When protecting your home, understanding the differences between modular vs. manufactured home insurance is essential. While both types of homes offer affordability and convenience, the insurance requirements for each differ due to their construction, location, and associated risks. Knowing these differences will help you decide to protect your property, whether you're buying a new home or looking to update your current policy.
Insurance for Modular Homes
Modular homes are built in sections at an off-site facility and then transported to a permanent foundation, where they are assembled. Modular home insurance is similar to standard homeowners insurance because these homes meet the same building codes and standards as traditional site-built homes. Typically, modular homeowners purchase HO-3 insurance policies, which provide coverage for the dwelling, personal property, and liability.
The advantage of insuring a modular home is that it qualifies for the same coverages and endorsements available to any other home on a permanent foundation. Whether it’s protecting your home from fire, theft, or storm damage, your modular home will be covered by standard homeowners insurance policies. These policies usually cover your home at its replacement cost and your personal belongings at actual cash value.
One thing to note is that modular home insurance typically doesn’t cover your home during the construction or transportation phase. If you're building or moving a modular home, it's crucial to ensure your builder has adequate insurance or consider purchasing a separate builder's risk policy for added protection during construction.
Insurance for Manufactured Homes
Unlike modular homes, manufactured homes are built on a movable chassis and usually stay on a rented lot or private property. This unique construction leads to different insurance needs, typically requiring a specialized policy like an HO-7. Manufactured home insurance also provides dwelling, personal property, and liability coverage, but it is designed specifically for the unique risks associated with these homes.
Manufactured homes, often called mobile homes, face higher risks due to their construction. They are more vulnerable to wind, theft, and fire damage than modular or site-built homes. For this reason, manufactured home insurance is generally more expensive. Additionally, if the manufactured home is not on a permanent foundation, it could be subject to further depreciation, which insurers consider when determining premiums and coverage limits.
Insurance for manufactured homes also has its limitations. For instance, most policies do not cover the home while moving from one location to another. If you're planning on relocating your manufactured home, purchasing additional transit coverage is essential.
Key Differences in Coverage
The main distinction in modular vs. manufactured home insurance lies like the homes themselves. Modular homes, assembled on permanent foundations, are insured similarly to traditional homes with comprehensive coverage options. Because of their mobility and higher risk of damage, manufactured homes require a specific insurance policy tailored to their needs.
Another difference is in the pricing and coverage limits. Manufactured home insurance tends to be more expensive and offers less flexibility due to the increased risk factors. On the other hand, modular homes benefit from being treated like any other standard home, often with more customizable coverage options and lower premiums.
Our manufactured home communities offer a range of affordable housing options, and we work closely with homeowners to ensure they have the right resources to protect their investments. From helping you understand your insurance needs to guiding you in making a down payment for manufactured homes, Cambio Communities supports you in every step of homeownership.