When Is RV Insurance Required?

Woman showering with a watering can outside an RV
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Owning an RV can be a lot of fun. It can provide a novel way to travel across the country, but you'll have to invest a good bit of money. Many RVs can cost as much as a house. Even modest RVs can be a high-cost purchase. 

You must also budget for ongoing costs, such as RV insurance. It’s vital to know whether you must carry it when you're planning to purchase a set of house-toting wheels. Many factors can come into play. Laws can vary by state, making the process rather confusing at times. Some rules can make the process of knowing whether you're legally obligated to carry it a little clearer.

When RV Insurance Is Required

At least the same amount of liability coverage that you must carry on a car is needed for an RV in all states. There are some special cases, but you'll most likely need a separate RV policy if your RV is a Class A or B motorhome, if you took out a loan to finance the purchase so you don't own your RV outright, or if it's a rental.

The law states that motorhomes must have liability insurance if they're driven on the road in most states. Full coverage can be optional based on whether you've financed the vehicle financed, but this doesn't mean that you should opt out just because you have the choice.

Figure out the value of your RV versus the chance of a loss to decide if your savings can bear the cost of the damage risk. Weigh the option of extra coverage if you live in your RV full time.

Financed RVs

Lenders often require that financed RVs must carry full coverage. They want back the money they lent in the case of a loss. Your lender could take out a policy and send you the bill if you don't purchase it yourself. Lender-purchased plans often come with much higher premiums and no liability coverage, so buying your own plan can be the smarter choice.

Rental RVs

You're responsible for a rental RV while it's in your possession, so make sure you have coverage. You can check with your auto insurance carrier to find out if your auto coverage extends to a rental RV. Rental dealers often either include insurance in the price of the rental, or they have short-term policies available for purchase if your auto plan won't cover it.

Check with your credit card lender, too. Some cover RVs you rent with your card, just as they often cover car rental insurance if you book a vehicle using your card.

When Insurance Is Optional

Coverage is often optional if your RV is only towable. It's Class C and you can't drive it. It might also be optional if you own your RV outright: There's no loan against it and you live in a state where RV insurance and liability insurance aren't mandated by law.

RVs that are towed include fifth wheels, pop-ups, and travel trailers. Liability coverage is often extended from your auto policy to your RV when you're towing it. Your auto liability coverage will cover the costs if your camper comes unhitched from your truck and damages someone else’s property.

States often don't require insurance on towable RVs because liability is covered under your car policy.

A loan-free RV means that you own the camper outright without any financing. RV insurance is only optional if your RV has no loan against it and is only towable.

Insurance isn't optional for RVs unless you live in a state that doesn’t require RV insurance. You'll have to carry the same state-mandated liability that you'd need on an auto if you're driving your RV on the road. These rules vary by state, but almost every state mandates some type of liability coverage for damage you might cause to other vehicles.

The Bottom Line

You might still want to carry full coverage on your RV even if it's not required by law because a total loss could be financially devastating. This might result from fire or theft. It doesn’t mean that you shouldn’t purchase it just because you don't have to carry it by law. Lots of owners leave their RVs parked out in an open yard so they're at risk for storm damage, vandalism, and theft.

Always talk to your insurance agent or other professional before deciding whether skipping insurance makes sense for you.