Key Takeaways
- Mobile home insurance uses modified homeowners forms (MH forms) designed for manufactured housing construction and transportation risks
- The HUD code (1976) distinguishes MANUFACTURED HOMES (built after 1976 to federal standards) from MOBILE HOMES (pre-1976 construction)
- Coverage options include REPLACEMENT COST (preferred) and ACTUAL CASH VALUE—ACV can result in very low payouts due to rapid depreciation
- TRANSPORTATION coverage protects while moving the home—standard policies exclude this peril and require a special endorsement
- Trip collision coverage and tie-down/anchoring requirements are unique considerations for manufactured housing policies
Mobile Home and Manufactured Housing Insurance
Terminology: Mobile vs. Manufactured
HUD established construction standards in 1976:
| Term | Definition |
|---|---|
| Mobile Home | Built BEFORE June 15, 1976 (pre-HUD code) |
| Manufactured Home | Built AFTER June 15, 1976 (to HUD code) |
| Modular Home | Built to state building codes, transported to site |
Quick Answer: After 1976, homes built in factories to HUD standards are called "manufactured homes." Older factory-built homes are "mobile homes." This distinction affects insurability and coverage availability.
Why Special Policies Are Needed
Standard homeowners policies don't adequately address:
| Issue | Why It Matters |
|---|---|
| Construction Type | Lighter materials, different fire spread patterns |
| Transportation Risk | Can be damaged during relocation |
| Tie-Down Requirements | Must be properly anchored for wind coverage |
| Depreciation | Manufactured homes depreciate faster than site-built |
| Foundation Type | May not have permanent foundation |
Mobile Home Policy Structure
MH (Mobile Homeowners) Forms
| Form | Coverage Level |
|---|---|
| MH-1 | Basic named perils (fire, lightning, windstorm, etc.) |
| MH-2 | Broad form with additional perils |
| MH-3 | Special form (open peril on dwelling) |
Coverage Sections
| Coverage | What It Covers |
|---|---|
| Coverage A | The manufactured home structure |
| Coverage B | Other structures (decks, sheds, carports) |
| Coverage C | Personal property |
| Coverage D | Loss of use/additional living expenses |
| Coverage E | Personal liability |
| Coverage F | Medical payments |
Valuation Options
Replacement Cost Coverage
| Feature | Details |
|---|---|
| How It Works | Pays to replace with similar manufactured home |
| Depreciation | NOT deducted |
| Premium | Higher |
| Best For | Newer, well-maintained homes |
Actual Cash Value Coverage
| Feature | Details |
|---|---|
| How It Works | Replacement cost MINUS depreciation |
| Depreciation | DEDUCTED from payment |
| Premium | Lower |
| Risk | May receive very little for older home |
Warning: Manufactured homes depreciate quickly. A 15-year-old home insured for $50,000 ACV might only pay $15,000-$20,000 after depreciation. Replacement cost is strongly recommended.
Special Coverage Considerations
Transportation Coverage
Standard policies EXCLUDE damage during transportation.
| Scenario | Standard Policy | With Transport Endorsement |
|---|---|---|
| Moving to new location | NOT covered | Covered |
| Trip collision damage | NOT covered | Covered |
| Jackknifing/overturning | NOT covered | Covered |
Trip Transit Coverage: Purchased separately for each move. Covers:
- Collision during transport
- Upset or overturn
- Objects falling onto home
- Loading/unloading damage
Tie-Down/Anchoring Requirements
| Requirement | Why Important |
|---|---|
| Proper Anchoring | Coverage may be voided if not properly tied down |
| Wind Coverage | Often requires proof of code-compliant anchoring |
| Inspection | Some insurers require anchoring inspection |
Common Tie-Down Standards:
- Ground anchors at specified intervals
- Strapping systems meeting HUD requirements
- Foundation supports properly installed
Coverage Exclusions
Common Exclusions
- Transportation (unless endorsed)
- Settling, cracking of foundation supports
- Inherent vice or manufacturing defects
- Flood (separate NFIP policy required)
- Earthquake (separate endorsement available)
- Mechanical breakdown of built-in appliances
Vacancy Restrictions
Many policies limit coverage after extended vacancy:
- Coverage reduced after 30-60 days vacant
- Vandalism and malicious mischief often excluded
- Water damage may be excluded
- Must notify insurer of extended vacancy
Liability Considerations
Rented Lot Liability
If the manufactured home sits on a rented lot:
- Landlord requires proof of liability insurance
- Policy must cover activities on rented space
- May need additional liability limits
Lienholder Requirements
If financed:
- Lender requires adequate coverage
- Loss payable clause protects lender
- Lender may require replacement cost
- Coverage amount must meet loan balance
Key Endorsements
| Endorsement | Coverage Added |
|---|---|
| Trip Transit | Coverage during relocation |
| Scheduled Personal Property | Specific high-value items |
| Earthquake | Earthquake damage |
| Equipment Breakdown | Built-in appliance failure |
| Identity Theft | Recovery expenses |
What is the difference between a "mobile home" and a "manufactured home"?
Why is Replacement Cost coverage strongly recommended over ACV for manufactured homes?
Does a standard mobile home policy cover damage while the home is being transported to a new location?