When shopping for RV coverage, you’ll often come across the phrase “protection you can count on”, but what does this mean exactly? With all of the different RV extended service contracts (commonly known as and referred to in this article as extended warranties) on the market, how do you know which ones to trust?

At Wholesale Warranties, we always recommend that our customers seek out only “Fully-Insured” RV Warranties, as this is the first step in finding out if the coverage you’re purchasing is worth the paper it’s written on! A Fully-Insured RV Extended Warranty offers multiple, trustworthy layers of protection for the duration of your contract, so you can travel with peace of mind. 

You may come across options that are considerably cheaper at first glance, but can be harmful in the long run. Though they are not often explicitly publicized as such, some RV extended warranty policies are offered by Risk Retention Groups. These groups operate as warranty providers, but work differently than fully insured warranties. While the cheaper price of a Risk Retention Group policy can seem desirable in the moment, it is recommended that you be aware of the risk you are running when purchasing this type of policy.

When doing your research on RV warranties, we suggest checking out this detailed comparison of Fully-Insured Warranty Providers and Risk Retention Groups:

What is a Risk Retention Group?

When shopping for RV protection, you’ll want to be on the lookout for Risk Retention Groups, and avoid them if you can. A Risk Retention Group (RRG) is essentially owned by its policyholders, and manages the full financial risk of all covered repairs they’ve ever sold. That is, the RRG is the company paying claims. If they run out of money, or decide not to pay, no claims will be paid.

Instead, you’ll want to look for a plan backed by a reliable insurance carrier. This is also referred to as a fully-insured RV warranty. The insurance backer for the contract means that if all else fails, the seller, the administrator, and more, claims will continue to be paid for the life of your policy term via the insurance company.

The Confidence of a Fully-Insured Plan

Even further, fully-insured warranty programs, such as the policies we offer at Wholesale Warranties, must meet strict guidelines in order to be backed by an insurance provider. In addition, these Insurance backers are often large, well-established companies with proven staying power. AM Best is a great place to check the financial stability of a given insurance company. When investing in a plan, choose one held to rigorous guidelines, as these are the most likely to pay your claims in the long run.

Risk Retention Groups do not have to undergo this level of scrutiny, as they choose to be backed by private investors, dealerships, and other organizations. This allows RRG’s to offer cheaper rates, but for RV owners, these lower rates come with greater potential risk.

Difference in Service 

Due to lower business and insurance costs, Risk Retention Groups can be established with far less capital than fully-insured RV warranty providers. It is common for RRG’s to lack appropriate staff and resources needed to ensure that proper funds are being reserved to pay for your future claims. In comparison, fully-insured administrators must invest money in back-up insurance so that the business and its customer’s RV repair claims are protected.

The Importance of a State Guaranty Fund

At the end of the day, the most important thing to know about your RV warranty is the likelihood of claims being paid. Wholesale Warranties, along with other fully-insured RV warranty providers, are supported by large, well-known insurance companies. These companies even pay a sum of money to the State Guaranty Fund. Portions of premiums are paid toward this fund so that the program is backed by the government in the case that a warranty company, provider, administrator, and insurance company should go out of business. Not just a plan B, but a plan C, D and E!

On the other hand, the majority of Risk Retention Groups are not eligible to be backed by the Guaranty Fund, as they are not fully insured. If the RRG itself goes out of business, the money you have put toward protecting your RV will be lost, and no company will be held responsible to pay claims.

It’s clear that Fully-Insured RV Warranty providers and Risk Retention Groups have their differences. Just like any purchase decision, you must weigh the pros and cons of your options. Just keep in mind, like most things in life, quality is tied to cost. A plan through an RRG may be cheaper, but will it be worth the paper it’s printed on if things go south?

Interested in getting a quote for a fully-insured RV warranty you can count on? Submit your information below to work with one of our RV Warranty Specialists!

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