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Purchasing Peace of Mind for RV Owners

Originally Published in MotorHome Magazine

2087785_peace_of_mind.jpgEager to become a full-time RVer, James Fetzer often goes to RV shows to see the latest products the industry has to offer, and to ask questions of dealers and other RVers.

But Fetzer learned a lot more than he bargained for when he visited the Pennsylvania RV & Camping Show last September. While speaking with a dealer, Fetzer learned that Weekend Warrior, the Perris, California-based company that manufactured his 40-foot fifth-wheel, had gone out of business. Fetzer had just bought the vehicle in May.

“I checked on the Internet and found out it was true,” said Fetzer, 55, adding that he was miffed that the dealer who sold him his unit didn’t call to tell him about it or to let him know that the manufacturer’s warranty on his Weekend Warrior unit was no longer worth the paper it was written on.

Sixty-four-year-old Woodrow Webster was similarly stunned when he learned in late November 2007 that National RV, the maker of his 41-foot Pacifica motorhome, had gone out of business. “We drove the coach off the lot on the 28th and the company went out of business on the 30th,” he said, adding that he learned about National RV‘s demise from a friend who saw a report on the Internet. “We were really, really shocked, and really sad,” Webster said.

In the past 14 months, at least 10 RV manufacturers have gone out of business, leaving thousands of consumers without the RV manufacturer’s warranty coverage on their vehicles.

Of course, RVers who wind up in this situation aren’t necessarily as bad off as they might think because many of the individual components of the RV – such as the appliances, the chassis and certain engine components – may still be covered under separate warranties provided by the manufacturers of those components.

And, as Fetzer and Webster have since learned, owners of orphaned RVs can still purchase extended service coverage on their vehicles through independent providers. Both Fetzer and Webster purchased extended service policies through the Good Sam Club.

“We can provide some peace of mind to the owners of these vehicles,” said Tim Mackenna, sales manager for the Good Sam Club’s Continued Service Plan. In fact, Good Sam’s Continued Service Plan (CSP) – which is underwritten by Lloyds of London and QBE Europe – can be purchased on RVs under 12 years of age and 80,000 miles and renewed every year until the vehicle is 16 years old or reaches 150,000 miles.

“Our insurance is strictly for mechanical breakdowns, including drivetrain components, slideouts, power steps, engines and most all mechanical breakdowns, as opposed to being damaged in an accident,” Mackenna said.

The Good Sam Club has been contacting club members who own vehicles manufactured by now-defunct companies to let them know about the CSP insurance plan. But Mackenna suspects there are many other RV enthusiasts who are not Good Sam Club members who wouldn’t necessarily know about the CSP program or how it can benefit them.

Other extended service contract providers, such as Birmingham, Alabama-based Protective Life Corporation, which markets XtraRide extended service contracts, and Norcross, Georgia-based Automobile Protection Corporation (APCO), which markets coverage using the EasyCare brand name, are also reaching out to consumers, either through relationships they have with RV dealers or through other marketing efforts.

Some RV dealers also sell their own extended service contracts. But, as with any product, consumers need to understand what they’re buying before they sign on the dotted line.

“Vehicle service contracts do not normally cover items that an RV manufacturer would normally cover,” said Kurt Harbeke, APCO’s national RV business development manager. “In a car, the customer has one manufacturer responsible for the car’s warranty, from engine to transmission to the radio and electric seats and so on.”

In an RV, however, there can be multiple warranties involved, largely because RV manufacturers are assemblers more than actual manufacturers. “In most cases, the RV manufacturer builds the ‘house’ or ‘box’ portion and not the chassis,” Harbeke said. “Most RV manufacturers purchase the components from other manufacturers or suppliers that will supply separate ‘limited’ parts and labor warranties for each of the components. So, when an RV manufacturer closes down for whatever reason and ceases to provide an ‘RV factory warranty,’ what they are really doing is saying, ‘We will not provide warranty for what we built’ – such as side walls, roofs, floors, cabinets and all the other items that were built by the RV manufacturer. Now, in most cases that I am aware of, vehicle service contracts do not cover those items. The only items that the RV manufacturer builds that the contract might cover would be plumbing, holding tanks and wiring in some cases.”

However, extended service contracts do cover mechanical breakdowns involving the engine and other components that would not typically be covered even by specialty RV insurance. Extended service contracts can also be purchased after most other warranty coverages expire, with prices reflecting mileage and the age of the vehicle.

Mackenna said some RVers opt to purchase the Good Sam Club’s CSP coverage even when their manufacturer’s warranty is still in place. As coverages expire from the manufacturer’s warranty, CSP will pick those up, so long as they are covered components. CSP will also pay the deductible of the manufacturer warranty on a covered repair if the customer has Good Sam coverage in force.

Both Good Sam and EasyCare also sell other perks, such as roadside assistance and trip interruption insurance, which can be helpful in the event of a breakdown. 

With many options available, Harbeke said it behooves consumers to do their homework to make sure they fully understand the kind of coverage they are buying, since there may be some items that are not covered by extended service contracts.

“One of the easiest ways to see how reputable an extended service contract company is,” says Harbeke, “would be to go into an RV dealership service department and ask the service manager, ‘Do they pay claims?’ ‘Are they pretty easy to work with?’ ‘Will have any problems when I’m out traveling?”

Harbeke also said it’s worthwhile for consumers to check a company’s financial solvency. “The Internet is a great place to start. See if the company is insured by a licensed insurance carrier and see what the A.M. Best rating is for that carrier. I would suggest that they have an A or better. Check and see who else they do business with. The partners that a company has can tell you a lot. Do you know who they are?”

RVers need to be willing to take the time to check out the extended service contract providers that are of interest to them. Sometimes, Harbeke said, that can be done simply by calling them on the phone. “Check and see how easy it is to speak with someone at the company. Can you even get to a person? If the customer has problems trying to contact the company while they are home where they are safe and comfortable, how easy will it be when they are broken down on the side of the road needing help?”

While this may sound like a lot of work initially, it can pay off in the long run.

Webster and Fetzer, for their part, say they are relieved to have their vehicles under extended service warranty with a company they trust. Fetzer paid $750 for a three-year policy covering his Weekend Warrior fifth-wheel. “I’m not one to buy extended warranties,” he said. “But this is a small price to pay for peace of mind with a vehicle.”

Webster, for his part, says he hasn’t had any trouble with his 41-foot National RV Pacifica, but he likes having extended service coverage just in case. “If your coach is one that was made by a manufacturer that is now defunct, I would say it is absolutely, positively something you should invest in,” he said.

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