How RV and Auto Insurance Work: A Guide

It’s safe to say Americans love and even expect a certain level of mobility in their lifestyle with over 200 million Americans having access to a driver's license, according to the Bureau of Transportation Statistics. Similarly popular, the recreational vehicle (RV) has been ubiquitous in the United States for more than 110 years, and even COVID-19 doesn’t seem to be slowing down this robust industry.

“Our shipment numbers show an 11 percent increase in shipments in June 2020 as compared to June 2019. Additionally, the June shipments were up 45 percent compared to the previous month,” says Monica Geraci, an RV industry association senior marketing manager.

With so many people and vehicles on the road, accidents are unfortunately inevitable. The National Highway Traffic Safety Administration reports that, while roadway deaths are slowly declining year over year, 38,680 people lost their lives in vehicle accidents in the most recent data available.

Considering the volume of traffic and traffic accidents in the nation, it’s no wonder auto insurance policies are working to see a steady — and sometimes dramatic — increase in cost. Here, we’ll look at how auto and RV insurance work, since RV policies build on the same essential features and are often closely tied with an owner’s existing auto coverage.

How Does Auto Insurance Work?

Potential hazards associated with driving involve both damage to your/another’s property (vehicles and surrounding structures) and physical injury for you, another driver, and both of your respective passengers, if any.

As such, auto insurance policies need to cover a wide variety of scenarios in which the insured or another driver causes harm involving the insured vehicle. An insurance policy is a contract between you and an insurance company that’s designed to prevent financial losses for you in any of those scenarios.

Auto coverage hinges on medical, property, and liability components:

Medical coverage accounts for any injuries you or others sustain in an accident, including treatment costs, physical therapy, etc. Some policies even include lost wages and funeral expenses.
Property coverage deals with vehicles themselves including mechanical and cosmetic damage, and can account for losses like theft or natural disasters. It also includes physical objects damaged in a crash like fencing, road signs or barriers, utility poles, traffic lights, etc.
Liability coverage deals with the cause of the accident and who will be considered responsible for compensating whom. For an individual driver, liability coverage is for accidents or injuries caused with your vehicle.

Almost all states legally require licensed drivers to carry liability insurance for bodily injury and property damage at minimum. If you’re financing the insured vehicle, it’s likely your lender will require more than the state minimum (see gap insurance below).

Additional policy offerings you can expect from most auto insurance providers include:

Uninsured motorist coverage: This coverage is what it sounds like — you’re involved in a hit-and-run accident or a collision in which the other driver doesn’t have insurance (and thus there’s no one with whom you can file a claim for injury/damage). Sometimes a policy covers both “uninsured” and “underinsured” drivers; sometimes they’re separate policies. Underinsured covers the unfortunate scenario in which you’re involved in an accident caused by someone else, and their liability policy doesn’t cover the full cost of medical expenses or property repair to which you’re entitled.
Medical or personal injury protection (PIP): This policy focuses specifically on injuries and medical expenses associated with an auto accident. This includes the lost wages and rehabilitation or therapy reimbursement mentioned above, and often covers the insured driver and all passengers in a vehicle at the time of the accident (whether they’re named on the policy or not). Finally, this is a “no fault” policy, meaning that even if you are responsible for the injury accident, medical expenses are still covered up to the policy limit.
Collision: This coverage focuses on any situation in which your vehicle collides with another vehicle or a stationary object like a utility pole, guardrail, etc. Usually in this scenario you (or the person driving your car) is at fault, but this coverage may also account for damage to your car from freak accidents like striking a large animal or even running over a big pothole.
Glass: Most policies “bake in” glass coverage since windshield damage is common, and it may or may not require a deductible, regardless of fault.
Comprehensive: A comprehensive policy covers essentially any freak incident that may damage or destroy your vehicle that is not a result of a traffic accident. This includes natural disasters like fire, flood, hail, falling trees, and theft or vandalism. Essentially, it’s any scenario not involving another car or driver, in which your car was damaged without being driven.
Gap insurance: All vehicles (including RVs) depreciate quickly, meaning you purchase a new/used vehicle, drive it off the lot, and it is now worth less on the market (in some cases a lot less). Auto insurance policies cover only the market value of your vehicle, which is almost certainly less than you paid for it, so enter gap insurance. For anyone financing a car, there will be a period of time where an incident requiring full replacement of the vehicle will fall short of what they owe on it. Gap insurance covers that difference between the car’s market value (covered by the auto policy) and loan balance, and so is often required by lenders.

