I read an article in the Wall Street Journal recently about Mechanical-Breakdown Insurance (MBI). The gist of the article was do you purchase one of these policies, or do you skip it? If you are not familiar with mechanical-breakdown insurance it is insurance designed to protect you from costly vehicle repair bills after any factory warranties expire.
The article I read was based on MBI for your automobile, but similar type plans are offered to protect RV owners. These plans are usually referred to as Extended Service Plans (ESP) or Extended Service Contracts. From an RV industry insider’s viewpoint I was interested in what the article had to say. I have always recommended that RV owners purchase a reputable extended service plan, considering a typical repair to an RV, say the refrigerator, can easily exceed $1,000.
An important point mentioned in the Wall Street Journal article was that MBI and ESP’s are similar in terms of what they are intended to do, but there are differences the consumer needs to be aware of. Some of these differences are:
1) Dealer and/or manufacturers can go out of business voiding the plan, whereas MBI plans are backed by insurance underwriters.
2) Dealer and/or manufacturer plans can dictate where you need to have repairs made – when you travel in your RV you need the flexibility to have repairs made close to where the breakdown occurs.
3) MBI plans are strictly regulated policies written to cover parts, labor and repairs to vehicles, whereas some service contracts are underwritten by the warranty provider themselves with limited protection built-in for the consumer.
As I delve further into the article I read that Ron Montoya, consumer-advice editor for Edmunds.com stated that Edmunds in general doesn’t recommend drivers purchase mechanical-breakdown insurance. He went on to say, “We would rather see consumers set that money aside in their own account and use it toward repairs when needed. This way, if nothing goes wrong, they have that money available for gas or anything else they want to spend it on.”
The problem I have with this advice is many folks find it difficult to set money aside for something that could potentially happen. I have a difficult time putting money aside for a Christmas fund! And at what point do you make the decision to use the money for gas or other ordinary expenses? With an extended service plan you purchase the plan you select and have peace of mind knowing you are protected.
Earlier I mentioned that I recommend RV owners purchase a reputable extended service plan for their RV. The article I read concluded by mentioning some good points folks should consider prior to purchasing mechanical-breakdown insurance. I have a similar list for RV owners to consider prior to purchasing an extended service plan. What I mean by a reputable ESP is:
1) The plan is affordable.
2) The plan is backed by a reputable insurance underwriter.
3) The plan is available to new and used RVs.
4) The plan covers parts & labor.
5) The consumer can choose the repair facility.
6) The plan is transferable without additional fees.
7) Customized plans are available and you control the plan’s duration.
These are a few important considerations to help you identify a reputable extended service plan. Additionally the plan should cover lodging and travel expenses incurred by an unexpected breakdown.
We purchase RVs to go on vacation, relax and enjoy some well deserved time off. An unexpected breakdown can be expensive, and can quickly ruin that long awaited vacation. It just makes sense to me that a good extended service plan prevents the hassles a chassis or coach related breakdown can present when you least expect it.
Mark J. Polk
RV Savvy Productions Inc DBA
RV Education 101
Visit Good Sam Emergency Roaside Assistance to read more articles like this.
Love the Good Sam ESP plan and would highly recommend it to anyone who owns and RV. We had to have our air conditioner replaced in our camper and it was only about 4 years old, but no longer coverd under the original purchase warranty. We used our Good Sam ESP policy and chose where we had the work done and only had to pay the $100 deductable of the total bill which was over $1500.00. The paperwork was a breeze and the customer service at Good Sam was outstanding! So glad we purchased this ESP plan when we purchased our camping trailer.