The High-Risk Equation: Manufactured Homes and Financial Exposure
A manufactured or mobile home is a significant investment, yet standard homeowners insurance policies typically won’t cover it due to its unique construction and higher risk profile. Because these structures are generally more susceptible to damage from fire, wind, and severe weather—and they depreciate quickly—your financial exposure to total loss is immense.
This specialized mobile home insurance (often an HO-7 policy) is not just a safeguard; it’s the only practical way to shield your largest asset and prevent the “Depreciation Tax”—the risk of losing everything and being reimbursed only for your home’s heavily devalued price.
The Four Pillars of Protection (HO-7 Policy)
A comprehensive mobile home insurance policy includes the same essential coverage types as a traditional policy, tailored specifically for manufactured housing risk:
1. Dwelling Coverage (Structural Security)
This protects the physical structure of your home (walls, roof, permanently attached features like decks or porches) against covered perils, such as fire, lightning, windstorms, and theft.
2. Personal Property Coverage (Contents)
This covers your personal belongings, including furniture, electronics, appliances, and clothing, if they are damaged or stolen due to a covered event.
Key Upgrade: Standard coverage usually pays out the Actual Cash Value (ACV), which accounts for depreciation. Because mobile homes and their contents can depreciate fast, it is crucial to upgrade to Replacement Cost Coverage to ensure you receive enough money to buy brand-new replacements.
3. Personal Liability Coverage (Legal Shield)
This is vital for protecting your financial future. It covers legal defense costs and settlement fees if you or a member of your household are found legally responsible for:
Bodily Injury to a visitor on your property.
Property Damage you accidentally cause to others.
4. Additional Living Expenses (ALE)
If a covered peril (like a fire or major wind damage) makes your home uninhabitable, ALE covers the costs of temporary housing (hotel rooms, rent) and increased expenses (meals out) while your home is being repaired or rebuilt.
Key Exclusions: Critical Gaps to Cover
Standard mobile home policies have dangerous exclusions that require separate, specific policies or endorsements, especially in high-risk areas.
Flooding: Damage caused by rising water, storm surges, or overflowing bodies of water is never covered by standard policies. If you are in a flood-prone zone, you must purchase a separate Flood Insurance policy.
Earthquakes: Damage from seismic activity is typically excluded and requires a separate Earthquake Insurance endorsement.
Wear and Tear: Damage caused by neglect, lack of maintenance (e.g., a long-term leaky roof), or gradual deterioration is not covered. Owners are expected to perform routine maintenance.
In-Transit Damage: Damage that occurs while the mobile home is being transported is generally excluded and requires a temporary Trip Collision Coverage endorsement.
Factors Dictating Your Premium
The cost of mobile home insurance (often ranging from $800 to $2,000 per year) is influenced by several unique risk factors:
Age of the Home: Homes built before June 15, 1976 (before the HUD code improved safety standards) often face higher premiums and may be difficult to insure.
Location Risk: Homes in areas prone to hurricanes, severe hail, or high crime rates will have significantly higher premiums.
Tie-Downs and Skirting: Installing safety features like tie-downs (to secure the home against wind lift) and adequate skirting can lower your premium.
Deductible: Choosing a higher deductible lowers your annual premium but means you pay more out-of-pocket before the insurer contributes.
Action Today: To secure your asset, compare quotes from insurers specializing in manufactured homes. Demand Replacement Cost Coverage to fully shield your investment from the Depreciation Tax, and inquire about discounts for safety features and bundling policies.