A client called me a few weeks ago. We’ve written several insurance policies on some rental properties he and his wife own. They are all traditional single family homes in the Dallas / Fort Worth area. The conversation was interesting because they are looking at selling several of their properties and replacing them with mobile homes. I thought it would be interesting to write about mobile home insurance and how it’s similar yet different from a home insurance policy on a traditional home.
A mobile home insurance policy is has a number of similarities to a traditional stick built single family home. The carriers ask many of the same underwriting questions such as whether it’s inside or outside of the city limits, the year it was built, how far away the nearest responding fire house is, it’s square footage, have there been any updates to the electrical, plumbing, and heating and cooling systems, and so on. There are also a number of differences between mobile or manufactured homes and traditional single family homes.
Replacement Cost: One of the biggest differences for a mobile home is that its replacement cost tends to be based on its purchase price rather than the valuation a carrier generates upon completing a replacement cost valuation which doesn’t look at a home’s purchase price. Traditional replacement cost calculations examine square footage, number of stories, exterior and interior wall material, roof type, grade of kitchen and bathrooms, flooring and more. New and newer mobile homes cost more to be insured than used homes which cost less.
Make, Model, & Serial Number: Insurers care about who made the home, its dimensions (width & length), what model it is and its serial number which is similar to a car or truck’s VIN number. All of these are required to write a mobile home insurance policy.
Tied Down: Is the mobile home tied down to a concrete pad or slab? This lessens the risk of wind damage to the home and injury to anyone in the home. Homes that are strapped down cost less to insure than homes that are not.
Height: How far off the ground the home sits is very important. Many mobile home insurance companies won’t write a policy if the home is elevated above the slab or pad more than 4 feet off the ground.
Land: Is the land the home sits on owned by the homeowner or leased? Is it within a mobile home park or not? We never even consider the land a traditional home sits on because the homeowner owns it along with the home. With a mobile home, it’s important for two reasons; rented or leased land may mean we need to include the park as an additional insured for liability reasons, and it may mean the park has an ownership stake in the home.
Additions: Has the home undergone any additions or modifications such as adding square footage or enclosing it in materials such as hardy plank or brick that cause it to change from a mobile home to one resembling a traditional single family home. If the additions were built by a professional rather than DIY project, they may be acceptable.
Not every insurance company will write mobile home insurance, but we work with several who will, whether as a primary home or rental property. It’s a matter of knowing what questions to ask and what the answers are. If you have a question, comment, or experience you’d like to share, please do so on my Facebook, Google +, or LinkedIn pages. I’d love to hear from you!
