How does insurance really work?

[lsbrodsky]

3 years ago when I bought our AS I insured with the stated value as our purchase price, ACV. I understood that total loss would be at depreciated value. As my policy renewed each year, the stated value remained the same although the trailer obviously depreciated.
This year I decided to get Agreed Value, got an appraisal as required, and renewed the policy at the new agreed value, which was lower than the previous stated value on the policy. My insurance bill is less because the stated value on the policy is less but I know from reading the policy that total loss is the agreed value on the policy.
Does this mean that if I had stayed at ACV, with the higher stated value on the policy and the higher premium, I was simply being robbed since the insurance company would only have paid a total loss of the depreciated value, less than the new agreed value?
Larry

[Ted S.]

Going thru this now as well.

My current policy is somehow hooked into my auto and homeowners policy. The auto covers the trailer when hooked up, the homeowners policy covers the trailer when not hooked up. The trailer is covered for Actual Cash Value (ACV) which was explained to me as the value of the trailer at the time of loss. Obviously, it would be worth more to me then what they would pay me. But even if they were fair, I would want to go out and buy a new trailer and would be out of pocket. However if you would be ok shopping for a used one, then maybe that works for you.

So my broker is quoting a 'Foremost ' insurance policy. Its specific to the trailer and covers everything right down to the attached accessories such as awnings. It will also pay for a new trailer if there is a loss which they call 'Replacement Cost '

I have not seen the quote yet, but will probably do it if it is reasonable.

One thing, you may have a hard time getting comments on this as the States vary and where I am in Massachusetts, we seem to make no sense at all when compared to most States.

[overlander63]

I haven't looked into the difference in cost, but if it is possible to get a replacement value policy, it might be a few dollars less. Replacement value is what it would cost to go out and buy another item like what you have. We had replacement value coverage on the contents of a house, as well as items on our property not in the house, many years ago. We suffered a loss, and the insurance company wrote a series of checks. First check was for actual cash value, the second was the difference between cash value and cost of replacement after we purchased replacements, and provided receipts, then a check for loss of us, then a check paying us for disposal of the damaged items.
Many states will allow a policy to be written on a travel trailer in a similar fashion, though the state we currently live in is not one of them.

[Ted S.]

I guess it is important too keep records of your trailer with the factory options and upgrades to get a true replacement vs figting with the insurance co about what you had.

[Northerngirl]

Originally Posted by Ted S.

Going thru this now as well.

My current policy is somehow hooked into my auto and homeowners policy. The auto covers the trailer when hooked up, .

Just a word of caution on that point. Have used the same insurance agency for years for home, cars and trailers. From the first trailer policy I took out a number of years ago I had assumed the above to be correct as well, or at least based on what the insurance agency selling me my insurance indicated. So each year had renewed under that assumption, even when changing trailers.

I found out the hard way that it was not true... at least not in as far a collision damage was concerned and the insurance company I was insured through. Did something change in the insurance companies fine print that none of the agents I dealt with over the years noticed previously? Or where they assuming I know about the change and had was opting not to have collision insurance on the trailer so simple processed the renewal policy each year. I did BTW carry seperate insurance on the trailer but not collision.

Bottom line is read the very fine print of the vehicles policy to see if it states if the trailer being towed is required to be separately licensed it requires its own insurance and is not covered by the tow vehicle. Do not count on the person selling you the insurance to know. I was not happy with my insurance agency about the situation so went to another.... was originally told that the insurance company they did the insurance through did cover the trailer when attached to the vehicle, that was until I had them read the fine print.

It may vary from state to state or province to province and insurance company to insurance company but best to read the fine print of your policy carefully.

[lsbrodsky]

That is why I thought I would post my question here since insurance agents often do not have answers, stating that they need to talk to the home office. But you can never talk to the guy at the home office.
I still do not get what kind of insurance I was originally paying for if the stated value on the policy was higher than my current agreed value, but the company would only pay ACV, depreciated value, which is less than my Agreed Value.
Larry

[Cleareye]

Basically, Insurance companies are in the business of roberry and they are good at it. Case in point. Almost all insurance companies will not pay a life insurance beneficiary unless they come forward after a death of the person buying the policy. They have saved hundreds of billions of dollars over the last 200 years or so by making no effort to find a beneficiary even though it would be easy to do so. Many people do not know they are listed, some do not know a person died. The companies just keep quiet and hope to never pay out, and that's where the billions come from.
In a fair world where theft was punished by jail time, all insurance excutives would be in prison.
Google 60 Minutes, life insurance scams.

