Do you own a double-wide? Maybe you recently purchased a new one? Or perhaps you’ve lived in one for the past decade.
Many double-wide homeowners don’t know that they may have a few choices about how they insure their property.
Most double-wide homeowners are familiar with mobile home insurance. And mobile home insurance is a great product! It provides you with protection if something significant happens to your home.
However, some double-wide homeowners also have the option of purchasing a homeowner policy. If your double-wide sits on a permanent foundation, you may qualify for this option as well.
So, what are the differences between these two policies?
Do you have the option of purchasing either policy?
And, which one is the best choice for your double-wide home?
For the past 20 years, I have been selling insurance to residents in Greene County, PA. I’ve helped people put in place all kinds of coverages and place a high value on helping my clients decide which policy they can best afford and which one best meets their needs.
Often I get calls inquiring about homeowners insurance for double-wide homes that sit on a foundation. Maybe you have some of the same questions!
To give you a clear understanding of the differences between mobile home insurance and homeowners insurance, I’ve put together this short article.
In this article, you will learn:
- The differences and similarities of mobile home and homeowners insurance products
- Which companies sell these products to double-wide homeowners
- How these policies respond if you have to file a claim
- And what you need to consider before making buying your policy
Mobile Home Policy vs. Homeowners Policy
So what are the differences and similarities between a mobile home policy and a homeowners insurance policy? Let’s compare these products.
Cost of the Policy
A mobile home insurance policy will cost less than a homeowners insurance policy. Typically, you can expect to pay $300-$400 per year for a mobile home policy, while a homeowners policy is going to cost $600-$800 annually.
If wind, fire, hail, or any other peril listed on your policy damages your double-wide home, both mobile home insurance and homeowners insurance will pay for the damages.
However, the amount they will pay will depend on the type of policy you have in place.
This means that if the wind blows siding off of your double-wide, both a mobile home policy and a homeowners policy will have coverage in place for that kind of damage.
Actual Cash Value vs. Replacement Cost
The most significant difference between a mobile home policy and a homeowners insurance policy is how the insurance company determines your home’s value.
With a mobile home policy, the insurance company uses the actual cash value to determine what your home is worth. Actual cash value means how much your home is worth at the moment the damage happens. Actual cash value accounts for depreciation.
So, if you buy a double-wide for $200,000, after ten years, the insurance company may value your home at $100,000 – meaning at that time, your double-wide is only worth $100,000.
That means if you lose your double-wide due to a fire or some other peril, the insurance company will only pay you $100,000 for the loss.
With a homeowners policy, the insurance company values your home according to its replacement cost.
Replacement cost means how much it would cost to reconstruct your home exactly as it is with the same materials, at the same quality, in the same place.
So, if you buy a double-wide for $200,000, after ten years, it may cost $250,000 to actually replace your home. In this case, the insurance company would base your premiums and limits on the amount it costs to actually replace your home.
This means if you lose your double-wide due to a fire or some other covered peril, the insurance company will pay you $250,000 to actually replace your mobile home.
Amount of Coverage
This is another area that mobile home insurance and homeowners insurance differ greatly. This is directly related to how the insurance company value’s your home.
Because a mobile home policy values your home at its actual cash value, the limits on your policy will be less than they would be on a homeowners policy.
If the actual cash value of your home is $100,000, the amount of coverage you have for damage or replacement would be less than if your home is valued by its replacement cost value.
And because coverage for the contents of your home or any other structures on your property is also determined as a percentage of what your home is valued at, a mobile home policy will typically have lower limits for this coverage.
Which insurance companies offer homeowners insurance for a double-wide?
Not all insurance companies that write homeowners insurance will sell a homeowner policy for a double-wide. However, SafeCo., Keystone National Insurance, and Farmers Fire all have homeowners programs for double-wide homes.
To qualify for a homeowners policy for your double-wide, these companies require your home to sit on a permanent foundation. This foundation can be poured concrete, a basement, a block foundation, or a poured block crawl space.
They also require your double-wide to be under 20 years old.
Some of these companies also offer auto insurance and other insurance products that you can bundle with your homeowners policy.
Which insurance companies sell mobile home insurance?
Some insurance companies do not offer mobile home insurance as one of their products. The companies that Baily Insurance uses for mobile home coverage are Keystone National Insurance, Farmers Fire, and Foremost.
These companies also offer auto insurance and other insurance products that you can bundle with your mobile home policy for a discount.
If your double-wide home sits on posts and piers, you will need to purchase a mobile home policy. You can also buy this policy if your home is on a permanent foundation.
My double-wide home sits on a concrete foundation. Which product should I choose?
This is a great question! There are definitely some considerations to help you make a wise decision about the type of policy you choose.
While a homeowners policy will cost you almost twice as much as a mobile home policy, it will also give you significantly more coverage. To understand this better, let’s consider this claim scenario.
A Claim Scenario
Let’s say that the wind damages your double-wide home during a terrible storm. Several sheets of siding are blown off, allowing the rain to seep into your kitchen. The cabinets end up needing to be replaced along with the ceiling and some of the flooring.
Suppose you have a homeowners policy that valued the replacement cost of your double-wide. In that case, your insurance company will determine the replacement cost of the cabinets, ceiling, and flooring are to repair your home to the condition it was in before the wind damage occurred.
The insurance company may determine it will cost $30,000 to replace the cabinets, flooring, and ceiling. This will be the amount they pay you to repair your home.
The insurance company will also pay more toward your living expenses. While your home is being repaired if unlivable, this will allow you to stay in a hotel or rent a temporary apartment.
Now, let’s imagine that same scenario with a mobile home policy in place. If you have a mobile home insurance policy for that same double-wide, your insurance company will determine your home’s actual cash value – again, that means what you could sell it for at that moment.
When they come to appraise the damage done to your kitchen, they will not be evaluating the replacement cost of those cabinets, the flooring, and the ceiling. They will determine what the cabinets, ceiling, and flooring are worth at that moment.
In this same scenario, the insurance company may only determine their value to be $2,000 when they were damaged. In this case, you will only be receiving a check of $2,000 for the repair of your kitchen.
You can also expect the insurance company to pay less toward alternative living arrangements while you wait for your home to be repaired.
If you can afford a homeowners policy, you will find that it provides you with more coverage if something major happens to your home.
I’m still not sure what I should purchase. What else should I consider?
Like all insurance decisions, determining if you should purchase a homeowners policy or a mobile home policy is a personal decision. It comes down to these three things:
- How much can I afford to pay for my insurance policy?
- How much can I afford to pay if my home experiences significant damage?
- How much do I value peace of mind?
If you would like a trusted advisor to help you determine the best option for insuring your home, I’d invite you to give us a call.
Our personal insurance team has over 30 years of experience and is committed to helping our clients understand their options and decide on a policy that best suits them.
Our team will price out multiple policies at a time from multiple insurance companies – giving you several options.
It only takes a few minutes to get the ball rolling and find the policy that will give you the protection you want at a price you can afford.
Give us a call today!