Owning a home is a huge financial feat, but the goalposts seem to keep moving further and further out of reach. According to Bankrate’s Home Price Report, 78% of Americans consider homeownership to be part of the American Dream, which is higher than other goals such as being able to retire or have a successful career. That was more than the number of people who thought the same way. The same survey found that more than half (56%) of people who don’t own a home cite a lack of income as a reason for not owning a home.
#Vanlife has emerged as an adventurous alternative (or addition, depending on your financial situation) to owning a home. From 2020 to 2022, the number of vanlifers increased from 1.9 million to 3.1 million. Modifying your van isn’t cheap, and depending on how much you cheat, it can have a big impact on your insurance. Bankrate’s team of insurance experts, including licensed agents, will tell you exactly what you need to know about insuring your converted van.
#What is vanlife?
Van life is the practice of converting a Class B van, such as a Mercedes Sprinter or Ford Transit, into a comfortable living space. Vanlifers typically equip their vans with sleeping quarters, living space, a kitchen, and plumbing. Some vanlifers take their cars to professional modification shops, while others do the modifications themselves.
Van insurance: what not to do
Don’t just add your Vehicle Identification Number (VIN) to your current policy.
“The biggest mistake people make is adding a van to their auto insurance policy,” says Mike M., owner of an insurance agency that specializes in van conversion insurance. “If you modify[your van]and insure it as a regular vehicle, not only will you pay more, you are guaranteed to have less coverage because of the modification.”
Let’s go back a little bit. If you’re buying a van to convert into a mobile living space, there are two different ways to insure it when it’s empty than when it’s fully converted. There are a few different reasons for this, one of which is the value of the van.
Adding accessories such as sinks, kitchens, and sleeping areas usually increases the value of your van. Also, when it comes to car insurance, it’s important that you and the insurance company are on the same page about the value of your car. That way, if you get into an accident and your van is a total loss, you can get back the actual value of your van, including replacements and everything else.
example
Let’s say you buy a new Ford Transit for $55,000 and add it to your insurance policy for full coverage. He then spends $100,000 to convert it into a livable van, but doesn’t change the insurance policy. A few weeks later, you get into an accident and your van is destroyed. When you file a claim with your insurance company, you may only be paid the actual cash value of the van itself (minus your deductible) and will not take into account the amount you spent to cash out the van. That payment would be:
$55,000 (vehicle price) – $5,500 (depreciation) – $1,000 (insurance deduction) = $48,500
Don’t assume your current transport company knows how to insure your van
Another common mistake, according to Mike M., is assuming that your current auto insurance company knows how to insure a converted van. “There are very few people who do that,” he said in an interview with Bankrate.
Van conversions have been around since the 1970s, but have become increasingly popular in recent years. This is partly due to the coronavirus disease (COVID-19) pandemic. When travel options were limited, many people chose the nomadic route of living in a van. Van Living also has an attractive reputation on Instagram, making it an attractive option for the socially savvy.
Van living is not a new concept, but elaborate van modifications are important, at least to insurance companies. “Just like when ride-sharing, Uber, Lyft, all that stuff came out, insurance companies are trying to figure out how to do it,” said Hadassah Falbee, an insurance agent at Coverage (part of Red Ventures, Bankrate’s parent company). I didn’t know that.” To deal with it. ”
As an industry, the insurance industry has been very slow to react. While some specialty insurers, such as Roamly and Good Sam, have emerged to fill the gap in the market, large, name-brand insurers are still playing catch-up.
The biggest challenge is which companies will do it. The second question is how to do it correctly.
— Mike M.
insurance agency owner
If possible, try to leave the conversion part to the experts
Conversions to a van typically involve adding plumbing, cooking space, and living space. Although you technically can do it yourself, it’s best to leave the conversion part to a professional for insurance purposes. There are two reasons for this, one of which is the value of the van.
