Most RV park owners can tell you what their insurance premium is. Few can tell you exactly what that premium covers.
That gap is easy to understand. Commercial insurance policies are long, dense, and full of technical language that doesn’t always translate well into day-to-day decisions. But when something goes wrong, whether it’s a storm rolling through, a guest filing a claim, or a piece of equipment failing, the details of your policy become very real, very quickly.
What does RV park general liability insurance actually cover?
General liability (often shortened to GL) is the foundation of most RV park insurance programs. It’s designed to respond when a third party, typically a guest, vendor, or visitor, claims they were injured or had property damaged because of something tied to your operations.
Common GL claims at RV parks include:
- Slips, trips, and falls on park property
- Injuries at the pool, playground, or other amenities
- Guests being injured by trees, branches, or other natural hazards
- Damage caused by park-owned vehicles or equipment
GL is a broad coverage, but it isn’t unlimited. Policies frequently include exclusions for things like animal liability, liquor sales, and certain professional services. If your park offers amenities or services that fall outside standard recreational use, those exposures may not be picked up by GL alone.
What does RV park property insurance cover?
Property insurance protects the physical assets you own at the park. That includes buildings like clubhouses, bathhouses, and offices, but it also includes property that owners sometimes forget to list, such as:
- Storage sheds and maintenance buildings
- Electrical pedestals and power posts
- Fencing, gates, and signage
- Pavilions and pergolas
- Playground equipment
- Pool and spa equipment
The most common property issue we see isn’t the coverage itself, but inaccurate values being reported to the insurance company. As construction costs continue to rise, replacement cost values from five or ten years ago are almost always too low. When the reported values don’t match what it would actually cost to rebuild, that gap shows up as a coinsurance penalty at claim time.
What is a coinsurance penalty, and how can you avoid one?
A coinsurance penalty is one of the most misunderstood pieces of commercial property insurance. In simple terms, your insurance company expects you to insure your property to a certain percentage of its actual replacement cost, usually 80% or 90%.
This applies to partial losses specifically, but if your reported value falls short of that threshold, the insurance company will only pay a proportional share of the claim, even if the loss is smaller than your policy limit.
Here’s a quick example. Say your clubhouse would cost $500,000 to replace, but you only insured it for $250,000. If your policy requires 80% coinsurance, you’re supposed to be insured for at least $400,000. Because you’re underinsured, the insurance company can apply a penalty and pay only a portion of your claim, even on a small loss.
To demonstrate, here’s what would happen if there was a common claim like roof repair.
Roof Claim = $50,000 (penalty applies due to being at 50% coinsurance)
$250,000 (your insured amount)/$400,000 (what you should be insured for) = .625
$50,000 (claim) x .625 = $31,250 for the potential claim payout
BUT with a $5,000 deductible, now you’re left with a $26,250 check for a $50,000 roof repair.
Coinsurance penalties are one of the biggest sources of out-of-pocket expense after a claim. The good news is that they’re avoidable by reviewing your property values each year and updating them when construction or material costs shift.
What is business income coverage, and why does it matter for RV parks?
Business income coverage, sometimes called business interruption, is designed to replace the income your park loses while it’s unable to operate due to a covered loss on covered property.
Think about what happens if a storm damages your RV pedestals, clubhouse, bathhouse, or other key property. You may have to close certain sections of the park, refund reservations, or operate at reduced capacity while repairs are being made. Business income coverage is what keeps cash flowing while you’re recovering.
Most agents that don’t specialize in RV parks miss including the pedestals, or blanketing the business income, so it applies to the pedestals. This is crucial because many parks generate most of their revenue from renting out sites. If they aren’t included on the business income you might not be able to access the full limit.
For RV parks, business income matters more than many owners realize because the business depends heavily on seasonal revenue. Losing a few weeks during peak season can mean missing out on a significant portion of your annual income. A properly structured policy considers your peak season, your historical revenue patterns, and how long it might realistically take to get back to full operations.
What does extra expense coverage do?
Extra expense coverage often goes hand in hand with business income. It’s designed to pay for the additional costs you incur to keep operating, or to get back to operating, after a covered loss.
For an RV park, extra expense might cover things like:
- Renting temporary office or restroom facilities
- Bringing in portable power if the park’s electrical system is damaged
- Expedited shipping for replacement parts or equipment
- Temporary repairs to keep the park functional while permanent work is being completed
The goal of extra expense is simple. It helps you spend money to reduce a larger loss. Without it, owners are often left choosing between absorbing those costs themselves or letting the park sit idle longer than necessary.
Where are the most common coverage gaps at RV parks?
Even well-managed parks regularly have coverage gaps. The most frequent ones we see have less to do with the policy itself and more to do with what’s been missed during setup.
Some of the most common gaps include:
- Amenities left off the policy: A new pool, dog park, splash pad, or playground added after the policy was written may not be reflected in the schedule of locations or values.
- Old replacement cost values: Reported building values that haven’t been updated in several years almost always create coinsurance exposure.
- Income figures that don’t match the season: A park whose business has grown over the last few years may still have business income limits based on outdated revenue numbers.
- Operations that have expanded: Selling LP gas, adding a small store, or hosting events can introduce exposures that the original policy was never built to handle.
- Animal liability exclusions: Many policies exclude dog bite and other animal-related claims by default, which catches a lot of pet-friendly parks off guard.
Most of these gaps aren’t intentional. They happen because operations evolve faster than insurance reviews do.
Real examples of how coverage gaps show up at RV parks
To make this more concrete, here are a few scenarios we see regularly in the RV park world.
A park adds a dog park to improve the guest experience but never tells the insurance company. A few months later, a dog injures another guest in that area. Because animal liability is excluded on the policy, and the dog park itself was never added to the schedule of hazards, the park is left dealing with a claim the policy wasn’t built to respond to.
Another park adds a pool to attract more families. The pool is built to code and well-maintained, but the property value and liability rating on the policy were never updated. When a guest is injured at the pool, the claim is covered, but the park later finds out that the pool itself is significantly underinsured, leading to coinsurance issues when repairs are needed after a winter freeze.
A third park installs a new playground and adds LP gas sales as a small additional revenue stream. Neither change is communicated to the insurance company. When an LP-related incident occurs, the park learns that LP gas sales were never disclosed, and the resulting claim becomes a coverage dispute rather than a straightforward payout.
In each case, the policy didn’t fail. The information the policy was built on simply didn’t match what the park was actually doing.
How often should RV park owners review their coverage?
A good rule of thumb is to take a real look at your policy at least once a year, and any time something meaningful changes on the property. That includes adding amenities, expanding operations, taking on new revenue streams, or making improvements to existing buildings.
Annual reviews aren’t about finding cheaper insurance. They’re about making sure the policy reflects what’s actually happening at the park, so that if something does go wrong, the response from the insurance company is what you expect.
Have Questions About Your RV Park’s Coverage? Let’s Talk
RV park insurance is broader and more nuanced than most owners realize. Between general liability, property, business income, and extra expense, there’s a lot working together to protect your operation, and even more that can quietly fall through the cracks if your policy isn’t kept up to date.
If you’d like a clear breakdown of what your current policy actually covers, where the gaps might be, or how your coverage compares to where your operation is today, let’s schedule a time to talk. A short conversation now could save you a significant amount of money and stress later.
Book a time to meet with Colton and get straightforward answers about your RV park insurance.
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