Modular Manufacturing: Insurance Necessity?

Modular homes are typically covered using the same kind of policy as a regular house and aren't eligible for mobile home coverage. This is because modular homes are built to the same building standards as site-built homes. Therefore, if you own a modular home, you can buy a standard homeowners insurance policy. However, it is important to note that homeowners insurance usually doesn’t cover a modular home while it’s being built, transported, set, and finished. Hence, it is recommended to ensure that your modular manufacturer and builder have adequate insurance and consider buying a builder’s risk policy.

Modular homes are typically covered by standard homeowners insurance policies

The coverages needed for someone buying a modular home are the same as those required for a conventionally built home. These typically include dwelling coverage, personal property coverage, and liability protection.

Dwelling coverage pays for repairs to the structure of the home, including damage to walls, the roof, and internal systems like wiring and plumbing. Personal property coverage pays for repairs or replacement of personal belongings that are damaged or stolen, while liability protection covers medical and legal expenses for others. For example, if someone is injured on your property or sues you for libel, you would make a liability claim.

It is worth noting that homeowners insurance usually does not cover a modular home while it is being built, transported, assembled, or finished. Therefore, it is important to ensure that your modular manufacturer and builder have adequate insurance, including liability insurance and workers' compensation. You may also want to consider purchasing a builder's risk policy.

Manufactured homes require a different type of insurance policy

Modular homes are typically covered by the same insurance policies as traditional homes built on-site. This is because modular homes are usually constructed to comply with local or provincial building codes. Modular homes are often indistinguishable from traditional homes once they are assembled on-site.

However, manufactured homes require a different type of insurance policy. This is because they are built to comply with federal CSA/HUD building codes. Manufactured homes are also not secured to a permanent foundation and retain wheels and a chassis, making them less secure during inclement weather.

Manufactured homes are more susceptible to damage from weather events, which can result in higher annual premium rates for insurance. They also tend to have less insulation, making pipes more prone to freezing or exploding in extreme winter weather. However, manufactured homes typically have a lower overall valuation than modular homes, which can help offset the higher risk of damage.

If you own a modular home, a standard homeowners insurance policy should suffice. This will cover dwelling, personal property, and liability protection, as well as any add-ons such as umbrella insurance or extended coverage for valuables.

If you own a manufactured home, you will need a special policy designed for manufactured and mobile homes. This type of policy may be called a mobile home insurance policy or a manufactured home insurance policy.

Modular homes are built off-site and assembled on-site

Modular homes are built off-site in indoor facilities and then assembled on-site. Each home is built in sections (modules) that are transported to the building site and put together, usually with the help of a crane.

Modular homes are constructed in a factory setting, with up to 80% of the work completed before being transported on flatbed trucks to the site. Once there, each section is assembled together, and the house is connected to power and water. Modular homes are built to the same standards as site-built homes and are often indistinguishable from them. They can be customised to the home buyer's specific location and climate and can be single-level or have multiple stories.

The process of building a modular home is more efficient than traditional site-built homes. The foundation and the home can be constructed simultaneously, and the controlled indoor environment means weather is less likely to cause delays. Modular homes are also more cost-effective than site-built homes due to the reduced labour costs and bulk purchasing of materials.

In terms of insurance, modular homes are typically covered by standard homeowners insurance policies, the same as traditional site-built homes. This is because modular homes do not present any specific insurance risks. However, it is important to ensure that the modular manufacturer and builder have adequate insurance during the construction process.

Manufactured homes are built in factories and sit on a movable chassis

Manufactured homes are built entirely in factories under a federal building code administered by the US Department of Housing and Urban Development (HUD). They are constructed according to the HUD's Manufactured Home Construction and Safety Standards, which came into effect on June 15, 1976.

Manufactured homes are typically built and transported in one piece, constructed around a steel frame, and sit atop concrete blocks, concrete, or metal piers. They can also be placed on a concrete slab as a permanent foundation, although most homeowners opt for the former to retain the option of moving their home in the future.

Manufactured homes are commonly referred to as "mobile homes" and are usually one story, although they come in several sizes, including single-wide, double-wide, and triple-wide. They are often marketed as an inexpensive form of housing and can be set up and left in one location for long periods or even permanently installed.

Due to their lower cost and tendency for their value to depreciate more quickly than site-built homes, manufactured homes have historically been associated with lower-income families and have faced prejudice and zoning restrictions. They are also viewed as less secure during inclement weather and more susceptible to damage from events such as hurricanes and extreme winter weather.

However, modern manufactured homes are built to higher standards, with improved energy efficiency and resilience to wind, seismic forces, and moisture penetration. They can also be customised with optional safety features, such as hurricane straps or special skirting, to further reduce the risk of storm or wind damage.

Modular homes are treated like traditional homes by insurance companies

Modular homes are typically covered by the same insurance policies as traditional homes. Modular homes are built off-site in indoor facilities and are then transported to a building site and assembled. They are often indistinguishable from traditional homes in design, features, and construction and are built to the same building standards.

Modular homes are usually situated on a concrete foundation that can accommodate a crawl space or a full basement. Once a modular home is placed on a site, it typically cannot be moved and is treated just like a permanent home. Because of this, modular homes are covered by standard homeowners insurance policies, the same as traditional homes.

The coverages needed for someone buying a modular home are the same as those for a conventionally built home. There are no special insurance risks for modular homes, but they are also not exempt from anything. Coverages available include dwelling, personal property, and liability protection, plus any add-ons such as umbrella insurance or extended coverage for valuables.

Home insurance prices vary depending on factors such as the value of the home, the foundation, the location, the year the home was built, the amount of coverage, and the deductible. However, modular homes are generally treated the same as traditional homes by insurance companies.

Frequently asked questions