[Gneiss Guy]

Since we are talking insurance, let me mention something that happened to me recently. After reading in this forum about the difference between actual cash value and agreed on value, I contacted an insurance company mentioned here as a company that wrote agreed-on policies. Imagine my surprise when I was not allowed to complete my application. It seems they were not interested in my business when they discovered I was over 75 years old. My 25+ years experience with trailers, my financial stability, my years without moving violation, nothing matters if I am over 75 years old. Has anyone else encountered this sort of age-discrimination in buying RV insurance?

[splyb]

Originally Posted by Gneiss Guy

Since we are talking insurance, let me mention something that happened to me recently. After reading in this forum about the difference between actual cash value and agreed on value, I contacted an insurance company mentioned here as a company that wrote agreed-on policies. Imagine my surprise when I was not allowed to complete my application. It seems they were not interested in my business when they discovered I was over 75 years old. My 25+ years experience with trailers, my financial stability, my years without moving violation, nothing matters if I am over 75 years old. Has anyone else encountered this sort of age-discrimination in buying RV insurance?

Bobalue!
I smell a lawsuit. While I suspect you didn't, it would be sweet to record that call, 'cause I guarantee you, if you filed a class action for age discrimination - if they're doping it to you you may rest assured they're doing it to many others - they'll have at least three dozen excuses for refusing to insure you that have nothing to do with age.
Of course, in addition to being in the business of robbery, insurers are in the business of getting away with robbery - filing and defending lawsuits. Those filed against them and their insureds are "frivolous", those by them and their insureds are "righteous" and "necessary".
Insurance is the most patent legal racket in the modern economy.
OK. I'm going to get off my soapbox and post an inquiry about fixed window gaskets.

[DKB_SATX]

I'm sure all states vary a bit in their insurance regulations and practices. Perhaps Canadian provinces do too but I've no actual knowledge of that. To Northerngirl's experience I'll say that insurance in Texas works in a similar way. The trailer is covered with respect to LIABILITY (both property and injury) while it's been towed, but there is no coverage of any other kind that attaches to the trailer from ones automotive policy. If you want coverage for damage to your trailer you have to buy that as a specific policy or specific rider to a multi-vehicle policy, depending on how your insurer likes to do it. My trailer is listed as a line item on the covered vehicles on my policy (VIN and all) but is NOT listed on my Texas liability insurance card that has to be carried in all vehicles, since the liability is from the truck.

[DKB_SATX]

Reputable insurance companies are not thieves, per se, they're casinos. Legalized (and in certain instances legally or practically mandated, such as liability insurance or insurance when your asset is financed) gambling.

You're betting you're going to need to make a claim, they're betting they won't have to pay. The house always wins in the overall picture.

[rodsterinfl]

Good question. I have written several posts on this topic.

My quest began when I was contacted one day by Good Sams and an agent went through all of this "stuff" about how I was not well insured with a camping trailer under my truck policy. He explained all these negative scenarios and told me that I should at least have an RV policy with RV adjusters.

Well, I switched to their National General. When I got the policy I noticed it was an "auto" policy (stated as such). I called them and was told the SAME THING as I was told with my previous setup on claims, payouts and total loss. I was ticked.

I dropped the insurance and began looking for an RV policy. My days of calling and talking to companies taught me some things one of which is your question. Basically, we pay for ACV policies on an initial value price even though the thing is depreciating like crazy. What is worse is that when you end up in a total loss- the payout is more like wholesale- see NADA retail and price range. I was told this by MANY COMPANIES- that is all they pay and, what is worse is that there is a percentage formula for total loss even on a "fix" that they will not pay out if too close to full value- I assume only for the potential of nickel dime damage control??

Agreed value does not depreciate according to my insurer. It is simply a value amount you are covering for. There are some tricky clauses when covered under another policy. Like everything else, buyer be-aware.

