What Agents Need to Know About Recreational Insurance

Vehicles used for recreational purposes such as RVs or boats carry distinct risks that require unique claims, coverage and concessions that automobile insurance does not. Before your client puts his boat in the water or sets out on a road trip across the United States, an insurance agent that sells recreational insurance must inform his client of the differences, outline the options available and propose the best solution.

When an agent is consulting with his client, his duty is to educate the consumer on his insurance options. In some cases, adding an endorsement to his existing automobile policy may be fine, but in the majority of cases, your client is going to want to purchase a stand alone recreational insurance policy because of the customization and flexibility it offers. It is your obligation, as their insurance agent, to conduct the proper research, ask the appropriate questions and provide a fair and honest quotation so they will be provided with the best policy to fit their specific needs.

First, an agent must realize that claims on recreational units can be different than on a regular auto insurance policy. Recreational units experience unique challenges. In addition to bad weather claims (for example, hurricane force winds or hail and snow storms), unexpected changes in terrain can cause damage. For instance, improper docking at a marina could cause fiberglass damage or worse, damage to the engine prop, misjudged height on a bridge could cause damage to your RV antenna and rack or unpaved and unkempt roads and campsites could cause glass damage or a flat tire. Furthermore, recreational units may contain a variety of items that can malfunction such as generators, refrigerators, stoves, toilets and electrical panels that all require special protection.

Another unique claim to recreational insurance is the damage that can be experienced while your unit is in storage due to a freezing water supply in the holding tank, vandalism and rodent infestation. Believe it or not, I’ve had the personal experience of goats gnawing on the fiberglass of my boat while in storage over the winter.

Since many claims on recreational vehicles will be exclusive to that type of product, recreational insurance coverage offers many unique and flexible options for your customers.

Coverage Options

An automobile insurance policy is typically an “actual cash” policy which means that if the car is totaled, the policy will only pay out the current market value of the car. With RV or marine insurance, inform your client that he typically has different coverage options to choose from.

One option is market value, which means your client’s property would sell for what is found on the recreational vehicle market.

Another option is total loss replacement coverage. This coverage will replace the owner’s RV or boat with a brand new unit identical to the one he owns or upgrade him to the newest similar model if his model is no longer available.

A third option is agreed value coverage, which will entitle the policy holder to the full amount agreed upon when the policy was purchased and can be used towards the purchase of a replacement RV or boat.

An agent should also know how their client intends to use his purchase in order to further customize the policy.

For instance, if an RV owner is going to live on his RV six months or more, he may be considered a full-timer and may qualify for full-timer coverage that provides heightened liability limits which protect from claims due to accidents that cause injury to other people or to their property. This coverage has the benefits of a homeowner’s policy, auto and RV coverage in a single policy and protects the owner at all times.

If your customer plans to bring his pets along for the ride, there is pet injury coverage that protects his dog or cat from an accident while inside his RV. This policy will cover a specified amount for veterinary costs.

For the marine client, if they plan on sailing their boat across international waters, they may find it necessary to have extended insurance protection which offers greater navigational limits to protect against perils from breakdown to piracy and/or terrorism. But if your client lives in Minnesota and only boats for four months out of the year, she may only need seasonal insurance.

Even more specific, if your client is a competitive fisherman, you may be able to offer him fishing tournament fee reimbursement coverage that reimburses prepaid tournament entry fees in the event he misses the tournament because his boat is inoperable.

Discounts

Recreational policies offer unique discounts. Most folks know that with automobile insurance, a good driving record can reduce your rates and a male driver, under the age of 25, will have a higher rate than a 16-25 year old female driver. However, not many people realize the various discounts that can be applied to recreational insurance.

In the RV world, a driver with a good record can receive a disappearing deductable coverage, which rewards safe drivers with reduced collision and comprehensive deductibles. For each claim free year, a driver’s deductible reduces by a specified percentage until the policy reaches a zero deductible.

Boaters may receive a safety operations training discount after the successful completion of a boater safety course. The use of safety equipment, such as vapor detection devices, GPS systems, Epirb or Ship to Shore radio on a boat may get a discount as well.

Once an insurance agent understands how recreational claims, coverages and discounts can differ from other policies, it comes down to educating their client and finding the best policy for their client’s needs.

Each client and policy is different, but by understanding the special nuances of recreational policies, you can serve as the best advocate for your customer ensuring they receive maximum protection.