You’ve heard it before—vehicles depreciate in value as soon as you drive them off the lot. In fact, within just one year, your new RV can depreciate by approximately 18 percent. But how does depreciation factor into RV insurance?
If your RV is destroyed or “totaled” in an accident, how much money will you receive from your insurance provider to put toward a new vehicle? That depends on what type of coverage you own. The two main types are replacement value and actual cash value coverage. Let’s take a closer look at the details.
Replacement Value 
If your RV is destroyed, replacement value coverage offers a sum large enough to pay for a new replacement model. Guidelines vary from insurer to insurer, but this coverage may have limitations such as only pertaining to vehicles within the first five model years.
Actual Cash Value
If your RV is destroyed, actual cash value coverage offers a sum equal to the amount of your vehicle’s current value, which takes depreciation into account. Therefore, it’s likely that you will not receive enough money to purchase a new vehicle.
The right coverage for you depends on your unique needs—most notably, your budget. Since replacement value coverage offers more protection, you can expect it to cost more than actual cash value coverage. But the price difference may not be as big as you might expect.
Contact your independent insurance agent for customized assistance and a fast, simple quote. We’ll be happy to assist you by phone, email or in person.
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