By Randall Brink
It all started with one word… and an online discussion of RV insurance.
The debate revolved around what happens if you experience a total loss of your RV. There was much discussion of “book value,” “actual cash value” and “agreed value.” Most people were of the mind that these terms were the same. They’re not. So I can imagine that many parties to the exchange did as I did and ran straight to their insurance files to read their policy.
That one word meant that, instead of getting a reasonable value for my coach in the event of a total loss, I would, instead, be paid a fraction of that based on the so-called “book” value.
RV dealers typically use the NADA Guide to determine the value of a used RV. The NADA Guide is published by the National Association of Automobile Dealers, which means that the automotive industry manufacturers and dealers organization produces the guidebook that determines what your RV is worth. The guide is heavily biased to the low, low side. Insurance companies also use this publication to determine what an owner is paid in the event of a loss. That’s if your insurance policy says “Actual” value.
If, on the other hand, the policy is based upon “Agreed” value, then you and your underwriter will agree upon a reasonable value for your coach, and that is the value for which you are insured.
The irony in my case was that I had discussed this issue with my insurance agent. In fact, it was the primary reason that I switched insurance companies to one that would provide an Agreed Value policy, but the policy was written incorrectly. I am glad I caught the error, and urge everyone to scrutinize your insurance policy as well.