For people who have an RV, life does not get any better than driving down the open road to the next destination. Literally a home on four wheels, an RV can let folks see the country while still enjoying the comforts of home. However, as with any motor vehicle, having the proper insurance coverage is a necessity. When it comes to recreational vehicles, there is no better protection against financial loss than Gap insurance. If you own a motor home or are planning to purchase one soon, here is an explanation of Gap insurance as well as some of its most important benefits.
What is Gap Insurance?
Just as its name implies, GAP (Guaranteed Asset Protection) insurance fills a gap when it comes to the current market value of your motor home. By covering the gap between the motor home loan balance and the actual cash value of the recreational vehicle, plus insurance deductible, it protects the RV’s owner in the event an accident happens and the RV is considered a total loss.
Why Should I Have Gap Insurance?
If an RV is considered a total loss in the event of an accident, many people make the mistake of thinking their standard automotive insurance will take care of everything. Unfortunately, that’s not the case. If an accident happens, a person’s collision coverage will only pay the current market value of the RV, and will not cover any amount still owed on the loan. Thus, those who own an RV may find themselves still owing several thousand dollars on a loan for a vehicle they can no longer use. However, if they have Gap insurance, these problems never happen. Not only will the entire loan be paid off with the coverage, but it will be paid off at its full current market value as well. However, it will not cover any interest charged on the loan by the lender, nor will it cover any missed loan payments or late fees from payments.
Is RV gap insurance worth it?
Well, it’s never a bad idea to have it, especially if you are financing your RV. It’s understandable that the idea of it can be daunting due to the extra cost, but at the end of the day, it will be money well spent for peace of mind for a number of years. And ultimately when you find yourself needing to use it, it can save you a lot of money.
This protection is a sound investment if you have purchased your vehicle without taking out comprehensive coverage with the manufacturer. This is one of the types of coverage designed to protect you in the event of an unexpected disaster that can put you in a bad financial situation. RV gap coverage can help you pay off your loan in full in the event that it gets totaled—even if your insurance payout eventually ends up falling short.
In comparison to comprehensive and collision coverages (such as agreed value or extended warranty), RV gap insurance is more of a misunderstood type of coverage; but is one that can offer a big amount of protection for a small fee. It’s not hard to see why so many owners prefer to purchase gap insurance if you look at the total cost of a regular motorhome or RV plus the interest that may be tacked onto financing it.
How Do I Get Gap Insurance?
Surprising to many people, most insurance companies do not mention gap insurance to customers who may be shopping for a new motor home—even if the insurance companies themselves offer it. If you decide you want or need this coverage for your RV, it’s best to ask your insurance agent about it before you sign on the dotted line. While an insurance agent does not necessarily have to offer gap insurance to customers, they are required to sell it to you if you make the request.
In addition to these numerous tips, there are other options motor home owners should consider. For example, gap insurance premiums can be combined with a loan to give an RV owner only one monthly payment. Along with this, some insurance agencies offer extended warranties that provide additional avenues of protection and coverage for purchases related to the motor home. By taking all of these factors into consideration, RV owners can be assured they will have adequate coverage in the event of an accident. In doing so, it will be much easier to get back on the road again.
Contact us today with any questions regarding gap coverage for your RV.