RV renovations are all the rage. Just peruse hashtags on Instagram like #rvrenovation, #rvinspiration, and #cozyonwheels and you’ll see every kind of renovated RV imaginable.
Which is why we chose to go the route of RV renovation for our full-time tiny abode. After all, we could get an RV on the cheap and build it to our specifications! See how it all went wrong in Our $15 RV Renovation Nightmare: What We Wished We Knew. One of the things we wished we knew was making sure we had the right insurance coverage for a renovated and full-time RV.
RV insurance for full-time living AND for renovations
We knew that you needed special insurance coverage for full-time RV living. What we didn’t know, was that there are special considerations if you are renovating an RV as well.
You see, we put $15,000 into our renovated RV. We spent $6500 on the rig and then put $8500 into the renovation. And then the day came that we needed to file a claim with our insurance company. There was a crack in the exterior, and we needed an estimate on the repair. When we filed our initial claim with insurance, they told us that they valued our rig at $8000. Yikes. So even IF they had paid out or claim, the most we could have gotten back was $8000.
This was something we hadn’t even CONSIDERED when we were purchasing or renovating the rig.
In talking with our agent, she let us know that they have two options for valuing the rig for insurance. The first option is to go off the purchase price and the second is to go off the resale value of the rig.
For example, we purchased our rig for $6500. Based on that purchase price, we insured it at a value of $8000. However, for the year, make and model, the resale value on our unit was $14,500. Had we initially insured it at that amount, our premium would have been higher, but we would have been more adequately covered.
Ideally, when purchasing an RV to renovate, you want to get a good enough deal on the unit itself so that the purchase price + the renovation cost < the resale value of the RV.
This is really important to keep in mind when planning your budget. If you get a used RV for $24,000 with a resale value of $28,000, you still want to keep your renovation costs under $4,000 to maintain the insurability of the renovation. You can check NADA for resale values and RVTrader.com to see what similar rigs are selling for.
Here’s the thing. Insurance can be a huge pain in the arse, but it is crucial that you have the right coverage and a good working relationship with your agent.
As frustrating as the whole situation was, our agent worked her butt off for us. From keeping the shop accountable to getting our estimate done, to advocating for us with the underwriters, she took our calls on her days off and did everything she could to help. For those wondering, we have Farmers Insurance.
Getting the right coverage
Your coverage is going to be KEY here in case something goes wrong.
1. Make sure you have full-time coverage.
I’ve seen people recommend “failing to disclose” that they live in their RV to keep rates lower. This is penny-wise and dollar-stupid. You may save money on your premium, but you are setting yourself up for major loss if you ever have a claim. Be honest with your agent about how you use your RV so you can be sure to have the right coverage.
2. Check if you need commercial coverage.
If you use your RV for business and you put your logo on the outside of your rig, check with your agent if your coverage needs to include commercial use! I’ve heard of RVers getting their claims denied because they had a logo decal on their rig. If you use your RV for work, this may qualify as “commercial use” which needs its own type of coverage. This is just another reason to be honest about how you use your rig.
3. Find out what kind of repairs are covered.
Some insurance companies won’t insure an RV if repairs are completed by someone who is not a certified RV technician. You will want to know this BEFORE completing a renovation or find a company that WILL cover your repairs/renovation. Also, if you are doing a renovation, be sure that you keep your receipts and inform your agent of the upgrades so they can assess the value appropriately. If you added value to your rig, you want your rig to be covered AT THAT VALUE! Take pictures of EVERYTHING- before, during and after so you can show what you’ve done if need be.
4. Get the right coverage add-ons.
The first add-on we recommend is loss of use coverage. This reimburses you for any living expenses should your rig need to go to the shop. This policy was the only way we were able to recoup some of our money invested in the rig. Our policy would reimburse expenses with receipts up to $5000. We were able to get a couple thousand back for expenses we incurred through the whole ordeal.
Additionally, be sure to get personal belongings coverage. This add-on covers anything that is not a part of the RV but could be damaged. This includes clothing, electronics, and computers, etc. If your RV is going to be your home, you want to be sure everything in it is covered by your insurance policy.
5. Take pictures early and get an inspection.
When talking with our agent, she confirmed that having an inspection from a certified RV inspector is a great way to verify that there is no pre-existing structural or water damage to the RV. Then, if a claim is filed later on, you will have evidence that this is a new issue and not one that existed before you even owned the RV.
Pictures are not only a fun way to document the process, but can also cover you in the event of a claim later on. If an adjuster has a concern about a pre-existing issue, being able to provide proof of what was (or wasn’t) an issue when you purchased it and renovated it may be a saving grace to you later on.
6. Make sure your RV is insurable.
Lastly, if you are considering purchasing an RV with a lot of needed repairs, be sure to talk to your agent ahead of time to see if it is insurable. The last thing you want is to purchase an RV that you can’t get insured because there is just too much existing damage. Don’t be afraid to ask questions and be honest with your agent about the condition of the RV you are looking at purchasing.
And while you are at it, ask about repairs. Will your insurance cover your RV after you’ve made repairs, or do they only cover repairs completed by “authorized” technicians?
The right coverage covers YOU and your RV
No one wants to spend $15k on an RV renovation only to discover it was inadequately covered by insurance. Trust me, I know! Having adequate RV insurance for full-time living in a renovated RV provides peace of mind AND coverage for those unforeseen events.
Leave the guesswork out of the process and get our FREE RV Insurance Checklist to help make sure you have the right coverage for your renovation.
Complete the form below to get access to the checklist!
Now go forth and create the tiny home of your dreams!