PF&M at a Glance
Mobile homes
Mobile homes are typically covered by providing physical damage on a basis similar to an automobile policy or on a homeowners (basic, broad or special cause of loss) basis. The preferred approach depends primarily on the type of mobile home. Exposures range widely from modest, anchored trailers existing on separate lots or within mobile home parks to large units that easily rival the cost and luxury of traditional, site-built residences. The latter are called manufactured homes and increasingly are handled exactly the same as a site-built home.
When a homeowners policy approach is used, comprehensive personal liability coverage, as well as additional options are included as part of a package. Because many insurers, regardless of any affiliation with either Insurance Services Office (ISO) or American Association of Insurance Services (AAIS), have developed their own mobile home programs, coverage may vary significantly among companies.
Regardless of differences, a typical mobile homeowners form responds either to specified perils (those causes of loss actually stated in the policy), or to comprehensive coverage, similar to automobile policies. Coverage also exists for personal effects, adjacent structures and equipment, personal liability and medical payments.
Mobile home insurance is often provided on an actual cash value basis, so significant depreciation can be a major concern for owners of mobile homes. The policy’s coverage extends to the mobile home’s equipment and accessories that were originally built into the structure. In addition, steps, and oil or gas drums, bottles or tanks connected to and furnishing heating or cooking fuel to the unit are treated as part of the mobile home. The definition of dwelling for mobile home insurance also includes built-in appliances, furniture and equipment furnished by a manufacturer or dealer as standard equipment or described in the certificate of origin or sales invoice and included in the value for which premium is paid. Replacements of the above equipment are also included as covered if they are a part of the structure at the time of the loss.
The causes of loss generally covered are fire or lightning, road transportation perils (that may occur while transporting the home to its intended site), theft/burglary, windstorms (including tornado, hurricane, cyclone or typhoon), hail, earthquake, landslide, flood, rain, sleet, snow, explosion, riot or civil commotion, vandalism, falling objects, smoke, vehicle damage, and breakage (windows or door glass).
Further, comprehensive coverage pays for loss of or damage to the mobile home when caused directly, suddenly and accidentally by any cause, collision or upset of the mobile home. Collision or upset coverage is often provided only as an option under many forms. When it applies, it responds to damage from the sudden physical contact of the mobile home with another object or upset of the mobile home. However, it does not include impact of the wheels of the mobile home with the road or surface upon which it is being transported unless such impact results in upset of the mobile home. If the insured has set up the mobile home permanently in a mobile home park, collision protection is likely unnecessary.
The mobile homeowners package policy insures structures and equipment that are attached or adjacent to the mobile home if the structure is related to the insured residence. Items that are commonly insured include awnings, shelters, cabanas, porches, water pumps, air conditioners, TV antennas and satellite dishes. Generally, to qualify for coverage, the items would have to be separately listed and described in the policy declarations. A separate insurance limit and premium charge would apply to each item. Adjacent structures and equipment are protected against the same causes of loss as the mobile home (with the exception of collision).
Under the package approach, adjacent structures are covered optionally for a separate charge, or their value is added to the mobile home’s value for a single insurance limit (and appropriate premium). Under the homeowners approach, such property is automatically covered according to an established certain percentage of the mobile home insurance limit.
Coverage for personal effects includes personal property owned, worn or used by an insured and usual or incidental to the occupancy of the mobile home as a dwelling. Not included in this coverage are any items insured under adjacent structures and equipment coverage.
There are several coverage extensions available. However, there is little standardization among insurers using the comprehensive approach of writing the package as opposed to the homeowners approach. Typical extensions include Additional Living Expense coverage; Fire Department Service coverage; Emergency Removal Service; Trees, Shrubs, Plants and Lawns coverage; and Debris Removal coverage. When covered under a mobile homeowners package policy, these extensions of coverage are included without an extra premium charge.
Mobile home insurers offer separate endorsements such as Vendors or Lienholders Single Interest coverage, Theft coverage and Trip Collision coverage.
For additional information on this topic, please refer to PF&M Section 480.4-2, Mobilehome Program Coverage Analysis in PF&M.