Mobile home insurance basics

By Jim Sloan on September 25th, 2010

If you live in a mobile home--whether it's your primary residence or a vacation getaway--you want to make sure you have the right kind of mobile home insurance to provide coverage for your investment.

Homeowners insurance policies for mobile homes can provide insurance protection for physical damage and personal liability. Mobile homes insurance policies are available for rental mobile homes, commercial-use mobile homes, seasonal-use mobile homes, and mobile homes located in parks or on private land.

According to the State of Wisconsin Office of the Commissioner of Insurance (Wisconsin OCI), insurance costs for a mobile home are usually more than the cost to insure a conventional house. The increased insurance cost is because of differences in construction that make mobile homes more likely to be damaged by the wind.

Generally speaking, mobile home insurance policies don't provide coverage for damage to the unit during transit to any location. However, a separate policy, sometimes called transportation coverage, can be purchased to cover that trip.

Physical damage coverage under your mobile home insurance policy

According to the Insurance Information Institute (III), if your mobile home is accidentally damaged by fire, hail, wind, theft, vandalism or falling objects, your mobile home, possessions and other structures--such as attached decks or storage sheds--are covered. Flood damage usually is not covered, unless you have a specific flood insurance policy in addition to your mobile home insurance.

There are two types of mobile home insurance damage policies available:

  1. Named peril policy: This type of mobile home insurance lists the specific causes of loss, or perils, which are covered by your policy. The III states that this is basic coverage with low rates; however, the III also cautions that if your mobile home is damaged by an unnamed peril, you could end up having to pay hundreds of dollars to repair your property.
  2. Comprehensive policy: Any causes of loss that are not specifically excluded by the policy, such as flood damage, are covered under this type of mobile home insurance.

Mobile home insurance also provides personal liability coverage

In the event that someone is injured or suffers a loss because of something you, your pet or a family member has done, your personal liability coverage under your mobile home insurance policy protects you when a claim or lawsuit is filed against you. A claim might provide coverage for medical expenses, property damage, lost income and pain and suffering of the injured party.

Replacement cost versus actual cash value

Home insurance policies typically allow you to choose between two levels of coverage: replacement cost or actual cash value. The replacement cost level of coverage pays the amount it would take to replace or rebuild your mobile home. The actual cash value replaces your home or belongings less a deduction for depreciation.

According to the Wisconsin OCI, most mobile home insurance policies are written as actual cash value policies. However, some insurance companies do have replacement value policies available, so you should shop around for the level of mobile home insurance coverage that best fits your needs.

Understand the provisions of your policy

It's also important to be aware of your insurance company's requirements for anchoring your mobile home. It may be necessary for you to secure your mobile home to the ground with tie-downs and ground anchors if it isn't already secured on a permanent foundation.

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