When our economy entered into the largest downturn since the Great Depression, one of the early casualties was the RV market. In late 2007 before the recession, sales of new and used RVs and trailers had hit an all-time high, and the average age of an RVer was 43-years-old.
Yes, you read that correctly─43. While most people in the insurance world believed that the spike in gas prices in 2008 caused the death of the RV business, in reality the evaporation of money for loans combined with the cautious nature of consumers who held back on buying big-ticket items was really to blame.
Now that spring is approaching and the American road beckons, some folks are returning to spending. With banks freeing up more cash for loans, RV sales are on the rise. Toy haulers─those combination trailer and motorcycle/ATV haulers─are the fastest growing segment of the business.
As an insurer, are you ready? Most of the insurance industry believes that RVers are, as one colleague put it, “the oldest drivers driving the largest vehicles causing the most expensive losses.”
Actually, the RV book of business can be, with a little claims discipline, very profitable for insurers. Total losses are rare and average claim frequency and severity rates are remarkably low. The first key step is developing a specialty RV policy and not force-fitting an RV into a standard auto policy. This will allow for tailoring of coverages to reflect the true nature of the RV business.
Another key is employing a level of expertise in RV claims handling. Develop a group of field appraisers who are willing to learn about the RV repair world. You may have a resource pool at your fingertips. I've found that if you ask around, you might discover that you have appraisers with motorhomes or trailers of their own. They will likely be eager to volunteer to learn more about this business.
Appraisers also need an estimating tool that is custom made for RV estimating and can be uploaded and performance tracked. An often overlooked part of training is the inside or telephone adjuster. Coverage questions are sometimes unique in the RV world, and the unprepared adjuster can sometimes resort to throwing money at the file until it closes, which can get expensive. RV-specific training is available, and it will be money well spent in your claims department.
So, are you prepared for this RV season?
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