Who is Covered With Auto Insurance?

A standard auto policy for a driver and vehicle will cover:

The driver and any of their family members, driving the insured vehicle
You driving someone else’s vehicle with their permission
A family member named on your policy, driving someone else’s vehicle with their permission
Someone not on your policy, driving your insured vehicle with your permission.

If it sounds complicated, it is — a more in-depth look at the specifics can be found in this Claims Journal article. Considering the various scenarios in which family members share, borrow, or exchange vehicles day-to-day, and the possibility of anything from a fender bender to a serious collision occurring somewhere in those scenarios, the complication begins to make sense.

It’s important to note that if you use your insured vehicle for commercial purposes (i.e., delivering pizzas, ride-sharing, etc.) it will not be covered should an accident occur while you’re working. Many major insurance providers offer add-on policies if you’ll be using your personal vehicle commercially, so if you’re spending even a few hours a week earning money this way, protecting that income with insurance may be a good idea.

Is Insurance Required to Drive?

Yes, active auto insurance or ability to pay for liability are legally required in 48 of the 50 states, with specifics as to the minimum requirement varying state by state (see your state’s requirements by visiting their DMV site). Almost all require a minimum of bodily injury and property damage liability. Auto policies are usually valid in either six-month or one-year increments, so drivers need to ensure documentation of an active policy is on their person when driving.

How to Compare Auto Insurance Quotes

When shopping for any type of insurance — including home, RV, or life insurance — you submit certain basic information about yourself, the asset you’re trying to insure (in this case, your car and/or RV), and the extent of coverage you need to various providers. They in turn give you an estimate of what they’ll charge, called a quote.

The reason for this process is that insurance policies are not and cannot be one-size-fits-all; everyone has different circumstances that, from a provider’s point of view, make them more or less likely to file claims.

Key elements affecting your quote and ultimately what you pay for coverage are:

Where you live
Your driving record (a history of lots of traffic violations or accidents will work against you)
Your age, gender, and homeowner status
Your education level
Your credit score
Your vehicle

Shopping around for multiple quotes from multiple providers is one of the best strategies for getting a great deal on your insurance.

In fact, it’s a good idea to shop around even when you’re not insuring a new vehicle or driver, just to see if you could save money on your existing premiums.

See How Much You Could Save on Auto Insurance With Great Rates Get a Free Quote

How Does RV Insurance Work?

Where auto insurance revolves around a driver, vehicle, who caused the incident and physical/property damage, RV insurance tailors these same ideas to vehicles that will spend as much (or more) time as a stationary residence as it will a vehicle in transit.

It starts with the class of vehicle and how you plan to use it. The term RV can describe any of the following five vehicles, as defined by Autotrader:

Class A: These are motorhomes built on the same chassis as a charter bus or large truck — where bath and kitchen appliances as well as sleeping for up to 10 adults are self-contained in one vehicle. These are the most luxurious, expensive type of recreational vehicle and include expanding compartments for more square footage and even “toy hauler” garage spaces that accommodate small vehicles (motorcycle or ATV) or storage for items like outdoor furniture.

Class B: The Class B RV is often referred to as a “camper van” — it is on a smaller chassis (think the size of a delivery van), and includes amenities like a sink, shower, and toilet in addition to sleeping for two adults. It is self-contained living quarters inside a vehicle for a lower price point than a Class A, and is maneuverable enough to fit into most normal-sized parking spaces.

