What Are RV Extended Warranties?
Technically, extended warranties aren’t actually warranties. They are service contracts. Warranties are included in the purchase price of whatever you buy. Service contracts are added on as a separate purchasable item. However, since it is part of the nomenclature of the industry, we will still refer to these RV service contracts as RV extended warranties.
Should You Buy an RV Extended Warranty?
Let’s just get this out of the way before we go into the details. No, you probably shouldn’t, but it might still be worth it in some cases. According to Dave Ramsey, the financial superstar, extended warranties are likely to cost much more than the service that they provide. In this linked video, he was discussing cars, but the logic carries over to RVs.
If you think through it, it will become quite obvious. A company that sells extended warranties must make a profit, and these companies have some expensive operational costs:
- The calculated average cost of repairs for your type of RV
- Employee salaries and wages
- Salesman commission which is around 40% for car salesman
- And potentially, the cost of their very spendy insurance
In the end, extended warranties are expected to pay for all of these expenses and still make a profit. In the car industry, the service contract is expected to cost six times the average of that specific car’s repair costs. We realize that the numbers will not translate perfectly into the RV industry. RV’s are far less durable than robotically manufactured cars. Even with that being the case, the logic will remain consistent. For their business model to work, on average, the company must make a profit. That means you, on average, must pay more than you would have.
Why An Extended Warranty Might Be Worth It
Sometimes, the best decision isn’t as obvious as it might first appear. This is especially true in situations of chance. In Decision Theory, there is a concept known as Maximin. Rather than taking a gamble and testing your luck, some would recommend that you prepare for the worst possible outcome.
A service contract might not pay for itself. In fact, it is likely not to pay for itself. However, it is all a game of chance, and every new RV owner will have their own roll the dice. Purchasing the service contract will limit the worst possible outcomes because they cover the worst-case scenario items. You will probably lose money, but you heavily mitigate the financial strain of unexpected breakdowns.
The Odds and Costs of Major Repairs
Those unexpected breakdowns are an inevitability, so maybe they aren’t so unexpected. You’ve probably seen the warranty claim statistics because they show up in a lot of discussions.
- 30% of RVs will require a major repair in their 2nd year
- 80% of RVs will require a major repair by their 5th year
- Nearly 100% will require a major repair by their 8th year
With those odds, even if the warranty doesn’t pay for itself, you are still likely to recoup some of the costs. Those costs can be substantial. The average $300 per hour for parts and labor can put a dent into most monthly budgets. Even a small issue can be spendy at those prices. This number can shift both higher and lower depending on the price and rarity of the RV.
Statistically speaking, those repairs will likely be either the air conditioner, a slideout, the leveling jacks, generator, or the inverter. None of them are cheap, but they also aren’t likely to single-handedly pay for the extended warranty.
What’s Your Peace of Mind Worth?
Will your worrying about unexpected expenses detract from your enjoyment of the RV? The decision to buy a service contract doesn’t need to be purely financial. Worriers worry. It’s a bad habit that can be difficult to stop. If purchasing this bit of security will ease your mind, maybe you should just go ahead to buy it.
Don’t Accept The Offer Shop Around for an Extended Warranty
If you do decide to purchase an extended warranty, research all of your options before committing to anything. Many dealers will try to sell you on an extended warranty, but you do not need to purchase one through the dealer. Most of these warranty companies will be happy to work with you provided that you meet their minimum qualifications:
- Your RV can’t be too old. Typically, the maximum age is somewhere between 10 and 15 years old.
- Your RV can’t have too many miles on it. Usually, this maximum will fall somewhere around 80,000 miles.
Definition of the Parties Involved
Before going even further, we should clarify some of the people involved in this transaction. When you buy a service contract from a dealer, there are usually three other entities involved.
- Contract Provider: This is the company that is selling you the contract and calculating its costs. It might be the manufacturer, but it could also be the dealer or a third-party company that offers service contracts.
