Mobile Home Insurance: Do You Need It?

Insurance for mobile and manufactured homes covers the home, your personal property, and liability claims—similar to the coverage you would find in a standard homeowners insurance policy. While you aren’t obligated by law to insure these homes, mortgage companies and mobile home communities may require coverage. Here’s a quick look at mobile home insurance—what it is, what it covers, and whether you should invest in a policy.

What Is a Mobile Home?

More than 17.5 million people in the U.S. live in mobile homes, aka manufactured homes.  According to the 2017 American Housing Survey (the most recent available), manufactured housing comprises about 3% of all housing in urban areas and 15% in rural areas.

In general, manufactured homes have two defining characteristics:

1. They are built in factories instead of on-site.
2. They rest on a movable chassis instead of a slab, crawlspace, or basement.

Manufactured homes come in three sizes: single wide, double wide, and triple wide:

Because they’re built in a controlled, factory environment, manufactured homes are energy efficient. They can be easily customized with a variety of features, from vaulted ceilings and sheetrock walls to arched doorways and solid wood cabinetry.

What’s the Difference Between a Mobile Home and a Manufactured Home?

While people use the terms mobile and manufactured interchangeably, there’s actually a notable difference. According to the U.S. Department of Housing and Urban Development (HUD), a factory-built home that was constructed before June 15, 1976, is considered a mobile home; anything built after that date is called a manufactured home. Despite this, the insurance industry generally still calls the product “mobile home insurance.”

Since 1976, federal construction regulations have mandated the minimum construction and safety standards for mobile and manufactured homes.

Do You Need Insurance for a Mobile or Manufactured Home?

Unless your mortgage company or mobile home community requires coverage, the decision to insure your manufactured home—or not—is up to you. The average cost for a new manufactured home runs about $83,000, according to data from Homes Direct, a manufactured and modular home dealer. Given that price tag, it’s recommended that you get an adequate policy to protect your home and belongings.

What Does Mobile Home Insurance Cover?

Insurance for mobile and manufactured homes is similar to the coverage offered by traditional homeowners insurance. And like typical homeowners policies, you can customize your policy by adjusting the coverage limits and adding endorsements, which is another term for amendments or policy modifications.

The Insurance Information Institute (III) states that manufactured home policies typically include basic coverage for:

Physical damage

This pays for accidental damage to your home, belongings, and other structures (such as an attached deck or an outbuilding) caused by events like fire, hail, wind, theft, vandalism, and falling objects. The III advises that “the amount and degree of coverage varies from one policy to another, so make sure to compare policies carefully. Also note that, like regular homeowners insurance, flooding is not covered. If you are in a flood zone, you can purchase separate flood insurance.” The same holds true for earthquakes and wildfires. If you’re in a high-risk zone, consider adding coverage for these natural disasters.

Personal liability

Liability coverage helps protect you if a household member is found liable for damage to someone else’s property, or if someone is injured at your home (it does not cover injury or illness for anyone living in the home). Claims might include medical expenses, lost wages, and pain and suffering. The III notes that the amount of insurance you need to protect your assets could be more than what comes with a standard manufactured home policy. If that’s the case, consider buying additional liability insurance.

Named perils policies are another coverage option. These are comparatively cheap policies, but they only cover specific causes of loss named in the policy. That means if your home is damaged by a cause not included in the policy, you’ll be on your own to repair the damage and replace your personal belongings. Even though you’ll save money on premiums, the added risks could outweigh the savings.

How Much Does Mobile Home Insurance Cost?

Just like regular homeowners insurance policies, the amount you pay for manufactured home coverage depends on numerous factors, including:

• The home’s value
• The size of the home (its square footage)
• The year it was built
• The value of your personal belongings, including collectibles
• The home’s physical address (location-based factors like severe weather, risk of floods and wildfires, crime rates, and your town’s response to these hazards all affect the cost)
• The construction materials
• Repair and renovation history
• Existing claims on your home policy
• Whether you rent or own the lot where the home is located
• The presence of safety devices in the home, such as smoke detectors, fire extinguishers, and sprinklers
• The home’s security features, such as deadbolts, burglar alarms, security gates, and fireproof safes

In addition to your home’s features, the cost will also depend on the coverage limits and deductibles you choose. Typically, you’ll pay a higher rate for more comprehensive coverage and lower deductibles, and a lower rate for more basic coverage and higher deductibles. In general, you’ll pay between $300 and $1,000 to insure a manufactured home, according to TrustedChoice.com, a group of independent insurance agents.

When you shop for insurance for your manufactured home, try to find the combination of coverage and deductibles that works best for your budget and meets your insurance needs.

The Bottom Line

While manufactured homes can be expensive—an oceanside double-wide in California recently sold for about $2 million—they generally offer a more affordable path to homeownership than traditional homes do.

Despite lower costs, it’s a good idea to protect your investment with an adequate insurance policy. After all, the premiums you will pay are probably a tiny fraction of the costs you might incur to repair or replace your home on your own. Rates do vary from company to company, so be sure to compare at least three quotes to ensure you get the coverage you want at a price you can afford.