If your RV is three-or-four-years-old and you don’t have replacement coverage, your insurer would pay what your RV was worth at the time of your loss rather than replacement cost. A three-or-four-year-old RV can depreciate by as much as 30 per cent.

Emergency expenses: This would cover the cost of a rental vehicle, lodging, food, or even a flight home. It doesn’t add much to your premium and you’ll be glad you have it if you find yourself stranded in somewhere in the mountains of New Mexico.

Snowmobiles & ATVs

Snowmobiles and ATVs are almost always an add-on to an existing auto policy and require the same minimum coverages.

Please refer to the Mandatory and Optional Coverages under Automobile Insurance for details which also apply to Snowmobiles and ATVs.