Why is Manufactured Home Insurance More Expensive?

Why is Manufactured Home Insurance More Expensive?

A standard home insurance policy and manufactured home policy have very few differences besides cost.  Which poses a good question:  Why is manufactured home insurance more expensive?  A lot of people wonder why insurance for a manufactured home is so much more costly than insuring a stick built home.  After all, manufactured homes are typically less expensive to buy.

Before we dive into the answer, we are going to start by looking at what insurance is.  Insurance is a transferring of risk.  For example, you may not want to risk your house being destroyed in a fire and having to come up with money to rebuild it, so you may choose to pay an insurance company to take on that risk for you.  In exchange for an annual premium, the insurance company will provide you with an insurance policy to cover your home in the event of a loss.

Since insurance is a transfer of risk, you can imagine that a bigger risk means a higher premium.  Here is where manufactured homes come into the picture.  Statistics show that manufactured homes prove to be higher risk.  Why, you might ask?  Manufactured homes have an increased number of damage claims and theft claims; which we will elaborate on below.  There are additional factors that make manufactured homes more costly to insure, but these are main ones that we are going to discuss.

Increased Risk of Damage – although manufactured homes are being built more structurally sound, they still have a greater risk for damage.  Let’s take a look at a few examples.

  • Fire Damage:  Although a manufactured home is not more likely to catch on fire than a stick built home, it is more likely to have a greater amount of damage done to it as a result of a fire.  Studies show that a fire in a manufactured home will spread more quickly resulting in an increased amount of damage.  For fire safety tips in manufactured homes please visit the National Fire Protection Association’s website.
  • Wind Damage:  Manufactured homes are lighter than stick built homes and are more likely to be affected by wind damage.  Some states and counties that experience high winds even require manufactured homes to be securely tied down to prevent them from tipping over.
  • Broken Pipes:  Manufactured homes are typically not insulated as well as stick built homes posing a higher risk of pipes freezing and then breaking or leaking.  If you have experienced frozen pipes, Foremost provides some tips on safely thawing them out.

Increased Risk of Theft Claims – Manufactured homes tend to have more theft claims than stick built homes.  This may be caused by locations, whether your manufactured home is out on acreage making it easier for a burglar to sneak in and out un-noticed or maybe your manufactured home is in a higher crime location.  These are a few possible explanations for the increased number of theft claims for manufactured homes.

 

7 thoughts on “Why is Manufactured Home Insurance More Expensive?

  1. rachel

    this is a load of crapola. I work for a national emergency repair service and I can tell you we are called out to so-called executive homes way more often than to a non-site built home. it’s just an excuse to charge people more for insurance. today’s manufactured homes are built just as well, and in many cases better, than site built.

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  2. PJ

    You are so right! Manufactor homes are no less of a home than stick built in fact the news ones are better! it’s unfair that they charge more monies when we pay county taxes the same as any other home the high taxes depending on the value of the home which can be as high as any other home if you care about your home and up grade. why don’t we get a break on taxes if our house is not as good !

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  3. Shelbelle

    When you purchase a manufactured home they don’t tell you that you are going to get screwed on insurance. Mine has no wheels, was set on foundation, CANNOT move and was made with the same building specs as a stick built home, yet insurance is higher and choices for homeowners insurance is limited by being defined as a “mobile home.” Yet, nobody in the industry seems to care.

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  4. suzanne mechkowski

    No one tells you that when you buy a manufactured home all of the problems that occur with insuring it or refinancing the home. My home is built just as well if not better than a stick built home. Most of my walls are drywall, wood floors and tile. There are no axels, set on a foundation and will not to anywhere. It is supposed to withstand winds of over 150 miles per hour. Some of the more poorly built houses now will not do that. Anything to make more money out of people who decided not to have a hundred contractors and just one place making the home.

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  5. Deborah McCauley

    I think we need to start writing our congressmen. I agree. It’s a racket. I bought my house in 2009 and have never had a claim. And I just put a $7500 metal roof on. Not only is the insurance high, the coverage is low. They won’t even pay out enough to cover a total loss if you include all the renovations.

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  6. Elliot Berman

    Your comments are all somewhat correct. Insurance is determined by determining the “average of loses” for a particular class of home. Since there are so many variables, including age, those of you with newer homes are being averaged with those that are not made as well and had a higher rate of the loses mentioned. Many people pay less for homeowners insurance if their home is made of masonry block, than those homes made of wood frame. it also depends on the state, and county you live in, because of past related weather risks.

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  7. L. Yedowitz

    I agree with these homeowners. My manufactured home was built in 1993 and it was definitely built stronger and better than the stick built home we use to live in. Our manufactured home is half the size of our former stick built home but the insurance is twice the cost of the manufactured home. We have never had any claims and have not had any damage to our home. It too is on solid platform and not movable and on an acre in the country. This home is much more efficient for a retirement home, but the insurance is ridiculous.

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