- Administrator: This is the company that foots the bill if you bring in your RV for service contract work. Since they bare the responsibility of covering the costs, they are also the party that makes the most money off of the contract. They are also the party that gives the final approval over the contract made between the contract provider and the buyer.
- Insurance Company: Some administrators back up their extended warranties with an insurance company. Sometimes administrators are unable to cover the costs of repairs. Backing up the policy with an insurance company is a way of guaranteeing that the costs of the repair work will be covered.
Risk Retention Groups Vs Fully Insured Warranty Providers
It is important to research the administrator. The price of an extended warranty can vary quite a bit. When you come across an exceptionally cheap warranty, it is likely to be provided by a Risk Retention Group. They are cheaper, but they also come with a much greater risk.
Claims Reserve Account
When you make the payment to purchase your service contract, a portion of that money is placed into a claims reserve account. If you need money to pay for a repair, money is pulled from this account to pay for it. Both risk retention groups and insured warranty providers have these accounts.
Unlike the insured policies, if an RRG doesn’t have the money to cover the costs, you will pay for the repairs. Also, an insured provider is required to fulfill several risk-limiting regulations that a risk retention group is under no obligation to follow. While this does limit the cost, it can increase the risk of the group crumbling under lousy management. Finally, RRGs do not usually have the same staff and resources as an insured administrator would be able to provide.
What Do RV Extended Warranties Actually Cover?
This is a significant point of differentiation between regular RV Warranties and a service contract. Basic RV warranties mostly cover everything defective due to problems from the manufacturing process. There are many additional exclusions, but that is the primary focus of the warranty.
RV extended warranties cover expensive items that break on the RV: water, waste system, and propane systems, refrigerators, electronics, etc. Much of the time, these are items that have their own separate warranties. Check into those before deciding on the necessity of a service contract.
What Do Extended Warranties Not Cover?
For clarification purposes, here are some of the items that are not covered in service contracts:
- Any problems that existed before it was purchased
- Cosmetic issues
- Maintenance items
- Roadside assistance unless specified
- Natural deterioration due to elements or poor maintenance
- Consequential Damage: If an item not under warranty damages one that is under warranty. The repairs will not be covered.
- In most contracts, the warranty will be void if used for business purposes. Ergo, they might not cover anything if you rent them out or title them under a business. Be careful with that one.
Finding the Right Extended Warranty
When looking through the extended warranty options, the goals are to maximize the benefits, minimize the risks, and minimize the costs. To accomplish these goals, we must be aware of the many important aspects.
If you would prefer to skip ahead, we discuss a few extended warranties that deserve some extra attention. A couple for good reasons, and one that you should absolutely avoid.
How to Get the Best Price
These are not flat-rate services. They are calculations of risk. Knowing the factors that go into this calculation enables you to position yourself for a better deal.
- Extended Warranties become more expensive as the RV ages.
- The extended warranty will not actively cover any components already being covered by another warranty. This is factored into the quoted price.
- As RVs age, components are more likely to need repairs. The added risk will translate into a more expensive contract.
- You do not need to buy it from a dealer. Shop around for a better policy.
- If possible, purchase the extended warranty before the basic warranty expires. It will make the application process easier and maybe even cheaper.
- On January 1st, your RV is classified as one year older. This will affect the quoted price. Keep that in mind if you are shopping close to the end of the year.
Low Deductibles Only or Don’t Bother
We don’t recommend this, but one way to keep the costs down is to have a higher deductible. High deductibles make most extended warranties mostly useless aside from the most expensive repairs. The only way that you are going to recoup your costs will be on the repairs, and limiting that means that you will not get your money’s worth from the policy.
If it is tempting you, consider purchasing Catastrophic Coverage instead of the standard exclusionary contract. It only covers the big ticket items and it is quite a bit cheaper. We briefly go over the contract types in the table below.
Do Not Combine With RV Financing
Working the cost of a service contract into your RV’s financing is a bad idea. It becomes an even worse idea if an RV loan stretches for many years. The economical value of a service contract is hard to justify, but the long-term interest from a loan makes it almost impossible.
