Does an RV or Boat Need Extra Insurance?

Your auto insurance may not cover liabilities unique to specialty vehicles. Find out how to avoid getting caught in a coverage gap.

Couple sitting on their sailboat enjoying the sunshine

by NEA Member Benefits


Thinking about purchasing an RV? Or are you wondering if your small boat is covered if something happens while you’re out on the water this summer? Specialty vehicles such as RVs and motorcycles, like anything licensed for the road, require liability insurance in case of damage or injury done to others in an accident. It’s just as important to consider coverage for your boat or personal watercraft, as well.

“You could carry these on your auto insurance policy,” says Chuck Muenzen, vice president at California Casualty, “but then you miss some of the special coverage designed for these vehicles.”

Different vehicles require different kinds of coverage. One option: NEA members are eligible to apply for several types of specialty insurance, provided by California Casualty, that specifically cover RVs, motorcycles, boats and other vehicles, with benefits designed to fit educators’ needs.

If you’re considering purchasing or already own one of these specialty vehicles, here’s why having a separate policy is so important.

Recreational vehicle insurance

RVs, in particular, offer an insurance challenge. They can be quite expensive—a Class A motor home can cost well over $100,000 new—and because of their size can cause quite a bit of damage in an accident. Also, since they can double as a home on a temporary or even permanent basis, they may need protection beyond that of a vehicle used exclusively for transportation.

An NEA Recreational Vehicle Insurance policy through California Casualty, for instance, covers motor homes up to $500,000 in value and travel trailers up to $300,000 in value.

“We offer total loss replacement as part of the policy,” says Muenzen. This is important with an RV because they depreciate extremely rapidly. They can lose tens of thousands of dollars in value virtually from the moment you drive them off the lot.

For this reason, practically everyone who finances the purchase of an RV will soon be underwater --that is, the amount of the loan is higher than the value of the vehicle--no matter what kind of down payment was made. Worst-case scenario: In a bad accident, the RV is totaled and insurance won’t pay enough to cover the balance on the loan.

Opting for total replacement coverage means that the loss would be settled for the cost of what you would pay for the same or comparable RV new, Muenzen says, but he notes that the coverage is only available for RVs one year old or newer.

RV aficionados recommend you get gap coverage, which is often available from a lender, on the loan—providing for the difference between the book value of the vehicle and the remaining amount on the loan.

Other special features of the NEA Recreational Vehicle Insurance policy are an emergency vacation expense if you have to live outside the RV during emergency repairs while away from home, replacement cost of personal effects (obviously a much bigger liability in an RV than in a car), roadside assistance, disappearing deductibles and windshield coverage. One unique feature is free pet coverage that helps pay vet bills for injuries caused by a covered loss, a benefit not all companies offer.

For those who envisage making an RV their primary residence, there is a full timer’s package that offers liability coverage similar to that of a homeowner when the RV is parked. This can cover emergency treatment and medical expenses if someone is injured in or near the RV.

An extra word of caution: RV makers have had a tough time of it in recent years, with many of them going bankrupt. Many owners find that an extended warranty, provided by a third party other than the manufacturer, can be important as repairs can be expensive and even more expensive if the manufacturer has gone out of business.

Learn more or get a quote for NEA Recreational Vehicle Insurance.

Motorcycle insurance

Motorcycles are relatively straightforward. Muenzen says many owners simply carry a motorcycle on their auto policy. However, the personal effects coverage available on a special policy might be advisable if you have a lot of gear, like an expensive helmet equipped with a microphone that some riders like to use.

An extra word of caution: Accidents are more common on motorcycles and the risk of injury is higher, so it is very important to maintain a good health insurance policy.

Learn more or get a quote for NEA Motorcycle Insurance.
Boat and personal watercraft insurance

Boats are a different story, because they are usually not required to carry insurance. Nonetheless, owners would be well-advised to take out special insurance, says Muenzen.

“For starters, it is important because of the liability exposure,” he says.

The chance that the boat could injure a swimmer or otherwise cause damage or injury is reason enough to carry liability insurance, he says. More expensive boats should be insured for damage and again for loss of personal effects. Policies for personal watercraft (Jet Ski is one brand name for them) are also available through California Casualty.

Insurance for a houseboat used as a permanent residence is not available through California Casualty, but there is a policy available for a houseboat used as a vacation residence, similar to the full timer’s coverage on an RV.

Learn more or get a quote for NEA Boat & Personal Watercraft Insurance.

Other Types of Specialty Insurance

California Casualty also offers specialized policies for snowmobiles, addressing the particular risks of this vehicle. Coverage includes bodily injury and property damage liability, comprehensive and collision coverage, uninsured/underinsured motorist coverage, and medical payments—which in some states may kick in only after other medical insurance is exhausted.

Learn more about the different types of vehicle coverage available to NEA members.

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