[SteveSueMac]

A small side comment. In any industry there are companies that act well and those that act poorly. Having one bad experience with a Dr., for example, does not mean the entire medical profession is a fraud. But one is entitled to believe whatever one wishes.

The thing most people don't understand about insurance is that the community of people who pay premiums are pooling risk so one person doesn't have to "go it alone" should something go wrong. One's premium is not solely for himself.

The insurance company makes a promise to pay under very specific circumstances outlined in the contract and regulated (in the US) by each state.

If the company pays every claim filed without evaluating whether or not there was coverage in the first place and fully investigating the facts of the claim, they would not be honoring the contract ant more than they would if they refused to pay any claims without evaluating coverage and investigating the facts.

The behavior of the former protects the community of premium payers by ensuring when their need arises they'll be protected. The behavior of the latter is illegal.

Deal with reputable firms in every business you can - especially insurance. Read your policy. Ask questions if you don't understand. And yes - if you can self fund portions (or all) of your risk, do that by all means. For those who've had bad experiences with less scrupulous firms, I'm genuinely sorry to hear that.

[horseylady]

Maybe I'm missing something here but, for as far back as I can remember, the liability for any towed vehicle (not a toad) fifth wheel, travel trailer, horse trailer, utility trailer, etc., is covered under the towing vehicle's policy. We have always had separate policies for comp, collision etc. for our trailers. We have never changed companies, or at least not for 40 years, or so, and have been treated right.

[Gman911e]

Agreed Value Insurance is not an ACV Policy. The unit is insured for a specific dollar amount. In the event of a total loss the check to the insured will be the Agreed Amount with no downward adjustment for depreciation. This term is quite familiar to those who own Collector Cars. This works well for the Insurance company where an asset is going up in value. Agreed Value policies are not generally issued where the strong possibility exists the asset is going down in value. The company will probably be sending you a questionnaire every few years that may require photos.

[John Geisen]

We've had our Airstream since purchasing it used in 2007 (if my memory is correct). We have been with the same insurance company for 27 years and I was pleased to learn they were able to write RV insurance on our 28' CCD.

Last month I rubbed the driver's side just enough to that both the upper and lower panels needed to be replaced. Airstream estimates $12,000 damage. Our insureance company is telling us that our NADA value is $12,000 so they "may have to" total our trailer. Of course the market value of our trailer exceeds $25,000. Our adjuster is an auto guy and claims the company does not have separate RV adjusters. No decisions are final at this point but I wish I now wish I would have read our AS Forums more often to learn about insurance intricacies. Even though our insurance company advertises RV insurance I think it is just another way to collect additional premiums. I certainly don't feel like my loyalty has earned much.

[rodsterinfl]

Bingo John!

I do not believe it is just reputation of company- we had our auto and home insurance with State Farm for thirty some years then they pulled out of providing policies for homes in FL and our auto insurance went way up in price. We had a few claims through the years and had issues each time - thank goodness for our agent who always worked it out. He retired. Now we are with another company.

It is all about the policy type you have and what is in writing. You have to check this EVEN after going through it with an agent. We assume that people represent things as they are and that is the first mistake as we need to read the agreement for ourselves.

As for replacement policies- yes that is good if you can get it and it is not too costly. Most companies will not offer it unless your Airstream is five years or less in age - I was told. That is why I shared that the agreed policy is really the way to go for those with older than five year units.

That foremost policy may be a good thing. Sounds like some form of umbrella policy. Here in FL when we checked on an umbrella policy it was through the roof in cost.

[PecanMan5]

USAA tells me they use the sticker value when it was new. What are they really telling me? That is the only answer they give.

[DKB_SATX]

Originally Posted by PecanMan5

USAA tells me they use the sticker value when it was new. What are they really telling me? That is the only answer they give.

My guess is the next part they're not saying is "and apply the NADA depreciation table to determine today's value." That would be standard industry practice for automobiles at least, but as you see higher in the thread Airstream prices don't follow the standard depreciation and haven't since I started following these forums a LONG time ago, but the NADA values never seem to get fixed.

[lsbrodsky]

USAA won't insure RV's; they pass that off to Progressive so I would not listen to anything a USAA rep says.
Larry