Two common questions we get is what is manufactured home insurance and how is it different than regular homeowner’s insurance? Great questions here are the answers.
What is manufactured home insurance?
Manufactured home insurance is similar to home insurance that covers manufactured or mobile homes. However, there are several differences that while seemingly small, make a big difference when you go to purchase manufactured home insurance.
First What is a Manufactured Home?
To better understand this question two, we have to understand what a manufactured home is. Manufactured homes include single-wides, double-wides, park models, and all the variations in between. They can be on private property or in parks. Manufactured homes are built in accordance with code set forth by Housing and Urban Development (HUD), a part of the federal government. While similar mobile homes were built before 1976 and were not required to comply with HUD standards.
There are several things that distinguish a manufactured home from a regular home is that they are not built on a foundation, but rather on a steel chassis. They are built in a factory and moved the site of the home mostly completed. The net effect of this several distinguishing features from a regular stick-built home.
First, they depreciate or go down in value over time, rather than appreciate in value. Very important for insurance. Second, by their nature losses to the home tend to have a greater and tend to result in more total losses.
In summary, manufactured homeowner’s insurance is like regular homeowner’s insurance, but takes into account several very important differences like the concept of depreciation.
How is Manufactured Home Insurance coverage different than regular homeowner’s insurance?
On the surface, it may not seem like there are many differences between Manufactured Home Insurance and regular home insurance. After all, both cover the home, your stuff, loss of use of the home, liability, and medical payments. Sometimes homes are even written on what’s called an “HO3” policy form which would make it the same. But there are some differences.
- Because manufactured homes depreciate you have to watch the valuation of the home. What does that mean? It means are you getting replacement cost, meaning the home burns to the ground you get a new home of “like kind and quality?” Or are you getting what it is worth today. For older home replacement cost might not be available. You need to know how your policy responds because most regular homeowner’s policies cover replacement regardless of the age of the home.
- Because of the depreciation what happens if it’s a partial loss. You want replacement cost for partial losses. Here’s what I mean. Hail storm destroys your roof. On manufactured homes policies you would get paid what the roof is currently worth rather than what it would cost to replace. So, a roof valued at 10,000 that is 10 Years old and has 20 Year shingles, you pay out $5,000 – minus the deductible. On the other hand, if you have full repair cost or replacement cost for partial losses you get $10,000 minus the deductible.
- Because of the nature of the HO-3 Policy form your stuff will be covered at actual cash value. Meaning in the event of a loss you might be left haggling with an adjustor. While this can happen on a regular homeowner’s policy too, this is something to look at.
- Personal Injury coverage is often not available. It usually can be purchased on a regular homeowner’s policy.
There are more differences, but the differences are very subtle. Your best bet is to ask your agent if they understand the ins and outs of manufactured home insurance and make them explain it to you. At Gila Insurance Group we work with a number of specialty Manufactured home insurance companies and can provide better answers with answers to these questions. Call us today, or start your manufactured home insurance quote now!
Manufactured Home Insurance coverage is not too different than what you might find on a regular homeowner’s insurance policy. While not all companies are the same if you get an actual manufactured home insurance specialty company like American Modern, Foremost or American Reliable, you should get some of the following coverage and coverage options.
The Home
The home is going to coverage for what is known as special or comprehensive coverage. This means unless we exclude the coverage, we are going to include the coverage. Things like fire, lighting, exclusion, damage done by water, hail, etc. are all going to be covered. This that are not covered are things like flood. A broken pipe that floods your home is going to be different than if the rains fall, causing flooding.
The question is how much will the policy pay out if there is a total loss. You want replacement cost on total losses and partial losses. Not all companies are going to be able to provide this, and especially if the home is older. So ask your agent how its covered.
Other Structures
Other structures are things like sheds, detached garages, and other “structures” that are not going to be connected to the home. They should be covered in the same way as the home, but make sure you have enough coverage because coverage for other structures isn’t automatic and when its included is can also be for low limits.
Personal Property
Question if you had a loss for your manufactured or mobile home do you want to negotiate with an insurance company how much your TV was worth. OF COURSE NOT. So here’s the thing. Manufactured Home insurance policies coverage personal property, but usually cover them for the actual cash value. BUT they can also cover it for replacement cost. For $20 bucks a year this is a heck of a deal.
Liability
What if you get sued. That’s what liability does. It protects you, and can pay for your defense and the pay out if you are found to be negligent. Also available for manufactured homes.
Medical Payments
Something that goes right along with liability. It pays for medical costs of people that don’t live at the home in case they get injured. The hope is if we help cover the deductible or part of the deductible maybe they won’t sue.
There are other coverage options as well. We at Gila specialize in manufactured home insurance, but even if you don’t go with us, find an agent that understands the unique coverage options provided by a manufactured home insurance policy.
No one likes to pay more than absolutely necessary for insurance. It’s one of those necessary evils, until that is you have a claim. Then it’s heaven sent. So how do you save on your insurance premiums. We have had many a client try to negotiate with us, unfortunately insurance rates are filed with the state insurance department and not really subject to negotiation. So how can you actually save? Here are 5 ways that can help you today.
Deductible
The quickest and easiest way to save on your insurance is to change the deductible. A higher deductible for you means less risk for the insurance company, so your rate goes down. A lower deductible for you means more risk for the insurance so your rate goes up. This isn’t a silver bullet, but if you are looking to save just a few bucks a month changing your deductible might do the trick. That said be careful with this. A higher deductible has real consequences in the event of a claim.
Payment Method
The payment method you choose can actually have a very REAL affect on your rate, and is a great way to save on your insurance. Did you know paying the entire premium upfront can save you 7-10% depending on the company. Auto pay can save you some as well. The bottom-line if the company is confident you will pay your bills they are usually willing to cut you a break.
Bundling… or not
Another cool 5% discount in a lot of cases. And a way to save on your insurance, some times. That said, sometimes your best bet is to shop your home and auto separately. While agents that can only sell you 1 company would like you to think that bundling is a must sometimes you can save money by having one here, and one there. Another benefit of an independent agent
Telematics
Big word. This discount is for auto insurance. What it means is that you let the insurance look over your shoulder at your driving for a period of time (technologically speaking) to see what kind of driver you are. Some people don’t feel comfortable with this, but here’s how it works. You get a device or download an app. Usually, the companies track just a couple of factors, such as speed, sudden starts or stops, and time of day you drive (between 12AM and 5AM not usually good). The discounts related to good driving can be awesome. With some companies up to 20%, but if you turn out to be not a great driver your rate can go up… depending on the company so ask if there is a possibility that your rate can go up. There are companies that won’t increase your rate, just decrease it.
Watch your Credit
Credit isn’t a discount or really a surcharge, but it is an element of what is called the insurance score. Insurance companies have found a connection between your credit and the likelihood you file a claim. Not every state allows it, but in those states that do, the better credit score you have the lower the rate, and in some cases by A LOT.
There are many, many more kinds of discounts insurance companies allow for, so ask your agents what discounts have been applied, and what discounts you qualify for. That said ask about these ones because these few can help you start saving money today.