This guide to Manufactured Home Insurance Programs starts by noting there are 8.5 million manufactured homes in the U.S, and it is a growth market. According to U.S. Census Bureau reports, as indicated on the Freddie Mac website, manufactured homes account for 7 percent of all owner-occupied housing in the U.S. The trend is escalating as affordable housing options are increasingly in demand.
Although you often hear manufactured home insurance used interchangeably with mobile home insurance, there is an actual distinction in the terminology. HUD, which is the acronym for the U.S. Department of Housing and Urban Development, has a rule that states that factory-built homes constructed before June 15, 1976, are known as "mobile homes." Homes manufactured off-site on June 16, 1976, or later are designated as "manufactured homes."
Consumers and insurance professionals continue to use "mobile home insurance" to describe "manufactured home insurance programs." Other classifications such as prefabricated homes and tiny homes fall under mobile home insurance programs.
What is Manufactured Home Insurance & Who Needs It?
Insurance coverage for manufactured homes is nearly identical to homeowner insurance in the types of coverages included, which we will detail below. Manufactured home parts are built and assembled in factories before being transported to the home site, where crews finish the construction. By comparison, most residential structures are built from the ground up on-site. In the industry, these are known as "stick-built" homes.
Anyone who owns a manufactured home is a prospect to purchase manufactured home coverage. That's because owners of manufactured homes face the same risks as "stick-built" homeowners. The potential for losses due to damage to the home and the property associated with it. Likewise, there are liability risks if a person is injured while on the property or has their property suffer damages or losses with the cause attributable to the manufactured homeowner and property.
What does Manufactured Home Insurance Cover? (And What it Doesn't)
Before we jump into mobile home insurance coverages, you should know some reasons why it is pricier than traditional homeowner insurance. Manufactured homes are lighter per square foot, and due to construction techniques and materials, they are more likely to suffer full loss in a fire. Being lighter and moored less securely, mobile homes suffer wind damage more critically.
A typical manufactured home policy is protecting against the perils of homeownership. The manufactured home, its contents, household members’ possessions, and other structures on the site are covered. Risk protection for liabilities such as a visitor is injured on the property and property damage due to fire, hail, windstorms, severe weather, explosions, falling objects, such as tree hits, a car or a mobile home, and more are covered.
Although coverages are extensive, there is an exclusion to certain types of losses. Many are water-related, such as seepage from a water leak or nearby stream. Floods and damage from underground water sources are also exclusions. Wear and tear, mechanical breakdowns, rotting damage, damage from domestic or wild animals and insects, vandalism, nuclear hazards, and ground movement are all not insured.
Components of a Manufactured Home Insurance Program
There are many aspects to professionally administered mobile home insurance programs. The best manufactured home insurance is comprehensive. We breakdown the most common types of insurance in this manufactured home insurance program overview. Flood insurance is not available through a manufactured insurance policy. Property owners in a flood zone can get flood insurance coverage through the National Flood Insurance Program.
As it is also known, a dwelling insurance policy helps to pay the cost to rebuild or repair the manufactured home when damaged by hazards the policy covers. It also insures repair and replacement costs of other structures found on the property, including carports, outbuildings, and garages. Deductibles set by the homeowner help lower costs by self-insuring the first-out deductible amount. The policy will have a fixed maximum payout for losses it covers.
Personal property covers the policyholder's possessions in the mobile home or anywhere else where a covered damaged or stolen loss occurs. An example is covering losses when luggage and electronic devices are stolen from a car while the homeowner is on vacation. Another is a burglar breaks into your manufactured home and steals property covered under the policy. Some expensive items such as jewelry or guns need a floater policy to cover them as an addition to the Personal Property coverage. As with dwelling coverage, there is a deductible taken out before the policy begins to pay.
Guest Medical Protection
Guest medical protection is also known as medical expense coverage. It will help pay for medical services incurred by an accidentally injured guest while anywhere on the property without respect to who is at fault. This coverage is valuable because, without it, the homeowner could be hit with medical bills in a lawsuit not covered by the mobile home insurance policy's liability policy.
Owners of manufactured homes face personal liability risks that need protection. Suppose a person is injured anywhere on the property, or their personal property is damaged due to activities deemed the owner's fault. In that case, liability insurance helps to pay legal costs, settlement fees, repairing damages, and associated costs up to the policy's limits. The types of claims a liability helps to pay include covering medical expenses, lost wages, and pain and suffering of third parties injured on the property. The homeowners and their household members are not covered by liability insurance. Additional limits for liability are available for situations where the standard policy limit is inadequate to protect the insured's assets.
Typically, even the best manufactured home insurance coverages start with Actual Cash Value as the method of determining the payoff for losses. Actual Cash Value pays replacement costs after deducting the home's depreciation or and any decrease in value it might have. The Replacement Cost endorsements are optional but worth the extra cost nearly always. The endorsement covers the full replacement of damaged objects, including the entire structure in a total loss, without accounting for the depreciation that reduces the payout. If the loss is 100% and the depreciation is at 30 points lower, replacement cost coverage fills in the gap. The National Auto Dealers Association (NADA) can provide a paid, current estimate of a manufactured home's value. Independent appraisers can also assess the value of a manufactured home.
Other structures coverage protects unattached permanent structures on the property. Examples include a garden or tool shed, freestanding carport, fence, or a garage. Other Structures insurance helps to pay to repair or replace damage covered by the policy to structures other than your home.
Optional insurance add-ons
Every policy is unique in some ways. Many need additional coverage to cover the insured adequately. Earthquake, flood, and wind insurance protect against losses due to natural disasters. Scheduled Personal Property coverage for expensive items excluded from the standard policy is often appropriate. Watercraft Endorsements cover boats while on the water and in the dock. Sewer backup and inflation riders are advisable in most cases.
Manufactured Home Insurance Costs (and what factors affect the price)
Despite a wide array of variables affecting the cost of manufactured home insurance, there is a range of $300 to $1,000 annual premium for mobile home insurance. The factors in the pricing include the home's current market value and the value of its contents. The size, location, age, construction materials, and the claims and repair history are part of the valuation. Security and safety devices and who owns the land under the manufactured home site also impact insurance costs.
Best Manufactured Home Insurance Programs
When you seek markets to work with for your manufactured home insurance needs, the place to start is the Program Business directory. Use its comprehensive marketplace to find new programs or agency appointments.
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