Mobile Home Insurance

Mobile homes are handled a little differently than site-built homes by insurance companies because they are not built onto a foundation. Modular homes, on the other hand, are typically treated more like traditional homes when it comes to buying insurance.

No matter it’s construction, your home is important to you and your family and is likely your biggest asset. To protect this major investment, make sure you have the right coverage for your needs and budget.

What Are Mobile, Manufactured or Modular Homes?

For most purposes, the terms “mobile home” and “manufactured home” are interchangeable. A manufactured home is essentially the modern term used for mobile homes. The terminology changed when new HUD building code standards for mobile homes went into effect in the 1970s. A manufactured home is the same type of structure but with HUD-regulated design and safety features. A manufactured home is a single-family dwelling that is factory built and then transported to the residence location.

Depending on the insurance company, a “modular” home can be classified as a form of manufactured home or as a site-built home. A modular home is assembled in sections in a factory setting, then constructed on a foundation like a traditional site-built home.

Why Are Manufactured or Modular Homes Classified Differently?

Site-built homes generally tend to increase in value over the life of a 15- or 30-year mortgage. Manufactured or modular homes, however, generally decline in value over time, which makes them more like vehicles in the eyes of insurance companies. This major difference in the value of the home affects the cost of mobile or manufactured home insurance.

What Are the Risks with Manufactured Homes?

Besides the differences in valuation over time, mobile and manufactured homes also have different levels of risk than site-built homes. For example, mobile and manufactured homes tend to have a greater risk for theft.

There is also increased risk for damage due to weather, as manufactured structures are typically not built onto a foundation (modular homes are an exception). Additionally, the building materials tend to be lighter weight than site-built homes and they are statistically riskier for fire damage.

Because manufactured homes are built in a factory and then transported, they can have structural integrity issues. A 2007 American Housing survey of 6.9 million manufactured homes reported that over 300,000 of these homes had sagging roofs, 180,000 had sloping outside walls, and 98,000 had foundations with visible cracks or crumbling.

In addition to these risks, according to the Centers for Disease Control, mobile and manufactured homes can experience increased health and safety risks.

Your mobile, manufactured, or modular home is likely perfectly safe - but your insurance company carefully measures the risks you face in your home when they issue you a policy. You can speak to an Insurance Station agent to make sure you're doing all you can to keep your home safe and reduce your risks, which can potentially earn you discounts on your coverage.

How Much Manufactured Home Insurance Do I Need?

Like site-built homes, mobile and manufactured home insurance comes with several types of coverage, including:
• Property damage coverage to protect your home investment in the event of a natural disaster or home fire.
• Liability insurance to protect you financially in the event that someone is injured in your home or on your premises and files a claim or lawsuit.
• Contents coverage to protect your investment in your personal property within your home.

The amount of coverage you need depends on several factors including the value of your home, belongings and the personal assets you want to protect. It is a good idea to take the time to evaluate the replacement cost of your home and belongings as a starting place for how much coverage you will need.

An Insurance Station agent can meet with you and help assess the amount and types of coverage that are appropriate for you.

Actual Cash Value or Replacement Cost Coverage?

One of the factors to consider when finding insurance for your home is to determine how you want to be compensated in the event of a loss. There are two ways:
• Actual cash value: The value of the structure in the current market, which takes into account depreciation
• Replacement cost value: The amount that it would cost to rebuild the structure to its original condition with similar materials

As manufactured homes generally depreciate over time, the actual cash value will typically be less than the replacement cost. Replacement cost coverage can protect you from having to pay the cost of replacing or repairing your home out of pocket in the event of a loss. Consult with one of our agents for help choosing the best type of coverage for your situation and assets.