carlosblacklockder@earthlink.net Report post Posted July 22, 2010 Because of the ecomomy and other factors, our loan balance is greater than the worth of the motorhome. In case of a loss for whatever reason, is there insurance that can be purchased to cover the difference between the actual value and the payoff amount on the loan? I contacted State Farm and all they offer is a payoff feature that is associated with the loan, and it is not insurance. Our residence insurance covers actual replacement cost to build a new house of the same type and is routinely adjusted for construction costs and inflation. What is available for motorhomes? Share this post Link to post Share on other sites
tbutler Report post Posted July 22, 2010 GMAC Insurance (Good Sam Insurance and also FMCA Insurance) has a standard policy that has a replacement provision. However, this does not pay off any balance owed on the original motor home. You would still have the outstanding debt and the insurance company may pay off a "replacement value" to the bank instead of you since the bank holds the title to the vehicle. I'm not a lawyer or an expert on this issue but I think that is the way it works. You could contact the agency that holds your loan and talk to them about the possible solutions. I know there is a form of life insurance that pays off a loan in the event of death (offered by most lenders when a loan is initiated) but I think you are looking for something different. Share this post Link to post Share on other sites
Guest Wayne77590 Report post Posted July 22, 2010 The replacement value will pay you what you paid for the coach. Since you don't own the coach until it is paid off, the financing company will get whatever is coming to them and you would get the difference. Do not confuse GAP insurance with Replacement Value insurance. GAP insurance will only pay off the balance of the loan, not the full replacement value. I found that out very directly when I totaled an MC. Good luck. Share this post Link to post Share on other sites