Dave Walsh, owner of Van Life Customs, a van conversion shop in Colorado, said in his experience converting vans, most people are surprised at how complex the insurance process can be. I know how to take care of these things. ”
If you go through a professional conversion company, you can show your insurance company an invoice or proof of the amount you spent on converting your van. Depending on the build you choose, a full van conversion costs between $90,000 and $180,000 on average. It may still be difficult to get your insurance company to properly value your van, but what you want from a van conversion company is better than a long list of receipts listing all the items you bought to convert your van. It is easier to present some documents.
Not only will DIY modifications make it more difficult to show your insurance company that your van is worth what it says it is, you may also be denied coverage. “If something goes wrong and it happens to you, there’s a good chance the insurance company will say, ‘Look, it was your mistake, so we’re not actually going to cover you.'” Falby says. Getting a quote from a professional conversion company may come as a shock, but it could help you avoid insurance headaches in the future.
How to insure the van you live in
The step-by-step process can vary depending on the extent of your van’s modification. However, the steps below will help point you in the right direction on how to get insurance.
Change the title of your converted van to RV, depending on your state
It may be easier to get RV insurance for a converted van than super-customized car insurance. The title change process varies by state law, so a good first step is to check your state’s Department of Transportation (or equivalent) website. For vans like the Mercedes Sprinter and Ford Transit, see instructions on how to retitle them as Class B RVs.
Find an RV or van insurance company
Not all car insurance companies know how to insure full value on van modifications. There is no guarantee that the companies listed below will agree to insure your van, but they tend to be more experienced in writing insurance policies. You may want to get a quote from one (or several) of the following auto insurance companies:
- wanderingly
- good sam
- progressive
- national general
- front line
Comply with your state’s minimum auto insurance laws
Even if you live in your van full-time, you’ll need an address for vehicle registration and insurance. Make sure your insurance meets your state’s minimum auto insurance laws.
Live-in van insurance coverage
What makes residential conversion van insurance so complicated is that different parts of the insurance are in effect when the van is being driven and when it is parked. To adequately insure your converted van, think of adding coverage similar to home and auto insurance. When purchasing van conversion insurance, be sure to familiarize yourself with the following coverage types:
When parking:
- vacation responsibility: If you live in your van for less than six months of the year, a vacation liability endorsement can help with potential litigation. It may be easier to understand if you think of it in the same way as the liability section of a home insurance contract. If someone is injured while your car is parked and you are sued for their injuries, vacation liability coverage can help pay for some of your legal costs.
- full time responsibility: This is similar to vacation liability, but for vanlifers who live in their cars for more than six months of the year.
- Payment of medical expenses: Also called guest medical coverage. For example, let’s say a guest slips and falls but doesn’t decide to sue you. Medical expense coverage can cover their medical expenses.
- personal belongings: Financially protect what you store in your van, such as your clothes, laptop, and other belongings.
- Scheduled personal property: Personal items endorsements may not fully cover more expensive items. Scheduled personal property endorsements can help cover high-value items.
- Customized parts and equipment: We’ll cover more of the special parts we’ve added to your van conversion.
- loss assessment: If your van is parked in an RV community with shared structures, you may be able to receive assistance with charges from the RV association for shared losses, such as if a storm damages a shared shower structure.
- adjacent structures: Adjacent structures can help cover things like decks and awnings, as well as other structures (Coverage B) in your home insurance policy.
- Rodent and pest protection: Additional cover if your van is damaged by rats or other pests.
- emergency expenses: Similar to Home Insurance’s Additional Living Expenses (Coverage E), it helps with hotel and restaurant costs if your van becomes uninhabitable due to a covered loss.
- agreed value: If the van is a total loss, the insurance company can pay a pre-set amount for the determined value of the vehicle.
When driving:
- personal injury liability: If you are at fault for the accident, this coverage will pay for the other driver’s medical bills and other expenses up to your policy limits.
- Property damage liability: We’ll pay for repairs to the other driver’s vehicle, up to your insurance limits, if you’re at fault.
- Comprehensive coverage: Also known as “non-collision coverage,” this coverage helps if your vehicle is stolen, damaged by weather, or collided with an animal.
- Collision coverage: If you were at fault for the accident, we can help repair your van.
- Road service: This is useful if you have a flat tire, need a tow, or run out of gas, to name a few scenarios.
