RV Total Loss: Replacement Value vs. Depreciation

Your RV is one of the largest purchases you'll ever make. A new Class A motor home can cost $100,000 to $500,000. Even a solid travel trailer runs $25,000 to $75,000. So what happens if it's totaled in an accident, a fire, or a severe storm?

The answer depends entirely on how your policy values the vehicle. And the difference between the options can be tens of thousands of dollars.

This is the standard settlement option — and it's the one most people end up with if they don't ask for anything different.

Actual Cash Value pays what your RV is worth at the time of the loss, minus your deductible. Sounds fair, right? The problem is depreciation.

RVs depreciate. A motor home that cost $150,000 three years ago might have an ACV of $95,000 today. If it's totaled, that's what you get — $95,000. Not enough to buy the same RV new, and probably not enough to buy a comparable used one either.

ACV is the cheapest option on your premium, but it's also the riskiest if you have a newer or financed RV.

This is the best protection available for newer RVs, and you won't find it on an auto policy.

How it works: If your RV is totaled during the current model year through the fourth preceding model year, the insurance company replaces it with a previously untitled vehicle — same make, class, size, and type with comparable equipment. You don't get a check for a depreciated amount. You get a new RV.

If the replacement vehicle isn't available or you don't want it, you receive the full purchase price instead.

Key details:

• Available on newly purchased, previously untitled RVs (up to one model year old at purchase)
• Maximum replacement payout capped at 120% of the purchase price on your declarations page
• Purchase price includes the RV, all permanently attached equipment, taxes, title fees, and license fees
• Cannot be reduced during the first 5 years — and must be increased if you add permanently attached equipment
• For RVs in the fifth preceding model year or older at the time of total loss, pays the purchase price (not replacement)
• Motor home cap: up to $500,000-$700,000 depending on the program
• Travel trailer cap: $300,000

Who this is for: Anyone buying a new RV. If you're driving it off the lot, Total Loss Replacement ensures depreciation doesn't rob you of your investment.

Agreed Value is designed for RVs where the standard market value doesn't tell the full story — older units that have been meticulously maintained, customized rigs, or vehicles that hold their value better than depreciation tables suggest.

How it works: You and the insurance company agree on a value when the policy is written. That value goes on your declarations page. If the RV is totaled, you receive that agreed amount — regardless of what the actual cash value might be at the time of loss.

For partial losses, you receive the lowest of: repair cost, replacement cost, or the agreed value.

Key details:

• One program caps Agreed Value at 125% of system-displayed market value, or $100,000 for motor homes / $75,000 for travel trailers — whichever is less
• One program allows Agreed Value for 10 consecutive policy periods, then it converts to ACV unless renewed
• An appraisal may be required
• Not available on horse, utility, or cargo trailers in one program

Who this is for: Owners of used RVs who want guaranteed value, especially if you've added upgrades or your RV is in better condition than average. Also a strong choice for RVs that no longer qualify for Total Loss Replacement.

Total Loss Replacement coverage caps the payout at 120% of your purchase price. That cap matters more than most people realize.

Say you bought your motor home for $200,000. Three years later, a comparable new model costs $230,000 due to manufacturer price increases. The 120% cap means your coverage can go up to $240,000 — enough to cover the replacement.

But if prices have jumped beyond 120% of your original purchase price, you could still face a gap. This is rare, but it's worth understanding.

Total Loss Replacement coverage has a built-in shift at the five-year mark.

During the current model year through the fourth preceding model year, you get full replacement — a new RV. Once your RV hits the fifth preceding model year, the coverage switches to paying the purchase price instead. You still get more than ACV in most cases, but you won't get a brand-new replacement.

This is one reason we talk to clients about their coverage options as their RV ages. At some point, transitioning from Total Loss Replacement to Agreed Value might make more sense.

Choose Total Loss Replacement if:

• You're buying a new or nearly new RV
• You want the strongest protection against depreciation
• You're financing the purchase (lenders love this coverage)

Choose Agreed Value if:

• You own a used RV
• Your RV has been customized or upgraded
• Your RV no longer qualifies for Total Loss Replacement
• You want certainty about what you'll receive in a total loss

Choose ACV only if:

• Your RV has minimal value
• You're comfortable absorbing the depreciation gap
• You want the lowest possible premium

Nobody thinks about how their RV is valued on the policy until it's totaled. By then it's too late to change anything. Total Loss Replacement and Agreed Value cost a bit more in premium, but the difference in payout can be enormous.

Pull out your declarations page — the valuation option is listed right on it. If you're not sure what you're looking at, bring it in or give us a call. We'd rather talk about this now than after a total loss.