Home sweet mobile home
Be it ever so humble,
there's no place like a mobile home. But if you want to protect it, you need to
have the right insurance.
These days, manufactured homes
-- the preferred industry term -- are looking a lot more like conventional homes,
sporting everything from fireplaces to basements.
mobile homes are very much like site-built homes," says David Emaus, CPCU,
a senior product manager for Foremost Insurance Co., which concentrates on specialty
insurance on everything from mobile homes and boats to antique autos.
But whether you've got a newer model that
looks more like a conventional home or the old-fashioned trailer park variety,
the right coverage is important. As with any policy, you want to get a number
of quotes from a few different companies. You may find that fewer companies are
willing to write either homeowners or contents insurance on older homes.
sure your insurance carrier has a good reputation and is financially strong, with
an A+ or A rating from an independent rating firm like A.M.
Best Company, says Emaus. A good resource: your state's
insurance office Web site.
And you may be better off going with an insurer that specializes
in manufactured homes, says Jeanne M. Salvatore, vice president of consumer
affairs for the Insurance Information Institute, an industry educational organization.
"If you're doing anything outside
the norm, you want someone who writes a lot of it," she says. "They
can best advise you of special needs and special coverages."
If you own your home, you want replacement
value coverage on your dwelling. First the bad news: you will likely pay more
for less coverage than in a conventional home.
Manufactured homes "tend to have
much higher premiums because the value is not so great and they tend to experience
more loss," says Robin Olson, senior research analyst, International
Risk Management Institute, an insurance and risk management research and
As a result, although the average homeowners policy value
is $120,000 and the average mobile home owner's value is $30,000, Emaus says,
both will pay about the same amount for their coverage.
As you're shopping coverage, there are two major issues you want
to examine, says Emaus. What articles or structures are covered under the policy
-- and what specific dangers are either included or excluded?
You may encounter a policy that covers your home but excludes
wind or hail. Or perhaps it covers you from a roster of specific dangers --
the industry calls them 'perils' -- but you are limited to damage caused only
by those forces.
Instead, says Emaus, you want to make sure that your home and
belongings are covered under any scenario.
Some companies are not including flood coverage in their standard
policies, says Kevin E. Randall, senior vice president of American Modern Insurance
Group, which insures manufactured and mobile homes.
"[But] that's a must," he says. "A lot of manufactured
homes are put in flood plains, and some are more susceptible to flooding because
of the foundation."
Wind, too, is a particular danger for some manufactured homes.
Insurance companies can also set different standard deductibles
for different types of damage, says Randall. For instance, if you live in a
tornado-prone area, you might have to pay extra for a lower deductible for wind-related
damage. When it comes to setting your deductible, the higher it is, the less
"Ask yourself: For this much more, are you willing to take
this much more risk?" says Emaus. And if possible, bank the amount of your
deductible -- or more -- to cover minor damage.
One fairly recent trend is that insurance companies will calculate
your deductible as a percentage of the home's value "as opposed to a fixed
amount," says Bruce Savage, vice president of public affairs for the Manufactured
Housing Institute, a national trade association.
"You want it clearly understood what your deductible is going
to be, so that you're not blind sided by this," he says.
With a mobile home policy, any structures not attached to the
home -- such as a carport, shed, detached garage or fence -- might not be covered.
So it's usually a good idea to add them to the policy.
As your home ages, the premium will likely increase. If your home
is 10 years old or more, your premium may be 15 percent to 25 percent higher
than when it was new, says Randall. That's because the cost of replacing your
home with a new model goes up every year.
"When you're buying a new mobile home, they go up every year,
just like cars," says Emaus.
Especially with older mobile or manufactured homes, "it's
hard to know what that home's value is," says Savage. "Ask the insurance
company to assess the value of the home. They will have some type of process
"Proper valuation of the home is essential to get the proper
amount of insurance for that home," says Savage.
But what about my stuff?
