If you carry Replacement Cost Coverage, it is most important that your coverage or policy limit be enough to replace your unit and its personal belongings at current retail costs, including taxes, in the event of a total loss. See also the section titled “TYPES OF PERILS OR COVERAGE” for an explanation of the forms available. If you elect NOT to take the All Risks Form which covers for Replacement Cost, then your loss will be settled on an Actual Cash Value basis, which means that depreciation will be applied and, if the cost to repair is equal to or greater than the insurance value you carry on your policy, it will be considered a “Constructive Total Loss”. This means that policy limits will be paid out in cash and the salvage will become the property of the insurance company.
Types of Perils or Coverage:
There are 2 main types of packages: NAMED PERILS FORM AND ALL RISKS FORM. The differences vary between carriers but, generally, the Standard Form lists the perils insured on an Actual Cash Value Basis, so your loss must fall under one of these listed perils to be covered. The Comprehensive Form, the best package available, extends to All Risk for contents plus Replacement Cost and the onus shifts to the insuring company to prove the loss falls under an exclusion of the policy. There are always exclusions, so read your policy carefully and stay in touch with your agent.
Special Limits of Insurance:
Normally, the intent of the policy is to cover personal property kept throughout the year in the vacation trailer, tent trailer or camper and which is for use with the unit. Some policies contain a specific maximum limit for items such as jewelry or furs – check your policy wording to see if such a limit exists if you normally keep these types of items in your unit. Any personal property temporarily away from your residence while in the unit is normally covered under an extension of your home insurance, if any.
If your coverage is on the ALL RISKS FORM, there will be coverage afforded for Emergency Expenses incurred due to insured damage or destruction. The amount paid out on a daily basis for expenses until you can return home varies between carriers and is for the rental of a substitute trailer, or if none is available, other equivalent accommodation.
Trailer Contents While Away from the Unit:
Some policies only cover the contents of your travel trailer, camper or tent trailer while they are actually located in the unit, at the time of the loss. Please check with your agent to see if this restriction applies to your policy or not.
It is most common for Travel Trailer policies to cover units only within the territorial limits of Canada and the United States. If you plan to take your unit outside or beyond these defined areas, please contact your agent right away so that special permission may be obtained, if available. If you are traveling into Mexico, you will probably be required to take out local insurance there at the time that you cross the boarder into that country. It may be possible to obtain a pro-rated refund on your policy for the unit, for the time you were in Mexico and carried separate insurance. You would need to provide proof of the continuous separate insurance policy for the period of time you were there.
PLEASE CHECK WITH YOUR INSURANCE AGENT FIRST BEFORE GOING OUT OF CANADA OR THE U.S. SO THAT THIS INFORMATION CAN BE CLARIFIED WITH YOUR CARRIER.
Personal Use Restriction:
Policies contain a Warranty or a Restriction of coverage for personal recreational use only. If you use the unit for a permanent residence or for commercial purposes, or if you rent or lease it to others for compensation, the coverage becomes invalid. Some carriers will allow seasonal residential use for a premium surcharge. With others you would have to cancel and obtain specialty coverage.
CONTACT YOUR AGENT IF THE USE OF YOUR UNIT CHANGES.