Insuring Your Mobile Home
Just as with traditional landlord insurance policies, mobile home insurance protects the investment and the contents within it. It also protects you if you are sued by someone who is hurt on your property.
Whether the mobile home is used as a rental or it is vacant, not having the appropriate coverage can be a mistake that can cost you anywhere from a few thousand dollars to $1 million or more if something goes wrong.
Mobile home insurance, also known as manufactured home insurance, is similar to traditional rental dwelling insurance. It typically covers:
- Repair or replacement of the mobile home due to damage from covered perils such as fire, lightning, wind, hail, water damage from sewers and drains, etc.
- Stated value loss settlement: If a total loss has occurred, you can settle for the full amount of your property at the value listed on your policy
- Reimbursement for the loss of personal belonging
- Trip coverage if you move your home to a new location
- Liability coverage
- Additional living expenses in case your mobile home is damaged severely enough that you need to pay for temporary living quarters while the mobile home is repaired.
When you shop for a mobile home insurance policy, it is important to understand the differences between mobile homes and modular home. The key differences are the following:
- Mobile home or manufactured home:
A home built in a factory and then transported to and installed at a site. Manufactured homes are built according to the HUD Code (formally the Federal Manufactured Home Construction and Safety Standards), a national standard that ensures the proper design and safety of manufactured homes. They are indistinguishable from site-built homes
- Modular home:
These are also factory-built homes, but instead of falling under federal guidelines, they are built according to standards set by state or regional codes in the area where the home will be located. As with the other homes on this list, they are later transported to and installed on a site.
Unlike manufactured homes, modular homes are more likely to be delivered in two or more pieces and built on crawlspaces or basements. They also look more like traditional "stick-built" homes.
When insuring Mobile homes or modular homes for investors, insurance agents need to classify the type of occupancy such as the following:
- Mobile homes located in a park or on private property
- Mobile homes used seasonally
- Rental mobile homes
Just as other dwelling insurance policies, Mobile Homes insurance has some exclusion. Many policies do not cover the mobile home while it is being transported. However, you could also add an endorsement.
Another exclusion is flood. You will need to purchase it through FEMA or an independent carrier.
If the mobile home has wheels and doesn't sit on blocks or a permanent foundation, you will likely have to purchase a form of automobile insurance to insure the home. Such a policy is likely to offer far less coverage than a typical mobile home policy.
Purchasing mobile homes has become a common strategy within the real estate investing community. It is important to insure it correctly just as other more expensive properties. If you have questions about the different types of policies, you should talk to an insurance agent with experience in mobile home for investors.