The world of insurance can sometimes be difficult to navigate, especially when the investment you wish to insure is something as tough to define as a DIY bus conversion. Don’t despair; specialty bus insurance providers are well-versed in the unique needs of RV conversion owners. Post-9/11, the insurance market has been experiencing rough times. Insurance companies have incurred significant losses and lack the investment capital to offset them. So, we’re seeing insurance companies retreat to lines of coverage that are the most profitable and predictable for them.
How does this affect you, the bus conversion owner? You may see certain carriers choosing not to cover RVs or bus conversions anymore, or you may find that, as with most lines of insurance these days, small claims may result in a premium increase or even a loss of coverage. Also, in many cases, rates are increasing. With all these changes in the insurance industry, now’s a good time to think about your coverage.
Where to Start
The first thing to know is that there are two different ways to purchase insurance. You can either contact the insurance companies directly or work with an insurance agent. Most insurance companies that work with agents will also write a policy for you directly. The disadvantage of this is that you have to do the legwork of calling each company for their rates and coverage options, whereas an agent will do the work for you, checking with several different insurance companies to find you the best deal and coverage for your vehicle. Insurance companies will also allow agents to offer special features they don’t offer themselves. Additionally, if problems arise during the claim process, an agent can be your advocate in dealing with the insurance company.
School Bus Conversions
With underwriting guidelines being tightened to keep losses in check, insurance companies are avoiding certain types of risk. One of the most well-known risks that most specialty bus insurance providers avoid is the school bus conversion. Very few companies will insure this type of vehicle. The main reason cited is that a school bus’s axle is generally narrower than that of a regular bus.
Thus, when the additional weight of the conversion is added, and with school buses generally sitting higher off the ground, it can result in a top-heavy vehicle, which is more susceptible to rollover accidents. Then, if you add solar panels or roof racks, the center of gravity is raised even higher. Historically, more serious accidents have occurred in school bus conversions than in regular bus conversions, to the point that many companies are no longer willing to accept this risk.
Older Bus Conversions
Buses come under additional scrutiny because so many conversions are done on older vehicles. If your bus is older than 20 years, you may be asked to have a mechanic inspect it. This confirms that the bus’s systems are up-to-date and working safely.
Pre-Conversion Buses
Since many of you buy buses you plan to convert yourself, building value in the vehicle as the months go by, you may need to insure it for physical damage before it’s converted. You’ll certainly want to have liability insurance (to pay for the other party’s injuries if you’re at fault in an accident) when transporting the bus from the dealership or place of purchase to your home or workshop. Many times, too, you will need to drive the bus to the upholstery shop or to a mechanic during the conversion process.
Unfortunately, insurance companies do not offer temporary policies for RVs. You will need to purchase an insurance policy that lasts at least six months. You can get a liability-only policy, and the cost is generally minimal. If you opt for full coverage, a bus shell policy will generally have fewer features than a regular, fully converted bus policy. You will have less personal contents coverage and lower physical damage coverage because people usually don’t carry as much stuff with them when they’re in the middle of a conversion. For even a basic policy, most insurance companies require that the seats be removed and stipulate a period of time in which the conversion must be complete, typically a year, in order to continue providing coverage.
Appraisals
Once you find a policy you like, nearly all insurance companies will require an appraisal unless you are looking for a liability-only policy. The appraisal protects both you and the insurance company by establishing the value of the vehicle up front. It is in your best interest to have the vehicle professionally appraised so the insurance company knows what it’s really worth. If you have a total loss and you don’t have an appraisal on record, it can be very difficult for the adjuster to determine what your vehicle was worth, since it was a one-of-a-kind custom conversion.
With a basic Actual Cash Value policy, the appraised value will serve as a starting point for the adjuster if you experience a total loss. The adjuster will consider when the appraisal was done and factor in depreciation to arrive at a settlement amount. To fully protect your investment over time, check with your insurance provider to see if they offer Agreed Value Coverage. Agreed Value Coverage locks in the appraisal value, and that amount is what you’re paid if you experience a total loss with no deduction for depreciation. The appraisal will need to be updated every two to three years.
Your insurance provider should be able to refer you to a qualified appraiser or, in some cases, allow you to do a complete evaluation of your own vehicle’s condition. Your assessment can then be submitted to a valuation expert, who will search the market for comparable vehicles and, based on those and your vehicle assessment, place a value on your bus. This “self-evaluation” process allows you to have a hand in the appraisal, which makes sense because no one knows your bus better than you do.
Once you get your insurance, don’t forget to keep good records of any improvements, changes, or additions to protect you between appraisals. Additionally, you should let your insurance provider know when you make changes that alter the value of your vehicle. In a total loss, the adjuster will take your updates into consideration.
Bus conversions don’t neatly fit into one vehicle category or another; unlike manufactured motorhomes, each one is unique. That doesn’t mean you have to compromise on insurance. Specialty RV insurance providers have policies custom-made for your vehicle. When you purchase insurance, be sure you are working with a company that understands your lifestyle and your vehicle and has provided you with coverage that will amply cover your needs.