Class C: The Class C is a hybrid between classes A and B — manufacturers start with a chassis cab (a large pickup or van cab with a blank flatbed trailer) and a third-party outfitter designs and attaches the living quarters. These are a compromise of more space than a Class B without committing to the price (and required driving skills) of a Class A.

Tow-behind or travel trailer: This is the most versatile RV category. Travel trailers can be towed with a standard trailer hitch, come in all shapes and sizes, and make an effective mobile home as they can be parked while you drive your vehicle anywhere you need to go.

Fifth-wheel trailer: A fifth-wheel trailer is similar to a tow-behind, in that it requires towing, but these attach only to pickup trucks with special mounted hitches in the truck bed. They can be bigger and more maneuverable than other camping trailers since pickups can tow heavier weights from a bed hitch and steer around tighter curves.

What About a Camper?

The term camper is sometimes thrown around interchangeably with RV, so the difference between the two gets confusing. In general, campers are any kind of tow-behind trailer or truck bed addition that is not designed to serve as long-term living space.

Pop-up campers can be light enough to tow with a smaller vehicle, have expandable sections (usually made of canvas), and collapse into a low-profile, flat trailer for travel. Truck campers are units that slide onto standard truck beds and ride on it with minimal modification.

Both pop-ups and truck campers can include amenities like bathrooms and even kitchenettes, but are not made of sturdy enough materials to serve as full-time living quarters.

Where Does My Auto Policy Factor In?

The primary way an auto policy is tied to RV insurance is that you can usually bundle an RV or camper into your existing auto policy to save money — especially if you have a good driving record and/or a strong insurance provider.

Experts strongly encourage those looking to insure an RV to start with investigating a multi-policy discount with their existing provider.

For anyone insuring an RV for the first time, ski enthusiast Christine Wang says: “Start with your regular insurance company, i.e., the company through which you have your regular auto policy, and see what they can do for you. You will still want to shop around for the best deal that meets your situation, but oftentimes by pairing your regular auto with RV insurance, you can get a good deal.”

Founder of MyRVBroker.com and 20-year RV veteran James Upham cautions against tackling RV insurance from the homeowner angle.

“Although many new buyers consider purchasing RV insurance with their homeowner’s insurance, this may not always be the best course of action, nor does it always provide them with the amount of coverage that they really need to have,” Upham says. “RVs depreciate much faster than automobiles.”

“Be sure to get an insurance quote that includes this [aspect] to compare,” Upham adds. “Finally, see how much (if any) manufacturing warranty is left on the RV. Be sure to know what is and what is not covered under warranty and when it expires.”

Depending on the warranty, some aspects of an RV (especially those that include things like kitchen appliances) may not need as much coverage as you might expect, and provide an opportunity for a cheaper policy.

See How Much You Could Save on RV Insurance With Great Rates Get a Free Quote

How Much Does RV Insurance Cost?

Just like auto insurance, RV insurance costs and minimums vary by state, so the most accurate answer to “how much will it cost” will come from gathering quotes built on your unique information.

In some states, full-time RV insurance is on par with actual homeowner’s insurance. So, for those considering a full-time RV as an alternative housing option (like a tiny home), insurance affordability and flexibility is a major advantage.

Because RV insurance relies so heavily on how you will use it, a full-time RV resident can build a very specific plan around their needs and save money in ways a homeowner’s policy can’t. For instance, RV owners may do some research and discover they can store and insure valuable items more cheaply than including them in their policy.

In some cases, you may find you actually need more insurance than homeowner-style policies.

“If you use the RV in your profession, costly tools of your trade may not be covered for theft. If your RV is also a home office or is used in a commercial enterprise, such as a food truck or a mobile pet grooming salon, you may need special coverage for equipment and liability. Bottom line: It’s important to use an insurer that specializes in RV coverages,” says Janet Groene, author of Living Aboard Your RV.