Manufactured home on permanent foundation insurance is otherwise called a modular home. A modular home is constructed in a factory before being assembled on a permanent site. Despite their distinct characteristics, modular homes are frequently confused with manufactured homes and mobile homes.
Most of the time, modular homes are much larger because they are permanently attached to the foundation they are built on. The components of these homes are transported separately and assembled on the spot.
A mobile or manufactured home, on the other hand, is constructed in accordance with HUD standards and is not permanently attached to the site it is placed on.
People who want custom layouts or architectural styles that can be difficult or expensive to build on site often choose modular homes. Because they can be constructed while producing less waste in a factory than traditional site-built homes
How Does a Modular Home Work?
In indoor facilities, modular homes are constructed off-site. Each house is constructed in sections, or modules, which are transported to a construction site where they are assembled with the assistance of a crane. A modular home, in contrast to a manufactured home, cannot be moved once it has been assembled.
The design, features, and construction of modular homes can be identical to those of traditional site-built homes. Modular homes can be on one level or have multiple stories. In fact, site-built and modular homes are constructed in accordance with the same building codes.
Manufactured Home On Permanent Foundation Insurance
If you own a modular home, you can purchase a standard homeowners insurance policy to protect your investment, according to the U.S. Department of Housing and Urban Development (HUD). A factory-built home constructed prior to June 15, 1976 is referred to as a mobile home, and one constructed after that date is referred to as a manufactured home
The coverages for modular homes are similar to those of traditional homes because there are no unique insurance risks. They are:
- Dwelling Coverage: If your home is damaged by an insured hazard such as a fire or windstorm, this coverage helps pay for the repairs or rebuilding. Your home’s physical structure is covered by the policy; any attached structures like a deck or garage and any appliances that are already there, like a water heater or furnace are also covered.
- Personal Property Coverage: This helps pay for personal property damaged by an insured hazard. Regardless of whether the property is in your home or another location, it typically covers theft and damage. For instance, insurance would cover the loss if your laptop was stolen while you were away on vacation (this would obviously depend on the policy).
- Liability Protection: If a household member is found liable for damage to someone else’s property or if a non-household member is injured at your home, this helps pay for medical bills and legal fees. Falls and dog bites are two of the most common causes of liability claims.
A modular home’s construction, transportation, installation, and completion are typically not covered by homeowner’s insurance. Consider purchasing a builder’s risk policy and ensuring that your modular manufacturer and builder are covered by adequate insurance, such as liability insurance and workers’ compensation.
What kind of homeowners insurance do you need for a modular home?
The most common type of homeowners insurance is an HO-3, or special form policy. Personal property and the home including modular homes are covered by this policy against all risks. An HO-3 policy covers your personal property at its actual cash value and your home at its replacement cost by default.
Since insurance policies on modular homes are similar to those of traditional homes, you can select from a variety of homeowners insurance policies based on your requirements for coverage.
You might want to look into purchasing one of the following policies:
- The basic form of HO-1: This policy only covers certain named hazards (events that can damage your home) at a basic level.
- HO-2, broad version: Similar to an HO-1 policy, an HO-2 policy covers more risks.
- Special form HO-3: This is the most prevalent policy and it offers greater coverage. It shields your home from all dangers, with the exception of those specifically mentioned in your policy.
- HO-5: Although an HO-5 policy covers almost everything, its insurance premiums are higher.
Your personal preferences, the specific risks to your property, and your risk tolerance all play a role in determining how much homeowners insurance you need.
Differences between modular and manufactured homes
Modular homes are delivered to the property in multiple pieces, built on a slab, crawl space, or basement while manufactured homes are delivered to the property in one piece, built on a metal frame, sometimes with wheels.
You will require a standard homeowners insurance policy if you live in a modular home. This is different from the kind of policy for a manufactured home, but it is the same kind of insurance you would get if your home was built the traditional way. This is because modular homes are treated in the same way that traditional site-built homes are by insurance companies, and their rates are the same.
During the process of obtaining a quote for homeowners insurance, State Farm and Farmers, for instance, do not even inquire as to whether your residence is a conventional or modular construction.
The cost of homeowner’s insurance for a typical modular home is comparable to that of a manufactured home.
Coverages for a modular home require the same protections as those for a conventionally built home when purchasing one. A modular home carries no special insurance risks, and you are also subject to the same risks.
You can get protection for your home, personal property, and liability.
Is modular home insurance less expensive?
Whether your home is manufactured or modular, neither is necessarily cheaper than the other when it comes to home insurance costs.
Variables in policy rates include:
- Your home’s value: If your manufactured or modular home is brand-new, you should already be aware of its value. Because they are more expensive to replace, larger homes with upgraded versions cost more to insure.
- The foundation: Depending on whether your home has a permanent foundation like a brick or block foundation or a pier and beam foundation, your rates may differ.
- Your home’s location: If you live in a region that experiences severe weather, your home insurance rates may be higher. Homeowners in areas with a high risk of natural disasters such as tornadoes and wildfires can anticipate paying a higher price. In states where the cost of living is low, modular homeowners naturally pay less. Also, insurance premiums will be higher for modular homes located in regions with high construction and repair costs.
- Your home’s year of construction: Your rates may vary depending on the year of construction. Regular maintenance issues like plumbing and electricity arise as a home ages. A discount for a new home may be offered by some insurance companies and premiums may increase as your home ages by some insurance companies.
- The amount of coverage: In most cases, you can choose how much personal property and liability coverage you want. You will pay more for a policy with maximum coverage and high limits than for one with lower limits.
- Deductible: The amount you’ll have to pay out of pocket before your insurance kicks in is called a deductible. Your premium will be lower if your deductible is higher. Before signing up for a high-deductible policy, make sure you actually have enough savings to pay your deductible!
Because every situation is unique, it is difficult to determine whether manufactured or modular home insurance policies are more expensive despite all of these considerations. Despite being built to last a lifetime, manufactured homes are frequently viewed as more vulnerable to damage because they do not have a foundation that is built to last, manufactured homes are more likely to suffer damage.
However, the cost of a modular home is significantly less than that of a manufactured home. Modular homes should be insured during the preparation and installation phases in addition to the usual insurance policies for standard homes.
If your home has special systems or products that are too expensive to fix or replace, you might want to add insurance rider or home warranty coverage for them.
When you buy a modular home, you may be able to add maintenance plans or coverage options from the manufacturer. When something goes wrong, they will have the most experience repairing it because they built it. A manufacturer’s warranty is a good idea if your modular home has features like a whole-house battery or a water reclamation system.
Purchasing a separate flood or earthquake policy is essential if you live in an area prone to both.
How much does insurance for modular homes cost?
The expense of modular home insurance is equivalent to the expense of standard home insurance which is $1,278 each year.
How to Get Modular Home Insurance
To get modular home insurance, contact your local insurance company. They can assist you in checking their coverage options and the ways in which discounts and bundling can lower your insurance costs.
You will need to provide specifics such as the year your modular home was built and the square footage, to a service provider. Note that you might need more insurance. For instance, your modular home may require flood insurance, which is not covered by standard homeowners insurance if you live in a flood zone with a high risk.
The most important point is that modular homes receive the same treatment as site-built homes. A standard homeowners policy will most likely be purchased if you want to insure a modular home.