Mobile Home and Manufactured Homeowners Insurance, What You Will Need
The following contains excerpts from PERSONAL FINANCE advertorial on-line via BUSINESS INSIDER.
One of the considerations when purchasing a new manufactured home or a pre-owned “mobile home” to be financed will be the lender’s requirement for prepaid homeowners insurance.
Homeowners insurance offers protection for homeowner’s belongings and the home itself. Unlike car insurance, homeowners insurance is not required by state law. However, if you have a mortgage (lienholder), your lender will require homeowner’s insurance to protect the investment. Additionally, mobile home communities may require owners to have mobile home insurance, whether or not there is a mortgage lender.
Type OF Insurance Policy Determined By How Home Is Sited
The type of homeowner’s insurance policy required will be determined by how and where the home is to be sited. There are two types of homeowner policies for manufactured homes. A manufactured home or mobile home not attached to real estate and financed with a chattel loan, also known as a “home only” loan, will require mobile home insurance commonly known as an HO-7 homeowner’s policy. A manufactured home or modular home attached to real estate will require a standard HO-3 homeowners insurance policy.
Mobile Home Insurance (HO-7) is similar to your standard homeowner’s policy (HO-3), with coverage that includes the home, belongings, liability, loss of use (additional living expenses), and equipment breakdown. Also available as an add-on, if not part of the
policy; high-end electronics and special jewelry, earthquake, and sewer/water damage; flood coverage required if the home is located in a flood zone.
Where To Find Manufactured Home Insurance
Manufactured home retailers will often offer homeownership insurance available as required by lenders with whom they work with, or will refer home buyers to an agent that will offer coverage acceptable to the lender. If a retailer is assisting in financing your manufactured home, the premium cost may be included in the amount financed, not necessitating the out of pocket expense.
Unlike standard homeowners (HO3) insurance policy where you can easily search for quotes online, mobile home insurance quotes are not readily available online. While some insurance companies offer mobile home ownership quotes online, most traditional homeowners insurance companies require you to speak with an agent to get a quote for mobile home policies.
How Much Does Manufactured Homeowners Insurance Cost?
Manufactured home and mobile home insurance premium costs can range from $300 to $1.000 depending on your location, whether the home is new or used, sales price or appraised value of the home, condition of the home, and where the home is located.
Manufactured or mobile homes located in coastal areas will have higher premiums. Manufactured or mobile homes located in weather-zones or disaster-prone areas–flood zones, hurricanes, tornadoes, wildfires, mudslides, hail, and earthquakes– will have increased premiums because these types of events are not included in basic coverage and will need to be add-on riders to the policy.