Mobile and manufactured home insurance explained: a beginner's guide

A manufactured home is built in a factory on a steel chassis, transported to a site and set on piers, a slab or a permanent foundation. Insurers treat it as its own category. The policy that covers it borrows most of its structure from a homeowner policy, dwelling, other structures, contents, loss of use, liability, but the form is written for a structure that can be moved, that is lighter than a site-built house, and whose value behaves differently over time. The word 'mobile home' is still used for older units and in park signage; carriers generally use 'manufactured' for anything built to the federal construction standard and 'mobile' for what came before it.

This guide explains what the policy pays for, where it is narrower than a standard homeowner form, how the settlement clause decides what you get after a total loss, and what to check if the home is in a land-lease community. A modular home, built in sections in a factory but assembled on a permanent foundation to the local building code, is usually insured on a standard homeowner form and is not the subject here.

What the policy covers

The dwelling coverage insures the home itself, including built-in appliances, cabinets and floor coverings that came with it. Other structures covers what stands apart from the unit: a carport, an awning, a storage shed, a deck, a ramp, skirting and the steps. Contents covers furniture, clothing, electronics and the rest of what you own inside. Loss of use pays for somewhere to live while a covered loss is repaired. Personal liability responds if a guest is hurt on the lot or you damage someone else's property, and medical payments covers a visitor's minor injury without a lawsuit.

Two things distinguish the form. First, many manufactured home policies are written on a named-perils basis, meaning the policy lists what it pays for, fire, lightning, wind, hail, explosion, vehicle impact, theft, vandalism, falling objects, weight of ice and snow, sudden water discharge, and anything not listed is not covered. Some carriers offer an open-perils upgrade that reverses the logic; it is worth asking for. Second, the other-structures and contents limits are often set as a smaller fraction of the dwelling limit than on a site-built policy, so a household with a full carport, a workshop and a lot of tools should read those two lines rather than assume.

The settlement clause: the number that matters more than the limit

A manufactured home depreciates in a way a site-built house usually does not, and the policy's settlement clause decides whether that depreciation lands on you. There are three common designs. Actual cash value pays what the home was worth just before the loss, replacement cost less depreciation for age and condition. Replacement cost pays what it costs to buy a comparable new unit and set it up, less the deductible, once you actually replace it. Stated amount, sometimes called agreed value, pays a figure fixed in the policy at issue, whatever the market says on the day of the loss.

Suppose a home bought new for $90,000 is fifteen years old when a fire destroys it. A comparable new unit delivered and set up now costs $110,000. Under actual cash value the carrier depreciates the original unit to, say, $45,000 and pays that less a $1,000 deductible. Under replacement cost it pays up to the dwelling limit, so if the limit was kept at $110,000 the household is made whole. Under a stated amount of $70,000 it pays $70,000 regardless. Those are invented figures; the pattern is not. Older homes are frequently only offered actual cash value, and the premium difference between the three designs is small compared with the difference in what you receive.

The decision rule: if the home is new enough for a carrier to offer replacement cost, take it and set the limit to the current delivered-and-installed price of a comparable unit, not the price you paid. If only actual cash value is available, know what the depreciated figure is now, because that is the cheque, and consider whether a stated-amount option would fix a number you can plan around.

Wind, tie-downs and why the premium moves

Wind is the peril that shapes this product. A manufactured home presents a large flat side to a gust and weighs less per square foot than a framed house on a footing, so anchoring is the single biggest underwriting question. Carriers ask whether the home is tied down to engineered ground anchors or set on a permanent foundation with the wheels and hitch removed, and many price or decline on the answer. In Arizona the monsoon delivers outflow winds and microbursts that peel roofs and roll unanchored units; the high desert around Las Vegas, Reno and southern Utah gets sustained spring wind; along the Snake River Plain in Idaho the concern is wind in the open and snow load on the roof in winter.

Beyond anchoring, the premium follows the age and length of the unit, the roof material and its age, whether it sits on owned land or a leased lot, the distance to a fire station and a hydrant, the presence of a wood stove or space heaters, the deductible, the settlement clause, and the claims history of the household. Some policies carry a separate wind and hail deductible, sometimes a percentage of the dwelling limit, that applies only to those perils; read the declarations for it.

What the policy does not cover

The exclusions track a homeowner policy, with a few that are specific to the construction.

• Flood and surface water, including a wash that overtops or a park drainage ditch that backs up. A separate flood policy is the only route.
• Earthquake and earth movement, including settling of the piers or the pad. Utah's Wasatch Front and parts of southern Idaho and Nevada are seismic; an endorsement or a separate policy is available from some carriers.
• Wear, rot, corrosion, rodent damage to underbelly insulation and wiring, and gradual leaks. These are maintenance, not perils.
• Damage while the home is being moved, unless a transit or trip endorsement is bought for the move. Standard policies suspend coverage from the moment the unit is lifted.
• Vacancy beyond a stated period without notice to the carrier, on many forms.
• Mould beyond a small sublimit, and business property or liability if you run a business from the home.

In a park: whose policy covers what

In a land-lease community you own the home and rent the lot. The park owner's policy covers the park's roads, clubhouse, common areas and the park's own liability; it does not cover your unit or your belongings, and it does not cover a guest who trips on your steps. Your policy does that. Most parks require proof of liability coverage in the lease and some name a minimum limit; the lease is the place to look. Check also whether the lease makes you responsible for the lot's trees, the utility pedestal or the skirting, because any of those can turn into a claim against you rather than the park.

If the home sits on land you own, ask whether the title has been converted so the home is taxed as real property. In some states that conversion is possible once the home is on a permanent foundation, and it changes how a lender treats the loan and sometimes which policy form a carrier will use. It does not change the physics of wind, so the anchoring questions remain.

Buying it: what to bring to the conversation

The application is short but the answers drive the price and the settlement, so have them ready.

• The make, model, year, serial number and dimensions from the data plate inside the home.
• Whether the home is anchored, on a permanent foundation, or both, and whether the wheels and hitch are removed.
• The roof type and its age, and the age of the heating system and any wood-burning appliance.
• Whether the lot is owned or leased, and the park's insurance requirements from the lease.
• The current delivered and installed price of a comparable new unit, for the replacement cost limit.
• A photo inventory of contents and of the carport, shed and deck, because those limits are often lower than people expect.

How to use this

Two questions settle whether the policy you have is doing its job: what does the settlement clause say, and what would the other-structures and contents limits actually replace. If the answer to the first is actual cash value on a home that could qualify for replacement cost, the fix is cheap and immediate. We put the declarations against what the carriers we represent will write for the same home in Arizona, Nevada, Utah and Idaho, including the wind deductible and the anchoring credit. If the existing policy already reads well, we tell you to keep it.