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Do I Need Mobile Home Insurance?

April 16, 2012 | Comments: 0 | Views: 345

Whether you have owned a mobile home insurance policy before, currently, or are thinking about purchasing one, there are a few things to keep in mind. Some people think that because a mobile home is cheaper to buy, they do not need to spend the money on an insurance policy to protect their interest. This couldn't be further from the truth.

The common misconception is that most insurance companies do not cover mobile homes. There are a few that don't, but most offer policies or refer you to a company that can issue a policy. The big nationwide insurance companies do offer policies to mobile home owners. Some smaller local insurance companies may have difficulty in such a small market.

ACV (Actual Cash Value) or Replacement Cost? These are the two options that you will have to choose between.Surprisingly, most people end up with an ACV policy. This is bad news for the policy holder.

ACV policies take into account depreciation of the home when it comes time to pay out for a claim. If your home is 15 years old, they depreciate the estimate to repair your home by 15 years and give you the balance less your deductible. I have personally seen countless policy holders receive as little as 30% of the cost of the estimate. The insurance company will then expect the policy holder to pay the difference. This is pretty common since ACV policies are rather inexpensive to buy and people are often misled into a false sense of protection.

When confronted with the choice, choose a Replacement Policy. Though this type of policy is significantly more expensive, you will not receive less than what it will cost to repair damage in the event of a claim, only less your deductible. Consider it a forced savings account. This policy is more common with site-built homes or mobile homes that are on property that you may own instead of rent/lease.

What does a mobile home insurance claim cover? A typical insurance claim that was caused by a broken water pipe would cover the damage to the home and your property as a result from water damage. The repair to the pipe would not be covered because it is considered home maintenance. This repair would be paid for by the home owner. Another example of what a claim may or may not cover is a leaky pipe. Any damage that would result from the leaking pipe would NOT be covered. Insurance companies only cover sudden and accidental occurrences. Items that are "leaking" are considered lack of maintenance and fall under the home owner's responsibility.

For a recommendation or information visit, Kettle Moraine Manufactured Housing, Inc.

Source: EzineArticles
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