Mobile Home Insurance: Do You Need It?

It’s a small price to pay for peace of mind

Reviewed by Anthony BattleReviewed by Anthony Battle

Insurance for mobile and manufactured homes covers the home, your personal property, and liability claims—similar to the coverage you would find in a standard homeowners insurance policy. While you aren’t legally obligated to insure a mobile homes, mortgage lenders and mobile home communities may require coverage. Here’s a quick look at mobile home insurance—what it is, what it covers, and whether you should invest in a policy.

Key Takeaways

• Mobile home insurance covers the home, your personal property, and liability claims.
• Although you are not legally obligated to buy mobile home insurance, your mortgage company or mobile home community might require it.
• Premiums can vary depending on the home’s size, location, features, and the amount of coverage.

What Is a Mobile Home?

More than 21 million people in the U.S. live in mobile homes, aka manufactured homes, which represents approximately one out of every nine homes built every year.

In general, manufactured homes have two defining characteristics:

1. They are built in factories instead of on site.
2. They rest on a movable chassis instead of a slab, crawlspace, or basement.

Manufactured homes come in three sizes: single-wide, double-wide, and triple-wide.

Because they’re built in a controlled factory environment, manufactured homes are energy efficient. They can be easily customized with a variety of features, from vaulted ceilings and sheetrock walls to arched doorways and solid wood cabinetry.

The process of purchasing a mobile home can become complicated based on the number of options available. Mobile home dealers can help you navigate the variety of manufacturers, styles, and sizes to find a mobile home that fulfills your needs and expectations.

What’s the Difference Between a Mobile Home and a Manufactured Home?

While people use the terms mobile and manufactured interchangeably, there’s actually a notable difference. According to the U.S. Department of Housing and Urban Development (HUD), a factory-built home constructed before June 15, 1976, is considered a mobile home; anything built after that date is called a manufactured home. Despite this, the insurance industry generally still calls the product “mobile home insurance.”

Since 1976, federal construction regulations have mandated minimum construction and safety standards for mobile and manufactured homes.

Do You Need Insurance for a Mobile or Manufactured Home?

Unless your mortgage company or mobile home community requires coverage, the decision to insure your manufactured home—or not—is up to you. On average, it costs $127,250 for a new manufactured home and $86,100 for a single-section home, which consists of one long section instead of multiple sections joined together. Given that price tag, it’s recommended that you get an adequate policy to protect your home and belongings.

What Does Mobile Home Insurance Cover?

Insurance for mobile and manufactured homes is similar to the coverage offered by traditional homeowners insurance. Like typical homeowners policies, you can customize your policy by adjusting the coverage limits and adding endorsements—also called amendments or policy modifications. Manufactured home policies typically include the following basic coverage.

Physical Damage

The dwelling coverage pays for accidental physical damage to your home, belongings, and other structures, such as an attached deck or an outbuilding. Some of the covered perils may include the following:

• Fire
• Theft
• Hail
• Windstorms
• Vandalism
• Falling objects
• Sudden or accidental smoke and water damage

Loss of use coverage may also be included within the physical structure portion of the policy. Loss of use provides compensation so that you can live elsewhere while your home is repaired if your home was damaged and made uninhabitable due to a covered event.

Also note that, like regular homeowners insurance, flooding is usually not covered, meaning you’ll likely need separate flood insurance. The same holds for earthquakes and wildfires. If you’re in a high-risk zone, consider adding coverage for these natural disasters.

Personal Liability

Liability coverage helps protect you if a household member is found liable for damage to someone else’s property or if someone is injured at your home. However, it does not cover injury or illness for anyone living in the home. Claims might include medical expenses, lost wages, and pain and suffering.

The liability coverage from a standard manufactured home policy might be insufficient at protecting your financial assets. As a result, you may need additional liability insurance.

Named Perils vs. Comprehensive Policies

Your mobile home insurance may include either comprehensive or named-peril coverage. Comprehensive policies provide open perils coverage, which covers your dwelling and surrounding structures for any peril, such as a hurricane, unless it’s listed as an exclusion in the policy.

Conversely, a named perils policy covers specific causes of loss named in the policy. In other words, if a peril that’s not listed in the policy, such as a tornado, causes damage to your home, you’ll be financially responsible for paying the repairs and replacing your personal belongings.

Named peril policies can be comparatively less expensive than comprehensive policies. However, although you may save money on premiums with a named-peril policy, the added risks could outweigh the savings.

Warning

Mobile home insurance may cover water leaks in certain situations. However, most policies don’t cover damage caused by a burst pipe or water leaks if they are due to a lack of maintenance.

How Much Does Mobile Home Insurance Cost?

Just like regular homeowners insurance policies, the amount you pay for manufactured home coverage depends on numerous factors, including:

• The home’s value
• The size of the home (its square footage)
• The year it was built
• The value of your personal belongings, including collectibles
• The home’s physical address (location-based factors like severe weather, risk of floods and wildfires, crime rates, and your town’s response to these hazards all affect the cost)
• The construction materials
• Repair and renovation history
• Existing claims on your home policy
• Whether you rent or own the lot where the home is located
• The presence of safety devices in the home, such as smoke detectors, fire extinguishers, and sprinklers
• The home’s security features, such as deadbolts, burglar alarms, security gates, and fireproof safes

In addition to your home’s features, the cost will also depend on the coverage limits and deductibles you choose. Typically, you’ll pay a higher rate for more comprehensive coverage and lower deductibles and a lower rate for more basic coverage and higher deductibles. In general, you’ll pay between $700 and $1,500 to insure a manufactured home, according to TrustedChoice.com, a group of independent insurance agents.

When you shop for insurance for your manufactured home, try to find the combination of coverage and deductibles that best suits your budget and insurance needs.

Frequently Asked Questions (FAQs)

How Does Mobile Home Insurance Work?

Like traditional a homeowners insurance, mobile home insurance provides coverage for the structure, your personal property, and liability in case someone gets injured and you’re found liable.

How Much Does Mobile Home Insurance Cost?

Typically, you’ll pay between $700 and $1,500 to insure a manufactured home. It tends to cost more for comprehensive coverage. However, policies with a lower deductible will usually cost less, but you’ll have to pay out of pocket for a portion of the insurance claim.

What Types of Coverage Are Available With Mobile Home Insurance?

Mobile home insurance may provide coverage for named perils specifically listed in the policy. However, if a peril not listed in the policy causes damage, you will be financially responsible for paying the repairs. On the other hand, comprehensive policies provide open perils coverage that includes any peril unless it’s expressly excluded within the terms of the policy.

The Bottom Line

Mobile home insurance is similar to a homeowners insurance policy in that it covers the home’s structure and surrounding buildings, your personal property, and liability. It’s important to get adequate insurance for the size of your mobile home and review the policy terms for the types of coverage. The policy can cover specific named perils or provide comprehensive coverage except for those listed as excluded. Rates can vary from company to company, so be sure to compare multiple quotes to ensure you receive the coverage you want at a price you can afford.

Read the original article on Investopedia.