What Is Manufactured Home Insurance?

What Is Manufactured Home Insurance?

Manufactured home insurance is special coverage to protect a manufactured home. Because they're constructed differently from traditional homes, manufactured homes aren't covered by standard homeowners insurance.

Manufactured homes are sometimes called mobile homes or confused with modular homes, but there's a difference.

• Manufactured homes are built in factories and placed on a wheeled chassis. When the home is put in its permanent location on land you rent or own, the chassis is removed; it can be put back in place if you need to move the home again.
• Mobile homes are manufactured homes built before June 15, 1976, when the U.S. Department of Housing and Urban Development (HUD) began regulating mobile home construction. Manufactured homes must meet stricter construction and safety standards than the mobile homes built before the HUD regulations took effect.
• Modular homes are built in sections, delivered to a building site and then assembled on a permanent foundation. They must meet the same local and state building codes as traditional homes and are covered under traditional homeowners insurance policies.

What Does Manufactured Home Insurance Cover?

Like standard homeowners insurance, manufactured home insurance generally includes four types of coverage.

1. Dwelling or structure coverage pays to repair or replace your manufactured home if it's damaged by a covered risk, including fire, smoke, hail, wind, falling objects, theft or vandalism. It may also cover attached structures such as a deck, patio or garage, but typically doesn't cover the home's foundation.
2. Personal property coverage pays to replace or repair belongings that are stolen, damaged or destroyed by a covered risk. Standard manufactured home insurance pays the actual cash value of your possessions; you can also opt for replacement cost value coverage, which pays to replace items with comparable new ones. Coverage for certain valuables, such as artwork, jewelry or collectibles, is usually limited, but you can generally buy a policy rider to add more.
3. Personal liability insurance helps cover legal costs if a visitor injured on your property sues you. It may also cover the injured person's medical expenses, lost wages or other expenses. In addition, liability coverage usually pays for damage your family members cause outside your home to other people or property, such as your child breaking a neighbor's window.
4. Loss of use coverage (also called additional living expense, or ALE, coverage) reimburses the cost of living elsewhere if your mobile home is unlivable during covered repairs. If a hurricane tears your home's roof off, for instance, ALE insurance helps pay for you to stay in a hotel or apartment until the roof is fixed and your home is habitable again.

Mobile home insurance typically doesn't cover damage from floods, earthquakes, sinkholes or mudslides; some types of water damage may be excluded too. If these risks are common where you live, consider buying separate policies for them.

How Much Does Manufactured Home Insurance Cost?

The cost of manufactured home insurance can range from $1,000 to nearly $5,000 per year, according to ValuePenguin. Because manufactured homes are considered more vulnerable to damage than traditional site-built homes, coverage typically costs more than standard homeowners insurance. How much you'll pay for manufactured home insurance depends on the following factors.

• Your home's size and value: Larger or more expensive homes cost more to insure because they often cost more to repair or replace.
• The type and amount of insurance you buy: The more coverage you purchase, the more it costs. Policy riders, such as replacement cost value coverage, also increase your premiums.
• Your home's age: You'll generally pay more to insure an older mobile home and may have fewer insurance options. In Florida, for instance, many insurance companies don't cover mobile homes over 20 years old; some won't cover homes built before 2022.
• Your location: If your area is prone to threats like hurricanes, hailstorms or wildfires, your manufactured home is at greater risk, so insurance costs more.
• Your insurance deductible: The deductible is the amount you're responsible for when you file a claim; it's typically subtracted from your insurance payout. Generally, a higher deductible lowers your rates. Just make sure you can afford the deductible if you file a claim.
• Previous home insurance claims: Any claims within the past seven years, either by you or your home's previous owners, could mean higher insurance premiums.
• Your mortgage: Your mortgage lender will require enough insurance to pay off your loan. However, you may need more coverage than that to replace your home after a disaster.
• Your credit: In most states, insurers can review your credit-based insurance score when setting home insurance rates. A lower score could mean paying more for manufactured home coverage.

Bundling mobile home insurance with other coverage (such as auto or boat insurance) can save money. You may also get discounts on mobile home insurance if you're over 55 years of age, recently bought your home, install certain safety devices, pay your bill in full, autopay or use paperless billing, are the original owner of your mobile home or belong to certain membership organizations.

Is Manufactured Home Insurance Required?

Manufactured home insurance generally isn't required by law. However, if your manufactured home is financed, mortgage lenders usually require homeowners insurance to protect their investment. Mobile home parks and communities might also require manufactured home insurance.

Unless you could afford to repair your home or buy a new one after a disaster, purchasing mobile home insurance often makes financial sense even if your home isn't mortgaged. Mobile home insurance provides peace of mind that you can repair or replace your home if necessary.

How to Buy Manufactured Home Insurance

To purchase manufactured home insurance, here's what to do.

1. Figure out how much coverage to get. You'll need enough structure coverage to replace your mobile home if it's destroyed. Conduct a home inventory to estimate the cost of replacing all your possessions. Get enough personal liability insurance to protect your assets from a lawsuit.
2. Evaluate add-on coverage. Purchasing extended replacement coverage or inflation coverage can help ensure your coverage keeps up with rising costs. Depending on your net worth, you may want to buy more liability coverage than the standard mobile home policy provides or add umbrella insurance to your home and auto policies.
3. Shop around. Get quotes from several insurers to find the best policy. Many insurance carriers that sell mobile home insurance provide coverage through partners specializing in this type of coverage, such as Assurant, American Modern or Foremost. Be sure to compare the same type and amount of coverage and the same deductible.
4. Choose a policy and pay your premiums. Paying annual premiums upfront may earn a discount. However, you can typically break premiums into monthly payments to fit your budget.

How to File a Manufactured Home Insurance Claim

To file a manufactured home insurance claim, follow these steps.

1. Call the police if a crime, such as burglary or vandalism, occurred. You'll need a police report as evidence.
2. Contact your insurance carrier. You can typically do this by phone or online. You'll be assigned a claims adjuster who will handle your claim and guide the process.
3. Take photos or videos of the damage. Keep damaged items until the claims adjuster says you can get rid of them.
4. Make any urgent repairs to prevent additional damage. Save receipts for any services, equipment or supplies you buy for repairs.
5. Get repair estimates. Your claims adjuster can use quotes you get from licensed contractors to help calculate repair costs.
6. Keep ALE receipts. If you must move out temporarily, you'll generally pay additional living costs upfront and get reimbursed later. Save receipts to document any expenses exceeding your normal living expenses.

Once your claim is approved, you'll receive a payment minus your deductible. You may get one check or several—for example, one check for personal property and another for structure damage. If your personal property insurance covers replacement costs, you'll usually get an initial check for your items' actual cash value, then receive full reimbursement once you replace the items and submit receipts.

Keep detailed records throughout the claims process and verify any coverage limits or deadlines. For instance, you may need to replace personal belongings within a certain time to receive reimbursement.

The Bottom Line

Manufactured home insurance helps protect you financially if disaster strikes your home. In most states, improving your credit-based insurance score could save you money on mobile home insurance. Credit-based insurance scores aren't the same as consumer credit scores, but since they're based on many of the same factors, checking your FICO^® Score^☉ for free with Experian can give you a general idea of where your credit-based insurance score stands. Paying bills on time and paying down debt could give your credit score a lift, which may help you pay less for manufactured home insurance.