Filling the Gaps: Loan Payoff, Disappearing Deductibles, and More RV Protections
Your RV policy has protections you might not know about — gap coverage, disappearing deductibles, and no depreciation on partial losses. Here's how they work.
Jon Parrack
In Part 2 of this series, we covered the big total loss options — Total Loss Replacement, Agreed Value, and Actual Cash Value. But your RV policy has several other financial protections that don't get talked about as much — and they can save you real money when you file a claim.
Loan / Lease Payoff Coverage (Gap Coverage)
If you financed your RV, here's a scenario that happens more often than you'd think: your RV is totaled, and the insurance payout is less than what you still owe on the loan.
This is the "gap" — the difference between what your RV is worth and what you owe. It happens because vehicles depreciate faster than most loan balances decrease, especially in the first few years.
Loan/Lease Payoff coverage (commonly called gap coverage) pays that difference.
How it works:
- In the event of a total loss, it pays the difference between the actual cash value and your remaining loan or lease balance
- Requires both Comprehensive and Collision coverage on the policy
What it doesn't cover:
- Unpaid finance charges
- Excess mileage charges (on leases)
- Extended warranties
- Credit life insurance premiums
- Past-due payments
- Collection or repossession expenses
If you financed your RV with a long-term loan, put less than 20% down, or owe more than your RV's current market value — you need this. Being upside-down on a loan after a total loss, with no RV and a remaining balance to pay, is exactly as bad as it sounds.
Disappearing Deductibles
This one rewards you for not having claims — and the payoff is real.
How it works:
- Your Comprehensive and/or Collision deductibles decrease by 25% for each consecutive claim-free policy period
- By the fourth consecutive claim-free period, your deductible reaches $0
- If you file a claim, deductibles return to the original amounts at your next renewal
Example: Start with a $1,000 deductible:
- After 1 claim-free year: $750
- After 2 claim-free years: $500
- After 3 claim-free years: $250
- After 4 claim-free years: $0
Key details:
- Available through one program
- Included automatically with Total Loss Replacement/Purchase Price and Agreed Value when the rating base is $25,000 or more
- Optional for all other vehicles
- Only physical damage claims to the RV affect your deductible level — other claim types don't reset it
No Depreciation on Partial Losses
Most people understand depreciation in the context of a total loss. But depreciation can also bite you on partial losses — the smaller repairs that are far more common.
The problem: when a part of your RV is damaged and needs to be replaced, some insurers deduct for "betterment." That means if your 8-year-old awning is destroyed, they might only pay a fraction of a new one because the old one had years of wear.
One of our RV programs explicitly promises no deduction for betterment or depreciation on partial losses. You receive full compensation for replacement parts at current value, regardless of how long the old parts were in service.
On an older RV, betterment deductions can eat your claim payout alive. A $3,000 repair might only net you $1,500 after depreciation. With no-depreciation coverage, you get the full $3,000.
How These Work Together
These coverages complement the total loss protections we covered in Part 2:
- Total Loss Replacement or Agreed Value protects you if the RV is destroyed
- Gap coverage protects you if you owe more than the RV is worth
- Disappearing deductibles reduce your out-of-pocket costs over time
- No depreciation on partial losses ensures fair repair payouts
Together, they keep you from eating unexpected costs — whether it's a fender scrape or a total loss.
The Coverages That Pay You Back
Nobody gets excited about gap coverage or disappearing deductibles. But they're the kind of thing that saves you real money when you actually need to file a claim. Gap coverage keeps you from owing money on a totaled RV. Disappearing deductibles reward you for not having claims. And no depreciation on partial losses means your repair check actually covers the repair.
Grab your declarations page and give us a call. We'll walk through what's on there and what's missing. Takes about ten minutes.
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