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Tuesday, August 21, 2018

Making Mobile Home Insurance More Manageable


By Catherine Powell

Image courtesy of flickr
Until a few decades ago, mobile homes were treated like the stepchildren of the real estate industry.  The homes themselves were not built to withstand hurricane-force winds, they were treated as personal property (like a motor-home) rather than real estate, and they were far less energy efficient than comparable homes.  Fortunately, today this is no longer the case.  Modern mobile homes are engineered to withstand winds of up to 110-mph and can be built as energy efficient as traditional homes.  It’s also possible to finance a mobile home as real estate, provided the home and land are both purchased or owned by the homeowner. That being said, there are a few differences when it comes to insuring mobile homes.

What’s the difference between a mobile home and a traditional home?To begin with, mobile homes are not constructed the same as traditional homes. They need to be built of lightweight material to make transporting them to the home-site practical. As a result, they are not as sturdily built.  They are also strapped down to their foundation, as opposed to being constructed on a concrete foundation. This makes them more prone to damage than stick-built homes.

Image courtesy of Geograph
What does mobile home insurance cover? – Just as with site-built homes, mobile home insurance is based on the size and value of your home, as well as whether you own the land upon which it is situated.  The policy will also be structured to cover property damage, personal loss, and personal liability.

How does mobile home insurance differ from homeowner’s insurance? – Just like any other type of insurance, the costs are consummate with the risks. This includes damage done by fire, flood, theft, and wind. 

      1.      Fire –Due to their construction, mobile homes are typically more seriously damaged during a fire than site-built homes.  Once a fire gets started in a mobile home it tends to spread rapidly. 

      2.      Flooding – I’m not talking about water intrusion from outside the home.  I’m talking about flooding caused by frozen, burst or leaking pipes inside the home. Since pipes are harder to get at in a mobile home and most mobile homes typically have less insulation, this means pipes are more likely to freeze.

      3.      Theft – It’s a fact that mobile homes have a higher incidence of theft reported than do traditional homes. Sometimes it's due to the location, and sometimes it’s due to the isolation of many mobile home sites.

      4.      Wind – Even if your mobile home is securely tied to the foundation, it’s still more likely to receive wind damage than a stick-built home, since mobile homes are built lighter.

      5.      Relocation – Since mobile homes are built to go mobile, your policy needs to cover any damage done to the structure should you move your home.

How much insurance do I need? – Just as with traditional homeowner’s insurance, when it comes to determining the optimal mobile home coverage, you need to assess the particulars. 

      1.      Cash Value or Replacement Cost? - While you may think it’s relatively simple to put a value on the structure itself, you actually have two choices when it comes to putting a value on your mobile home.  If you choose to insure the structure based on the cash value and your mobile home is worth $50,000, the most you will receive is $50,000 if the structure is declared a total loss, even if you paid considerably more for it a decade ago.  However, if you opt for replacement value and a similar mobile home now costs $75,000, your insurer will pay you $75,000 minus your deductible in the event of a total loss.

Image courtesy wikipedia
      2.      Personal Property Coverage – This is a bit trickier to determine since it’s designed to replace the contents of your mobile home should they be stolen, damaged or destroyed. I mean, how much are all your possessions worth?  Typical minimums are $30,000 for a single-wide mobile home and $45,000 for a double-wide.   The most important question you need to ask yourself is what it would cost you to refurnish your home and replace your belongings were all the contents of your mobile home to be lost?  (Your insurance agent should be able to help you come up with an appropriate figure.)

      3.      Liability – This portion of your policy is designed to protect you should someone sue you for damages if they are injured in your home or on your property.  This coverage not only covers your legal fees, it can also cover everything from medical expenses and lost wages to pain and suffering.

      4.      The Deductible – This is the amount of money you will pay out of pocket should you file a claim.  The lower the deductible, the higher the premium and vice versa. 

Image courtesy of wikimedia
Do you need flood insurance? – Whether you live in a designated flood zone or not, that doesn’t mean your home can’t be damaged or destroyed by a flood.  When you consider the fact that northeast Florida receives thunderstorms on almost a daily basis during the summer, there is always the potential for flooding. Industry statistics bear this out since 25% of all flood claims are made in areas deemed low to moderate risk.  Another sobering statistic is that any kind of home is 27 times more likely to be damaged by flood than it is to be damaged in a fire. 

Do you need hurricane insurance? – Face it, Florida gets hit by more hurricanes than any other state. The Sunshine State has experienced 117 hurricanes in the past 170 years, including three category five storms.  Add to this the fact that any insurance claim brought after a hurricane automatically gets hit with a hurricane deductible equal to 2% of the home’s value and it’s obvious that you want to at least consider adding hurricane insurance to your policy.

How do you save money on mobile home insurance? – Just as with traditional homeowner’s insurance, there are ways of saving money when you purchase mobile home insurance.

      1.      Choose a higher deductible
      2.      Securely anchor your mobile home to its foundation
      3.      Add more security by installing deadbolt locks and a monitored alarm system
      4.      Bundle your mobile home policy with other insurance policies under one agency

With all that being said, even though the cost to insure a mobile home can be a bit higher than a stick-built home, mobile home ownership is still one of the largest investments you are likely to make.  
Therefore, you need to protect this asset if you don’t want to wind up going mobile should a calamity occur somewhere down the road.

Catherine Powell is the owner of A Plus All Florida, Insurance in Orange Park, Florida.  To find out more ways to save money and get the right coverage for your mobile home, check out her website at http://aplusallfloridainsuranceinc.com/

2 comments:

  1. If anything, mobile homes need more coverage than traditional homes, especially in Florida where major storms are common.

    ReplyDelete
  2. This is great information if you own a mobile home. I will share I will my friends.

    ReplyDelete

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