Policies to Cover Recreational Pursuits

Summer has arrived and it’s finally time to take to the road — and/or the waterways — for some excitement and leisure. Recreational vehicle camping and boating are two great ways to see the country and enjoy nature. There are over 16,000 campgrounds that cater to RV enthusiasts and more than 12.4 million recreational vessels registered for use in the United States.^1–2

Despite higher gas prices, outdoor fun should continue in 2011. Thirty-eight percent of RV owners plan to use their motorhomes as much this year as they did in 2010, and 53% say they expect to use them more.³ If you currently own or hope to buy a motorhome or watercraft, here’s what you need to know about insuring your investment.

Your Home on Wheels

Although it may be possible to add an RV to your auto policy, you may want to consider buying a stand-alone RV policy. For some travelers, an RV is much more than a car. It’s a home away from home — or their only home, in some cases.

Of course, an RV policy can include the bodily injury and property damage liability, uninsured/underinsured motorist, and comprehensive/collision coverage options (up to the policy limits) available with a standard auto policy, but it may also have features that could be more suitable for larger, more expensive vehicles and the travelers who own them (such as higher limits for roadside assistance coverage and towing, and emergency expense coverage that pays if a fire department is called to save your vehicle).

If you intend to take long trips, additional protection you might consider includes:

• Vacation liability — Covers you (up to the policy limits) if you are held liable for injury or damage to others that might occur in your campsite or in the area around your vehicle.
• Contents coverage — Protects valuable personal property, including luggage, sporting goods, cameras, and other items that are not considered “built-in” to the RV (such as the stove). Homeowners insurance will usually extend coverage up to your policy limits for the first 30 days, but the amount may be reduced significantly afterward.

Many insurance companies have special packages for “full timers” (people who use their motorhomes as a primary residence). RV owners who don’t own or reside in another dwelling may benefit from this comprehensive coverage, which is similar to a homeowners policy.

Protected from Bow to Stern

A boat policy can be customized for any type of watercraft, whether it’s a yacht, power boat, sailboat, fishing boat, pontoon, or other variety. Your state may or may not require coverage, but if you have a loan on your vessel, your lender will probably ask for proof of insurance. Common insurance claims involve hitting submerged objects, collisions with other vessels, theft, storm damage, and flooding or sinking while tethered to a dock or anchor.

Boat insurance coverage may include bodily injury and property damage liability (for injuries or damage caused by your boat or its captain), physical damage (to your own boat or trailer), and medical payments (for injuries to the boat owner and passengers). The amount of coverage may be tied to the current market value of your boat, the full replacement cost, or a specific amount of coverage agreed upon when the policy is opened.

Boat owners may also want to add optional coverage for a range of hazards, including theft, fire, flood, vandalism, uninsured/underinsured boaters, and the replacement of personal property kept onboard (such as electronics, fishing gear, and other sporting goods.) Keep in mind that a homeowners policy will probably not cover your boat, even if it is stored in the garage.

It’s a good idea to review your insurance policies before you travel, to understand the coverage limits, and to make sure you have the benefits and features you need.

1) U.S. Coast Guard, 2011
2–3) Recreation Vehicle Industry Association, 2011

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2011 Emerald Connect, Inc.