Extended Warranty Payment Plans
If you want the contract and can’t afford paying for it upfront, you might be interested to know that some administrators offer payment plans. It’s a better alternative to mixing it in with the RV financing since it won’t accrue decades of interest.
Getting the Right Coverage
Sometimes, it isn’t the wise move to get as much coverage as you can. Situationally dependent, it might be better to make a sacrifice in coverage. It will mostly depend on you, your skills with a toolset, and what risks you are willing to take.
When determining your level of coverage, you will need to decide between four types of contracts: Exclusionary, Listed Component, Coach Only, and Catastrophic.
|Warranty Type||Description||Relative Expense||Relative Coverage||What RVs Are Eligible?|
|Exclusionary Contract||Exclusionary contracts cover everything except components specifically listed as not being covered. It is commonly called bumper-to-bumper coverage, but that is a misnomer.||This is the most expensive service contract.||Most of the time, this will offer the best coverage.||Eligibility will vary. Generally, RVs 10 to 15 years and younger will be eligible.|
|Listed Component Coverage (Inclusionary)||This is the opposite of the exclusionary contract. If the component isn’t listed, it isn’t covered. It might seem counterintuitive, but it is easier to determine what is covered in the exclusionary type of contract.||Less expensive than Exclusionary; more expensive than everything else.||Varied due to personal selections, but generally moderate coverage||Older RVs are more likely to be covered by this type of policy.|
|Coach Only Contract||This contract excludes the major motorized components: steering systems, engine, transmission, and the drive axle are not covered.||Less expensive than Exclusionary and Component||Targeted coverage of non-motorized components. This will be useful for any components that make the RV a home.||Very likely to cover older RVs with high mileage.|
|Catastrophic Coverage||This option is perfect for people handy with a toolset, but aren’t equipped to tackle the disaster issues.||Typically, this is going to be the cheapest option||Targeted coverage of motorized components. This will not be useful for most repairs, but it will cover anything that makes the RV a vehicle:||Very likely to cover older RVs.|
Sometimes additional coverages can be purchased if you need specific components added to the contract.
Customer Service is typically lacking in this segment of the RV industry. If you purchased the contract from a dealer, there is a decent chance that they will provide very little assistance. Do some research into experiences from other customers. Finding a dealer (contract provider) that will act as a mediator can go a long way when the warranty’s administrator doesn’t want to dip into the claims reserve account.
Where Can You Get Repairs?
Some contracts require you to take your RV to specific service centers. If your traveling and something breaks down, this could cause you some significant issues. It might not be a problem, but you should look into it before signing the contract.
Daily Stipend During Repairs
Some policies have a wonderful benefit of paying a daily stipend. If you’re getting repairs while full-timing or on a trip, the “out of house” costs can really stack up quickly. It won’t be much, but it’s usually enough to get a decent hotel.
Unfortunately, a lot of extended warranties are drifting away from this practice, so it is becoming more difficult to find. If you want this type of coverage, you can still find it through roadside plans.
If the deductibles are in the $500 to $1,000 range, you should put the contract down and go somewhere else. That extended warranty is almost worthless. It might be cheaper, but it won’t cover much.
Pay special attention to the wording. It will obviously make a significant difference if the deductible is applied on a per-item basis versus once per visit. Only get the policies that have per-visit deductibles. Per-item policies can leave you paying for a sizable bill that is technically covered by the policy.
How Do They Pay the Claims?
Does the administrator pay the full retail price of the parts used in the repairs? You don’t want to be stuck with the rest of the cost.
Does the administrator pay the repair facility directly, or does the administrator reimburse you after you pay it? You probably shouldn’t sign a service contract that requires you to pay out of pocket. It’s just asking for trouble. Of course, it’s up to you.
Does the administrator pay by a company credit card or a check? This can affect the speed of the repairs. It isn’t necessarily a big issue, but it can hold you up for a couple of days.
Are RV Extended Warranties Transferable?
It’s a great selling point if you ever decide to get rid of your RV. It’s very reassuring for any potential buyers.
