How Modular Homes Are Insured

  • Modular homes are typically insured with the same kind of policies as traditional homes.
  • Modular-home insurance offers coverage for your dwelling, personal property, liability, and loss of use.
  • Manufactured or mobile homes are insured with policies that factor in their increased risk of wind and other damage.
  • Read more stories from Personal Finance Insider.

Buying a home is a major investment, and homeowners insurance is crucial to protecting it. If you’re house hunting and considering a property that’s described as a modular home, you may be wondering how that’s different from a traditional home and whether that affects the insurance requirements. Modular homes are typically insured like regular site-built homes. They aren’t like manufactured or mobile homes, which are insured with policies that account for the different types of risks that come with those. 

What is a modular home? 

Modular homes look very similar to traditional homes, and insurance providers will usually insure both types in the same way. The difference between a traditional home and a modular home is that a modular home is typically built in pieces at a factory that are assembled at the construction site, while a traditional home is constructed from the ground up at the site. 

Modular home vs. manufactured home

Insurance companies may also cover manufactured homes. Don’t confuse modular homes with manufactured homes. These dwellings are very different. Modular homes are permanently built on a foundation. A manufactured home (often referred to as a mobile home or trailer) can be relocated by the owner. 

Modular homes and manufactured homes are constructed to different standards. The primary difference between the homes is that a modular home is built to meet the same building codes required for on-site homes. In contrast, manufactured homes are built according to rules set by the US Department of Housing and Urban Development (HUD), which require them to be constructed on a permanent chassis.

Types of coverage a modular home needs 

Several types of coverages come with your modular home coverage: 

Dwelling coverage: Covers the cost to repair or rebuild your home. It covers damage from events like fire, storm, or theft. Standard HO-3 homeowners insurance is the most comprehensive dwelling coverage.  

Personal property coverage: This protects your personal belongings and home furnishings. It covers damage and loss due to theft, fire, lightning, hail, and vandalism. 

Liability protection: This type of coverage will protect you if someone gets injured on your property or sues you for damage to their property.

Loss of use coverage: This coverage will help you with expenses if your house becomes temporarily uninhabitable. 

Additional types of coverage:  Depending on your situation, you might opt to get additional coverage like flood insurance or earthquake insurance. 

There are some limits to your modular-home insurance coverage. It usually doesn’t cover damage from flooding, earthquakes, or wear and tear. However, you can get additional coverage to protect your modular home further, says Wendy Cammet, head of specialty lines property product at Farmers Insurance.

How to insure a modular home 

To insure a modular home, contact your local insurance provider. They can help you understand their coverage options and ways you can reduce your insurance cost through discounts and bundling, says Cammet. 

When speaking to a provider, you’ll need to have details like the year your modular home was built, and your home’s square footage. You might need additional coverage, so keep that in mind. For instance, if you live in a high-risk flood zone, your modular home may require flood insurance which is not covered by standard homeowners insurance. 

The main takeaway is that modular homes are typically treated the same as a site-built home. If you are looking to insure a modular home, you’ll most likely purchase a standard homeowners policy.