Fully Insured RV Warranty vs. Risk Retention Group

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. 

What’s the alternative? Well, when shopping for Extended RV Warranties, 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:

Insurance Regulation

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. 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 Warranty providers 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

When investing money in your RV Warranty, it is important to know if your claims will be paid no matter the financial state of the company you purchased from. Wholesale Warranties, along with other Fully-Insured RV Warranty providers, are supported by large, well-known Insurance Companies who 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 or administrator should go out of business. Simply put: your claims are guaranteed to be paid for the life of your warranty term.  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, and we hope that this article will help you to know which questions to ask when looking to buy a policy. In the end, it is up to each individual RVer to decide which coverage, provider, and price is right for them. Regardless of which policy you are looking to purchase, we always urge you to do as much research as possible on the RV Warranty Provider you are considering.

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!