PERSONAL FINANCE

The Price of PROTECTION

HERE’S WHY IT COSTS MORE TO INSURE A MANUFACTURED HOME

BY STEPHANIE BOUCHARD

If you’ve recently purchased a manufactured home, getting homeowner’s insurance for your new abode may have come as a shock. Even though manufactured homes cost less than stick-built homes and both appreciate in value, in most cases, homeowner’s insurance premiums for manufactured homes cost more for less robust coverage.

A lot of factors go into the cost of homeowner’s insurance and the coverage offered, said Heather Kinney, an insurance agent and manager of BroGue Insurance and Financial Services in Bangor. Those include how old the manufactured home is, what condition it is in, its geographic location and whether it’s located in a mobile home park or on its own land, and whether it’s affixed to a foundation or still has its axles and wheels.

Doing an internet search on “why the #$@!! is homeowner’s insurance for manufactured homes so expensive” will net you a plethora of explanations from insurance companies, the manufactured home sector and media outlets, all of which will tell you that insurance companies consider manufactured homes a greater risk than site-built homes.

Why? Because 1) the quality of building materials used in manufactured homes is not as good as for site-built homes; 2) there is greater risk of damage from fire, wind and broken pipes, among other things; and 3) there are more theft claims for manufactured homes than for stick-built homes.

Molly Boyle, a representative of the Manufactured Housing Institute, a national trade organization representing the factorybuilt housing industry, said that it’s “not true” that manufactured homes are built with inferior building materials.

“Manufactured [homes] are built to a federal building code and the same materials are used in manufactured homes as site-built homes,” Boyle said.

However, the construction methods of mobile homes decades ago are still being held against modern manufactured homes. (The terms mobile home and manufactured home are often used interchangeably, but these structures are different.)

While manufactured homes built after June 15, 1976 had to be built in the U.S. Department of Housing and Urban Development standards, those built prior to June 1976 (called mobile homes) did not. Mobile homes, then, were arguably built with inferior materials. Manufactured homes, which are buildings built after June 15, 1976, however, must meet exacting federal building standards.

“Mobile homes nowadays are built a lot better than they used to be,” said Kinney, who has been involved in the insurance industry for more than 30 years. “Mobile homes didn’t have as high standards like they do now, but a lot of insurance companies that will write mobile homes, they do treat them differently than a stickbuilt home. … It’s almost like the insurance companies haven’t gotten with the times.”

When seeking homeowner’s insurance for manufactured homes, then, Kinney said, it’s important for owners to work with their agent to shop the very few insurance companies that offer coverage for manufactured homes, and to thoroughly understand what level of coverage is being offered.

Turn to the state’s insurance bureau for additional resources, such as the bureau’s purchasing tips and its Guide to Homeowner’s Insurance, to have insurance concerns addressed.