Do you have proper RV insurance? The question is not as simple as it sounds, and the answer depends to a great extent on what you have told your insurance company.
I’ve lost count of the number of times I’ve heard RVers admit that they have deceived their insurance company. The dialogue usually goes something like this:
“Which insurance company do you use?”
Full-time RVer: “We just switched to ACME.”
“What’s ACME charging for full-timers?”
Full-timer: “Oh, I never told them we’re full-time…”
“Does business use raise your RV insurance premiums by much?”
RV Entrepreneur: “Oh, well, uh, I never mentioned anything about business use to the insurance company…”
The decision to go RVing full-time is often the realization of a dream and a big step in any case. It requires a lot of planning and not inconsiderable costs and risks. Failing to insure for the risk of accident, fire, theft, or litigation could be financially disastrous.
Starting a business where you can combine RVing with earning a living is an exciting and worthwhile endeavor. It requires enterprise, dedication, and investment. One of the most critical elements the new mobile business mogul must consider is, “Am I insured?”
Business insurance, as opposed to personal coverage, is necessary because it is designed to protect you and your business from unexpected financial losses that can arise from accidents, theft, lawsuits, etc. If you are using your RV in the conduct of any business activity, it is essential to have business insurance to protect your investment and ensure that you are covered in case of the unforeseen. Merely withholding disclosure of your business use from your insurance company is a very bad idea.
An RV can be used as a mobile office, a store, or even as accommodation for employees. It can serve to access epic scenery, unique places, and wildlife on the road for the making of spectacular videos. But using your RV for business purposes poses its own unique set of risks.
Business insurance for your RV typically includes general liability insurance, commercial auto insurance, and if you employ others in the business, workers’ compensation insurance. General liability insurance protects your business against third-party claims for bodily injury or property damage, while commercial auto insurance covers any damage to your RV and other vehicles involved in an accident. Workers’ compensation insurance covers any injuries or illnesses that an employee may sustain while working for you.
Without business insurance, you could be exposing yourself and your business to significant financial risks. For example, let’s say you attend RV rallies where you sell a product, using your RV as a mobile storefront. Your RV catches fire and causes another RV to ignite. Without general liability insurance, you could be held liable for the other owner’s medical bills, lost RV, wages, pain and suffering. The cost of such a claim could be high and could well put your business at risk of bankruptcy.
Similarly, if your RV is involved in an accident, the cost of repairing or replacing the vehicle could be huge. Without commercial auto insurance, you would have to bear the entire cost of repairs or replacement. Moreover, if you are found liable for the accident, you could be held responsible for the damages caused to other vehicles involved in the accident. Business insurance provides coverage for such incidents, protecting your business from financial losses and potential ruin.
Accidents can happen at any time. A tire may blow out, causing damage to your motorhome or travel trailer. You could have an accident or collision, leading to expensive repairs, lost business, and potential lawsuits. You could have your business equipment stolen and then enter a claim under your insurance policy for the loss. What if the insurance company, discovering evidence that you were using your RV in pursuit of a business enterprise, said “no” and declined to pay your claim?
Court RV insurance cases
Here are some court cases that illustrate these points:
Norton v. St. Paul Fire and Marine Insurance Co.
This 1990 Arkansas case addresses the common instance of an RV owner failing to disclose full-time RV living to the insurance company.
Bruce and Linda Norton, residents of Arkansas, insured their 1985 Coachmen Classic RV through a policy issued by First Arkansas Insurance of Pine Bluff, an agency authorized to issue policies on behalf of St. Paul, a Minnesota corporation.
The Nortons lent the RV to their daughter, who parked the RV on rented property in Yukon, Arkansas, living there full-time. A windstorm overturned the Coachmen Classic RV and destroyed it. The Nortons submitted an insurance claim, which St. Paul Fire and Marine Insurance Co. denied, on the basis that the RV was being used as a “permanent residence.” The Nortons sued for breach of contract, but the court ruled in favor of the insurance company.
Carrington v. Mendota Insurance Co.
This matter was heard in the Commonwealth of Massachusetts Superior Court in Worcester. Judge Peter W. Agnes, Jr., Justice of the Superior Court, granted Mendota Insurance Company’s Motion for Summary Judgment.
The action involves an insurance coverage dispute stemming from a fire loss to a Safari Motor Home owned by the Plaintiffs (the “Carringtons”) and insured by the Mendota Insurance Company. Mendota denied coverage for the loss based on the business use exclusion in the Carringtons’ insurance policy. The Carringtons filed suit for breach of contract and violation of Massachusetts General Law.
Calvin Carrington owns and operates a motor sports entertainment business known as Wildfire Motorsports (“Wildfire”). This business produces motor sports events such as demolition derbies, monster truck shows and motorcycle shows. While at one such show, the Safari caught fire and burned. The Carringtons made claim for the loss on their insurance policy. Mendota denied the claim, citing an exclusion:
“Section D — Recreational Vehicle Damage Coverage: We do not cover loss … when your Insured Recreational Vehicle is used for business or commerce.”
The Carringtons sued, but the court ruled for the insurance company, based upon the specific language in the Carrington’s policy.
Don’t be a full-time RVer or business-owner RVer WITHOUT RV insurance
Living full-time in your RV or using your RV for business without telling your insurance company can have serious consequences. Insurance policies have specific terms and conditions, and failing to disclose material facts upon which the insurance is underwritten could (and more often than not does) result in a denied claim. Your insurance company will investigate the circumstances surrounding the loss to determine if your policy will cover the claim.
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Only if every RVer read this article would its dissimination be wide enough. Thankfully nothing happened, no insurance claims arose when we lived in our RV while our house was built. It never occurred to me that our insurance policy prohibited us being in the RV more than a specified number of days. Over the last five years we have stayed within the upper limit of days allowed. It currently is no more than 150 days. I will speak to our agent (purchased through FMCA) prior to our anticipated trip to Alaska in 2024 to ensure we have appropriate coverage. Thank you for calling my attention to a topic I tend to overlook.
Interesting article. Here is another one which explains the conundrum a little better.
Yep, heard it too many times to count; “I didn’t tell them I lived in it full-time.” I hope they never have a claim but if they do I believe they will regret their decision to not tell all the truth. I’m betting their dishonesty will cost the rest of us in higher rates too.
People that lie to their insurance company to get coverage are no different than common thieves. It is called insurance fraud and the honest people pay for it. Can you tell it is a hot button issue for me?
And then they are angry at the insurance company for denying coverage for a loss that they told the lie about. My own experiences with insurance over my life has been excellent but just like my doctor, I tell my insurer the truth. Bad data, bad result.