What Is the Cancellation Policy?
Many extended warranties give prorated refunds. If canceled quickly enough, within 30 or 60 days, they will sometimes give full refunds.
If the extended warranty has already paid for any claims, that will reduce the potential refund. Also, there will likely be fees associated with the cancellation.
Pre-existing Conditions Are Not Covered
Much like medical insurance, pre-existing conditions will not be covered. Because of this, you will likely need to take your RV through an inspection process. If you are still under the original warranty, it can sometimes allow you to skip the inspection process. If you purchase the RV and the contract together, you’ll almost definitely be able to skip it. These inspections can cost up to around $450
Keep Maintenance Records
Anyone familiar with basic RV warranties will know to keep records of all maintenance. It is quite commonly a requirement to remain covered by the warranty, especially where seals are concerned. Companies don’t want to pay your bills. If you keep incomplete records, many companies will take advantage of that.
Get Authorization Before Repair Work Begins
This is your responsibility. If you fail to get authorization ahead of time, the bill might be your responsibility too. This process can be made much easier if you choose a repair facility that employs staff that specializes in processing warranty work. This will have the positive effect of increasing your chances of the warranty’s administrator approving the claim.
RV Warranties Reviewed
There is a lot of heated discussion on the internet. Every opinion has its opposite, so determining the truth can be challenging. We understand that some of you will have experiences that conflict with our research. That said, we believe that we have a good handle on the layout, and we would like to share what we have found with you. Without further ado, let’s take a closer look at a few administrators that we believe deserve some special attention.
*More Details Below Chart*
|Administrator||Policy||Typical Negotiated Price||Coverage||Customer Service|
|Good Sam||Good Sam Extended Service Plan||Bad||Neutral||Bad|
|Wholesale Warranties (White Label)||Viking Protection Plan||Good||Good||Good|
|Protective Asset Protection||XtraRide||Neutral to Good||Good||Good|
Good Sam – A Highlight For All the Wrong Reasons
Good Sam, owned by Camping World, is a blight on the RV industry. Sounds harsh, doesn’t it? It’s deserved. No, nobody here has been personally hurt through any overpriced and misleading transactions with Camping World, but many people have. The YouTube Channel/Podcast, The RV Show USA, has done some extensive reporting on the scammy nature of this company’s sales policies. Here’s a link to those videos.
On the website, PissedConsumer, you will find an endless source of bad reviews. Part of this is due to the nature of the website, but you will find a strong correlation within forums that back up the consistently bad customer experiences discussed on this website.
They’ve earned a very bad reputation, and it is catching up with them. In 2018, their stock was valued at a high of about $46. Over the last two years, it has dropped to a much lower value of $16. At the time of this article, the Coronavirus has temporarily shut down the world. As a result, Camping World is sitting at $3.89. However, they can’t really be blamed for that one. The point is that they are on a significant downward trend due to their misleading practices.
On the positive side, an A-rated insurance company backs the Good Sam extended warranty. If they can’t afford the cost of the repairs and declare bankruptcy, you will still be covered.
Good Benefits on Paper
Okay, the warning has been given. Now onto the details of the warranty. On paper, the benefits look pretty good:
- The deductible only needs to be paid once per visit and not once per item.
- You can get a 100% refund if you cancel within 30 days.
- You can get a pro-rated refund for the contract after 30 days.
- It can be a bit confusing. If you need help, RV Show USA does give a step-by-step tutorial on how to attain a refund.
- You can go to any repair facility, and that is great. They also have a Preferred Provider Network, which supposedly gives you a 10% discount. Using this network will also give you a 90-day warranty on parts and labor that aren’t covered by the warranty.
Some administrators are willing to create a contract directly with the RV owners, and some work exclusively through the dealerships. Good Sam works through dealerships, which means that there will be a commission fee inflating the price of the contract.
If you do decide to go with Good Sam, you should shop around first. Gathering quotes from other contract providers will give you leverage that will help you to get the best possible deal. Extended warranties are negotiable contracts, and the administrators and contract providers are generally willing to bargain.
