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RV insurance: Covering your home away from home

High gas prices aren't stopping Americans from buying recreation vehicles. RV shipments for the first half of 2011 were up 6 percent compared with the same time period in 2010, according to the Recreation Vehicle Industry Association.

But an RV is a big investment -- and a risky one. If your RV is destroyed in an accident or a disaster, you could lose your home and your wheels at the same time. RV insurance combines aspects of home and auto insurance to provide unique coverage for those who live on the road.

A special kind of policy

Insurance agents refer to RV policies as "specialized" policies.

"When purchasing RV insurance, especially for the first time, the most important thing to remember is that specialty RV insurance offers you protection that is not available with a typical auto insurance policy," says Tod Carney, agency manager at Explorer RV Insurance Agency Inc.

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One such difference between specialty RV policies and regular auto policies involves what happens if the vehicle is totaled. With a traditional auto insurance policy, you would receive the amount the RV was worth at the time of the accident, also known as its "actual cash value." This might not be enough to purchase a replacement.

Some insurers, however, offer some other options when it comes to insuring RVs. Progressive, for example, allows RV owners to insure their vehicles for their total loss replacement value. That means you would receive enough to get a new RV of the same make and model, according to Progressive's website.

Progressive also offers coverage for emergency expenses, which is similar to the "additional living expenses" coverage often found under home insurance policies. If your RV is in the shop for repairs and is deemed uninhabitable, the insurer will cover up to $2,000 for lodging and transportation -- and up to $7,500 if you've purchased extra coverage and use your RV as a primary residence.

Emergency expense coverage varies, according to Carney. In general, insurers will offer a $750 coverage limit for owners who use their RVs purely for recreation and $1,500 for people who live in their RVs.

"Hotels, meals and car rentals are all examples of expenses that may be reimbursed for RV-ers who are stranded while waiting for their RVs to be repaired," he says.

Another way that RV insurance resembles home insurance coverage is its treatment of personal belongings. Auto insurance rarely covers the valuables you keep in your car, like cameras, laptops and GPS devices. If it isn't permanently attached to your vehicle, it's probably not covered. RV coverage, however, often does cover your personal effects. Progressive's "Replacement Cost Personal Effects Coverage" for RVs, for example, covers things like clothing, cameras, portable radios and passports if you have comprehensive coverage on your RV.

Cutting costs

When it comes to saving money, Carney advises RV owners to ask whether their insurance includes "diminishing deductibles" -- coverage that lessens an RV owner's financial burden over the life of the vehicle. After each claim-free year, the deductibles for comprehensive and collision coverage are reduced by a certain percentage of the original deductibles until they become zero.

For example, according to Carney, if a policyholder chooses $1,000 deductibles for both collision and comprehensive coverage, and the deductible diminishes by 25 percent annually, each of those deductibles would go down by $250 each year as long as the policyholder doesn't file a claim. If you do get in an at-fault accident at, say, the three-year mark, you would have to pay only $250 out of pocket.

"It's an option that is hard to decline," Carney says.

RV owners might also be able to lower their premiums by joining an RV group or association. Try the Good Sam Club or the Family Motor Coach Association.

Above all else, make sure to get out there and kick some tires when shopping for policies. If you can manage that, you'll sleep better inside your RV at night.

"The real benefit of RV specialty coverage is the peace of mind knowing that your unit, lifestyle and family are protected," says Jen Koch, general manager at National Interstate Insurance Co., which sells RV insurance. "When traveling, your RV is really your home away from home, so you need specialized insurance to fully cover you and your valuable property."

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