Dealing With RV and Truck Insurance

When we first started full-timing, we were very concerned about insurance because we had heard that you really needed to have a special policy as full timers that would cover you in case you had an incident.  Knowing this we chose Miller’s Insurance, who specialized in RV coverage, and ultimately got a policy through Allied who is owned by Nationwide Insurance.  I was pretty relived that the company was one that I knew and not an off brand insurance carrier. Thankfully since we have been on the road, we have had two claims and they were both paid immediately.  The first was a major one, when Lee put regular gas in our diesel tank and our engine was destroyed.  That was by far the largest claim we have ever had in our lives and the insurance company paid $9K for a new engine.  Then last year we had a windshield chip from Alaska and had our windshield replaced.  Since we are Florida residents, windshield replacement have no deductible and that saved us around $1350.

Needless to say I have been extremely pleased with our carrier, but as our premiums keep creeping up, I was starting to get concerned.  I am a loyal customer though, and since the price was going up annually in pretty small increments I thought I could live with it.  But this month our premiums went up again and this time it was $70 a month, a whopping 43%.  OK, that is a lot of money, and although we had offsetting savings in other categories this year, we obviously wanted to know why we were getting a 43% increase.  Unfortunately that is a tough question to get an answer to.  Part of it was the claims, part of it was the hurricanes in Florida, and part of it was the higher cost of vehicle repairs.  Lee was pretty frustrated because he wanted a breakdown of how much of the increase was due to each factor, but if you have dealt with insurance companies you won’t be surprised that that didn’t happen.

So we did what any rational person would do and started getting quotes.  Yes, I am loyal, but I am also not willing to get screwed, so we wanted to see what else was out there.  That’s when the conversation became interesting. Turns out that we could get a better price on the truck (about $350 a year less), but if we split the RV and truck coverage the RV costs would go up $150 a year.  OK, we thought, we will move both of our coverages to the new company, but then we learned that if we did that we could no longer get total loss replacement coverage for the RV.  We bought the RV new in 2014 and our coverage has been for replacement value (around $70K).  This wouldn’t cover the Mor-Ryde, solar, or any of the other upgrades we have done, but would cover the $48K we have left on our loan and then some.  Unfortunately we learned that at this point the only new RV policy we could get would only cover present day actual cash value. Since that valuation is only $40K (and we might not even get that) not only would be out our RV, but also still owe money on our loan.

I guess I shouldn’t be surprised by all of this really, since I sort of understand why they wouldn’t want to insure us for more than the RV is worth, but I am really glad Lee delved into the fine print and found this out.  At this point we had a couple of choices.  We could leave well enough alone and just pay the extra premiums, at least for this year, or we can split the coverage.  Since we are still to the good with how much we have paid in premiums versus how much we have received in claims I was leaning towards just leaving it alone.  Lee absolutely did not want to lose the replacement value coverage and had the same concerns with a new policy on the truck.  We have replacement value on our truck as well and although we have no loan with that so actual value wouldn’t be a loss, it would probably be difficult to find a replacement truck with the money they paid out.

Which takes me to why I am taking the time to write all this out.  We get the question quite a bit of what we would do if we had a catastrophic incident (fire, collision, etc) and although we have thought through that scenario it is not something we dwell on.  Obviously we are not completely rolling the dice here, or we would have the cheapest coverage available, and we intentionally structured our insurance plans to give us what we considered reasonable coverage.  As a side note we also have $30K in personal item coverage on the RV, which should more than cover what we have in the rig.  In any event we have this coverage and now three years later faced with changing our strategy we had decided to continue with it as is, knowing full well that at some point in the future the monthly premium hikes may necessitate a change.

For right now, if we had a catastrophic occurrence we would take the money and try and pay cash for a new truck and RV. I will say this time around I would be completely open to buying something used, and since this particular model isn’t that common, if we got lucky I would try and find something very similar.  It is very likely that we wouldn’t have enough money to completely cover the costs and in that case we would have two choices.  We could take out another loan, which I am guessing would mean we would have to stop for a while and get “regular jobs” to qualify, or I could take a loan from my 401K and we could pay ourselves back with interest. Which route we took would depend on how much money we were short, but either way it would definitely be something we could survive.

Lots of people have to leave the road for a little while, and just because you take a break it doesn’t mean you can’t jump right back in once you have more money in the bank. I think there is a tendency to believe that this journey has to have a strict beginning and end, but that simply isn’t the case.  Especially at our age, since we are only 49 and 51, (just for the record, I’m the younger one. – Lee) we have lots of time ahead of us to make adjustments.  I mention this because the all or nothing approach was firmly in my mind in the beginning of all this, but now I know better. Many people we know have had life events that have temporarily sent them from the road.  Illness, deaths, grandchildren, finances all can play a part and taking a break is really that not big of a deal in the grand scheme of things.  Yes, getting started is a huge life change and for most people requires a steadfast commitment, but once you have done this for awhile and seen how many different ways there are to live the lifestyle, you can ease up on that all or nothing approach.

Do we think a catastrophic event will happen?  We don’t, but we are prepared for it in our own way.  Your preparations will probably be very different, and that is the way it should be.  I am just sharing our thought process, in case you haven’t talked these scenarios through yet, so you can see how we are thinking about it. Plus it gave me something other than gate guarding to write about!

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