Viking Protection Plan Through Wholesale Warranties
Note: We do not receive any commission from Wholesale Warranties. The stark contrast in this report regarding Camper World and Wholesale Warranties is due to research and isn’t financially motivated.
On the other end of the spectrum, you have Wholesale Warranties. They are an independent broker that will act as your contract provider, not the administrator. Their customer service has been noted to be good, and their white label warranty coverage to be adequate and fair.
Just in case you are not familiar with the term, white labeling means they aren’t really providing the service. It has their name on it, but it is really some other company working as an administrator that is allowing its service to relabeled under the Wholesale Warranties’ brand. It sounds a bit sneaky, but it is a common business practice. The important thing is whether the service is good or not.
Benefits of the Viking Protection Plan
*Not Available in California*
The Viking Protection Plan is Wholesale Warranties’ white-label service contract. It has a similar list of benefits to the Good Sam policy, but the customers appear to be much happier with the product. Keep in mind that these benefits don’t apply to all service contracts on their website. This is specifically a list that applies to the Viking Protection Plan:
- Backed by an A-rated Insurance Company
- Deductibles are charged on a per-visit basis
- Covers both parts and labor
- You can both transfer and cancel the contract
- You can attain repairs from any facility
- They sell to both the USA and Canada
- Pay repair facilities with a corporate credit card. Typically, this can mean same-day payment
- Covers both consequential damage and commercial use
Their prices are a highlight since they consistently beat quotes from other contract providers. As the name implies, this company does not mark up the costs of their contracts. They have a lot of buying power thanks to the internet, and they’ve used that power to attain what they claim is wholesale pricing. It seems to be true or close to it.
Positive Feedback on Review Sites
They are trustworthy. Both the contract provider and the administrator have A+ ratings on the BBB website. This good standing extends to the PissedConsumer website. They provide many service contracts, and to have such minimal bad feedback is fantastic.
Works as a Mediator
They also have a reputation for working as an intermediary between whatever administrator you choose and you. This is an outstanding quality that can get forgotten amidst the financial talk. It’s great to have someone ready to go to bat for you, and that seems to be Wholesale Warranties.
XtraRide through Protective Asset Protection
XtraRide is a very popular choice. They are primarily sold through Protective Asset Protection, but they do also work through contract providers such as Wholesale Warranties. Their extended warranty has a reputation for adequately covering their consistently happy customers.
Smooth Processing with Consumer and Repairs Shops
In several forums, a repeating message appears. Apparently, processing claims is very easy, and the repair shops have a strong preference for XtraRide. The payments are often issued without delay, and they give very little trouble to the consumer and the repair facility.
- Both exclusionary coverage (comprehensive) and named component coverage (cheaper) are available
- Covers motorhomes up to 13 model years old
- Low per-visit deductibles
- Backed by A-rated insurance company
- Can transfer and cancel the policy
- Roadside assistance
- Travel expenses
- Rental Vehicle
- Emergency Transportation
Consequential Failure Program
If a covered component breaks specified uncovered components, the uncovered components will be replaced.
Tire and Wheel Coverage
As an optional add-on, Protective Asset Protection also offers tire and wheel coverage. When you are traveling coast-to-coast, the chances of running across a nail or a bit of damaging debris is quite high. This additional protection against these potentials can turn a bad day into a small inconvenience. Here are some of the specifics of the coverage:
- Tire Repair: The spare tire will be used for the repair. If there isn’t a spare tire, the RV will be hauled to a nearby repair shop.
- Tire and Wheel Replacement: If the tire is irreparably damaged and the wheel un-serviceable, they will be replaced. The replacements are limited to four wheels and four tires for each separate incident.
- Covers both the Towing Vehicle and the TOAD
Conclusion on RV Extended Warranties
That’s all the information that we have researched so far. We hope that it is useful for you. If you have any tips or areas of research that you would like to see added to the article, let us know. We are always looking for ways to improve.