RV Demographics Shift Gears; Insurance Rates Are Close Behind

As temperatures finally start to climb and school lets out for the summer, Americans are gearing up for one of their favorite times of the year: RV season.

Ariel Menkin, RV product manager, Progressive, says peak RV season typically extends from spring through mid-September, which means many of your personal lines clients probably have a camping or road trip coming up on their calendars soon.

After another record year for RV sales—more than half a million shipped in 2017, “which is a number we’ve never reached in the history of the industry,” Menkin notes—the booming RV industry isn’t slowing down.

Just don’t expect the same type of person behind every wheel.

Steven Preston, national lead for RV product at Foremost, observes “a shift from the baby boomers to the millennials” among RV owners.

“We see a lot of younger families with younger children entering the market,” agrees Menkin, who notes that around 40% of RV owners have kids under the age of 18. “It used to be more retirees. They’re still buying RVs, but they’re not the only ones now.”

Brook McGuire, strategy lead for specialty products at Safeco, says the shift mirrors what’s happening in the motorcycle market: “RVs are starting to appeal to a younger, hipper millennial generation. Instead of the typical motorhomes and fifth-wheel setups, we’re seeing lots of pull-behinds that are designed to be more attractive to the eco-conscious, price-conscious millennial.”

That’s especially relevant as demand for lighter trucks begins to outpace demand for more heavy-duty models, says Deb Gravish, RV product manager at Foremost. Many lighter, more maneuverable SUVs and pickup trucks come with a hitch—and whether your younger client doesn’t have the requisite experience or they simply “don’t want to spend a whole lot of money on a 550 or something similar, RV dealers are moving a lot more of the ultra-light shorter units that can be towed by these lighter trucks,” she explains.

But with widespread appeal comes underwriting consequences. With so many people “getting into RVs for the first time,” Menkin points out, “those first-time users aren’t always as experienced in operating such long and big vehicles.”

As more and more RVers vie for space, that’s a recipe for increased claims frequency. “I don’t know if you’ve tried to reserve a spot on a campground anytime lately, but sometimes you need to reserve your spot more than a year in advance,” Menkin says. “RV manufacturing and shipments may be up, but it’s the same number of campgrounds out there, and those aren’t growing very fast. That means it’s really crowded, and there are just more things to bump into.”

In addition to frequency, severity is up as well. Just like in personal auto, McGuire says you can blame “more technology in the RVs, more highway miles, higher speeds, distracted driving—all of that is having an impact.”

Plus, with a shortage of RV technicians, “RV body shops are really having a hard time keeping up with the volume,” Menkin adds. “That means not only is it taking longer to fix RVs, but those repairs are also becoming more expensive.”

Rate hikes won’t be drastic, but throw in lower gas prices and an improving economy, and all of the above adds up to “higher collision rates and likelihood of accidents,” Preston says. “That’s going to drive increases in the area of collision pricing.”

Jacquelyn Connelly is IA senior editor.