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A modular home can be an affordable way to get the custom home of your dreams in a location where on-site construction is difficult or prohibitively expensive. But just like with a traditional home, once you have your dream home, it’s important to protect it with homeowners insurance.
This is what you need to know about modular household contents insurance:
What is a modular house?
A modular house is a type of house that is built in a factory and then assembled at the final site. Modular homes are usually lumped together with mobile homes and prefab homes, but they’re quite different.
Modular homes are permanently attached to the foundation they are placed on and tend to be much larger. These houses consist of several parts that are transported separately and assembled on site.
Meanwhile, a mobile or prefab home is built to standards set by the United States Department of Housing and Urban Development (HUD) and is typically not permanently fixed to the site where it is placed.
Modular homes are a popular option for people looking for custom floor plans or architectural styles that can be difficult or expensive to build on site. They are becoming an increasingly popular option for sustainable and self-sufficient homes because they can be built in a factory with less waste than traditional site-built homes.
What type of homeowners insurance do I need for a modular home?
Modular home insurance is the same as for traditionally built homes. This means that you can choose from many types of home insurance depending on the level of coverage you need.
You might consider taking out one of the following policies:
- HO-1 (basic form): This policy provides basic coverage for certain named perils (events that can damage your home).
- HO-2 (broad form): An HO-2 The policy is similar to an HO-1 but covers more perils.
- HO-3 (special form): This is the most common policy and offers a higher level of coverage. It protects your home from all hazards except those specifically mentioned in your policy.
- HO-5 (full form): An HO-5 policy covers (almost) everything, but is also associated with higher insurance premiums.
What does the modular home contents insurance cover?
Modular home insurance has the same coverage as home insurance for traditionally built homes. What your specific home insurance covers depends on the coverage limits you choose and whether you add additional coverage through riders.
In general, your modular home insurance will cover most types of damage or loss due to accident, theft and catastrophe, with the exclusions being specifically stated in the policy.
Your household contents insurance is divided into six main types of coverage with different coverage limits. The six covers are:
- Apartment: The apartment cover applies to damage and destruction to the apartment itself.
- Other structures: Other building cover applies to anything on your lot that isn’t attached to your house, such as: B. a barn or a detached garage.
- Personal property: Personal property insurance applies to all of your personal belongings.
- loss of benefit: Loss of use coverage covers additional living expenses if your home is damaged due to an insured peril, such as a fire. B. a fire, becomes uninhabitable.
- Liability: Liability insurance protects you from lawsuits that may arise as a result of injury or property damage that you cause to others. For example, if someone slips and falls on ice in your driveway, liability insurance would help cover your legal costs.
- Medical Payments: Health insurance helps pay medical bills for someone who injures themselves on your property.
Good reading: Is Homeowners Insurance Required?
What does the modular household contents insurance exclude?
Modular home insurance has the same exclusions as standard home insurance. The specific exclusions for your policy depend on the options you select with your insurance carrier.
However, standard household insurance policies usually exclude damage caused by floods or earthquakes. You must purchase a separate policy or add special coverage through an insurance rider to protect your home from these disasters.
Other common exclusions in modular home insurance include damage from sewer backwater, damage from lack of maintenance, and damage from acts of war.
How much does a modular home contents insurance cost?
The average cost of modular home insurance is the same as the average cost of standard home insurance, which is $1,278 per year, according to the National Association of Insurance Commissioners. The amount you pay depends on your specific situation.
Factors affecting the cost of modular home insurance
Modular home insurance rates vary based on several factors, including:
- Location: In general, modular homes have higher insurance premiums in areas with high construction and repair costs. Homeowners in areas at high risk of disasters like wildfires and tornadoes can also expect higher costs. Modular homeowners in low-cost-of-living states typically pay less.
- Size/value of the house: Larger homes with improved finishes cost more to insure because they cost more to replace.
- Coverage Levels: If you choose a policy with maximum coverage and high limits, you will pay more than someone with less coverage.
- Deductible: A deductible is the amount you pay out of pocket before your insurance kicks in. The higher your deductible, the lower your premium. Make sure you actually have enough savings to cover your deductible before purchasing a high deductible policy!
Cash: How much does homeowners insurance cost?
Additional coverage options for modular homes
If your modular home has specialty products or systems that would be too expensive to repair or replace, consider insuring them with supplemental insurance or a home warranty.
The manufacturer of your modular home may have coverage options for you or maintenance plans that you can add when purchasing the home. They built it and will have the most knowledge on how to fix it if something goes wrong. If your modular home includes something like a water reclamation system or an entire house battery, a manufacturer’s warranty is a good idea.
If you live in an area prone to floods or earthquakes, purchasing a separate flood or earthquake policy is essential.
Disclaimer: All insurance related services are provided by Young Alfred.