Buying and refurbishing a van or bus for recreational purposes can be a rewarding enterprise. It can offer a level of customization and personalization in a vehicle you can't obtain from a stock vehicle. It also provides the personal satisfaction of undergoing and completing a creative project. With the rise of the tiny house movement, bus conversions are trending and modifying vans for recreational purposes is a growing phenomenon. But after all the hard work is done, and your perfect vehicle is complete, how do you insure it so it's road-legal? Here are a few pointers to guide you along the way.
Underwriting Issues. There are several challenges we run into when insuring vehicles that have been converted for recreational purposes.
- The gross weight. If you're converting a full size bus, you're going to run into issues finding coverage on a standard personal auto policy. Generally, a vehicle with a gross weight of more than 12,000 lbs will probably no longer be eligible to be insured as a private automobile and required to be insured as a commercial auto. Weight requirements will be specific to insurance company and state regulation.
- Certain modifications can also determine what coverage or policy an insurance company will offer. Removing all the seats from a bus or van will generally make the vehicle ineligible for an RV policy if the hull remains empty. However, if you install custom features like a bed, toilet, sink it could then be eligible for an RV policy, notwithstanding other eligibility requirements.
- Body style can also pose problems. For instance, a split-box body style seems to cause ambiguity among companies. Some companies will consider it a "commercial" truck, and require it to be written on a commercial policy. Others will accept it as a "personal" truck and consider writing it on a personal auto policy.
3 Possible Types of Policies. This is where things get a bit tricky because you want to balance two things: insuring your vehicle in a legal, road-worthy manner and getting appropriate, custom coverage to fit your needs. Let me summarize the three possible routes you may try to insure your converted bus or van.
- An insurance company may offer a personal auto policy to cover a converted van, again based first on gross vehicle weight. If the weight is within range of a personal vehicle, this is a reasonable route you could take to get coverage that will make your RV road worthy and satisfy state liability laws. If you have converted a full size bus, you will probably not be able to acquire a personal auto policy. The personal auto policy has the advantages of offering liability and physical coverage on the RV, but again, personal contents inside may not be adequately covered. You could rely on a homeowners or renters policy to provide protection from a major loss like fire or explosion, but theft will probably not be covered. You'll want to ask if you can find a way to endorse coverage for your belongings in your RV. Last, towing coverage may be offered for the RV on a personal auto policy but the coverage amount may not be sufficient to get the job done. A large bus or van costs more to tow than a regular car, and your personal auto policy may simply not fork out enough money for you. If that's the case, you may expect to pay a portion of the cost out of pocket
- A commercial policy may be required because of 1) gross vehicle weight, or 2) bed/box style (see above). This type of policy will provide you with liability and physical coverage, but may not provide the contents coverage you need for all your personal effects inside the RV. The commercial policy may also provide a more substantial amount of towing and roadside coverage than a personal auto policy. Remember, the cost to hitch and tow a large van or full size bus is much more expensive than towing your family sedan. The commercial policy may be more expensive than a personal auto or RV policy. If you're doing any business with the RV (such as deliveries or providing curbside services like a food truck), then you'll want to go this route and consider a commercial auto policy to protect you from liability.
- Last, an RV policy will provide liability coverage, protection for physical damage to the RV, and contents (personal effects) coverage. It may also provide roadside and towing coverage intended to accommodate and cover the costs of larger vehicles. Generally, these policies are optimal in pricing and coverage because they are built specifically for RVs, but as stated above, eligibility may be an issue. Your full size bus or larger van with a heavy gross vehicle weight may make the vehicle ineligible for an RV policy. As stated above, certain modifications may also pose a problem for insurance companies.