Some homeowners policies include some contents insurance -- perhaps 30 percent
to 50 percent of the value of the home, says Randall. His advice: make sure
that's enough to cover your possessions, and if it's not, add extra.
If you rent your home, you want to have contents insurance, similar
to an apartment renters policy, to cover loss of possessions under any situation.
Be wary of a policy that covers your belongings in some situations, but not
Look for 'replacement value'coverage. That way, the insurance
company is promising that if you lose something, whether it's the mobile home
or just the stove and refrigerator, you will get a new version of that same
item. Otherwise, the policy will just pay you whatever amount you could get
for the item if you sold it, depreciation and all. And make sure that the insurance
covers all types of loss, not just the ones named in the policy.
"In most cases, you have to ask for replacement value coverage,"
You also want to include provisions if your home is damaged and
you have to live somewhere else while it's being repaired. Usually, says Randall,
it's written into the policy for 10 to 20 percent of the dwelling amount.
But this is another area where renters have to be careful. If
you own the home, and are taking out $20,000 worth of coverage to protect the
entire dwelling, you'd get up to $4,000 to cover your living expenses while
your home was repaired or replaced. But if you're renting, and have a contents
policy for a much smaller amount, you'll recoup much less for living expenses.
Best bet: Bank some money for an emergency fund.
Here is something else to think about. It could be as much as
one month before your claim is settled. Before you sign up for coverage, ask
how your carrier handles a temporary housing need if you have to vacate, says
Whether you own or rent, you probably want to include comprehensive
personal liability insurance, which pays if someone is injured on your property.
In many cases, you can increase the base amount that comes standard with your
policy "and it doesn't cost very much," says Randall.
Preparing for a loss
When it comes to your home or your possessions, ask exactly
how much money you'd receive if you had a total loss. If you have replacement
value insurance on your home for more than it's worth, some companies will give
you the amount of your policy. Others will give you only what it would cost
to replace your home and possessions, says Emaus. Do your own homework and only
insure your home and possessions for what it would actually cost to replace
them, and no more.
"You can pay too much if you're over-insured," says
Some questions to ask: If you have a total loss, how much would
the company pay out? And how exactly do they calculate the loss? Get the answers
in writing and keep that paperwork with your policy.
Make a copy of your policy, as well as any other valuable papers,
and keep the copies in a safe location off site. That way, if you have a total
loss you'll have all your paperwork handy. And a videotape or snapshots of your
possessions, stored with that copy of your policy, will make the claims process
Likewise, if you have a large or total loss, you want the policy
to cover the cost of hauling debris from your site. In a homeowners policy
on a conventional home, debris removal is based on a percentage of the total
home value, says Emaus. But since mobile homes are often worth less, "it
becomes a real issue because generally these things have to go to landfills,"
'Mobile' homes and discounts
The term 'mobile home' is a misnomer. Most remain in one
place after set up, says Emaus. But if you are moving your home, you need a
special policy to cover it while in transit.
Your regular policy is null and void once you disconnect the utilities
and take the home off its foundation, he says. A moving policy is good for 30
days and will cost from $25 to $100, depending on the size of the home..
And when you shop for homeowners or contents insurance, don't
forget to ask about discounts. Depending on the company, you could get price
breaks for a basement or foundation, a shingle or pitched roof, smoke detectors
and fire extinguishers, skirting around the bottom of the home, or simply being
50 or older or for owning a newer manufactured home.
If you want to shave a few dollars on insurance and maintenance,
have a professional mobile home inspector (your insurance agent can recommend
someone reputable) make sure the home is properly set on the foundation before
you rent or buy.
Or you can call your state insurance office or department of motor
vehicles, depending on which has oversight in your state, and get a list of
inspectors with experience in manufactured or mobile homes.
Having a home that is properly set on its foundation, says Randall,
can eliminate "a lot of the problems [that might necessitate] paying insurance
Dana Dratch is a freelance
writer based in Atlanta.
-- Posted: Sept. 23, 2003