Manufactured homeowner’s insurance plans can vary greatly between insurers. This is one of the reasons why coverage can be very confusing particularly for first-time manufactured homebuyers. In this post, we’ll try to clarify this topic.
For starters, many homebuyers who purchase a manufactured home with the help of a loan are unaware that lenders often require borrowers to maintain adequate and continuous manufactured homeowner’s insurance over the life of their loans, as confirmed by the Insurance Information Institute.
An important thing to know is that this form of insurance is intended to protect the lender’s interest in the property until the borrower repays the loan. Because lenders know it is difficult for a borrower to continue paying a loan on a manufactured home that was damaged or destroyed by an insured event, they require this type of insurance, whose role is to reimburse the lender for financial losses up to the outstanding loan balance.
An essential aspect is that the manufactured homeowners insurance required by the lender which protects the homeowner as well as their investment. Most standard manufactured homeowner’s insurance policies exceed the amount of the loan, covering the full replacement cost of the home’s physical structure, and not only the lender’s interest in the home. To ensure sufficient coverage, here’s what your manufactured homeowner’s insurance policy should include:
Dwelling and Other Structures
In the world of insurance, the more coverage you get, the less you’ll have to pay out of your pocket if a disaster strikes. Although the lender is the one that sets the minimum requirements for manufactured homeowner’s insurance, the good news is that you can opt for a policy that exceeds the amount of coverage required by your lender.
If you don’t live in a high-risk flood zone, for instance, your lender might not require flood insurance coverage. But considering that approximately 90% of natural disasters involve flooding and about 25% of flood insurance claims are filed in non-risk flooding areas, opting for a comprehensive manufactured homeowner’s insurance policy that includes flood damage is a smart decision for any manufactured homeowner, regardless of his or her location. In addition to providing coverage for the home itself, manufactured homeowner’s insurance covers other permanent structures, including garages, decks, patios, and fences.
Another point worth mentioning is that, even though standard manufactured homeowner’s insurance policies cover similar perils, some insurance companies provide more comprehensive plans than others. The easiest way to choose the best coverage option for your manufactured home is to approach a manufactured home insurance agency that provides insurance products from different insurers and compare policies, and considers the types of coverage needed by the individual consumer including coverage limits, exclusions, deductibles, and premiums.
Personal Property and Liability
A comprehensive manufactured homeowner’s insurance policy should also include coverage for the contents of your home, like clothing, electronics, and furniture, along with liability protection against claims that might potentially arise from injuries to other people or damage to their personal property.
- Additional Living Expenses
Repairing or replacing a manufactured home partially damaged or completely destroyed by an insured calamity can take many months. Opting for an insurance policy that includes a “loss-of-use” provision will help cover the cost of living elsewhere along with out-of-the-ordinary expenses, which wouldn’t have incurred if no loss or damage had occurred, until the home gets repaired or replaced.
Limits and Sublimits
All manufactured homeowner’s insurance policies include limits, which can also carry sublimits. For example, while the sublimit for personal property is set between 40% and 50% of the home’s value, personal liability sublimit starts at $50,000, with the possibility of extending it up to $300,000. Also, a standard manufactured homeowner’s insurance policy provides coverage sublimits on additional structures up to 20% of the dwelling. To make sure your manufactured home is properly insured, it’s imperative that you inform your insurer about any structures you add or improvements you make over time. The insurer will adjust your coverage accordingly so that all the improvements made are covered under the policy.
Now, the most valuable piece of advice:
When it comes to finding adequate manufactured homeowner’s insurance, the types of coverage, limits, exclusions, deductibles, and premiums are just some of the things you should consider. To get the most out of your insurance, it’s equally important to find a reliable manufactured home insurance company that’s financially sound and pays claims on time. The easiest way to find such a company is to approach a manufactured home insurance agency that offers policies from many reputable insurance providers.
Blog has been updated - 2021