Manufactured Homes: A Necessary Component for Your Agency

You’ve heard them called trailer houses … or mobile homes … or manufactured houses.

No matter what you call them, it’s a fact that one out of every five new homes sold today is a manufactured home. That, coupled with the fact that many site-built family dwelling programs are currently in turmoil (due to mold and many years of under-pricing), targeting manufactured dwellings makes a lot of sense for today’s agent.

Forget about the old opinion that manufactured homes aren’t a nice way to live, or are only a stepping stone to one day owning a site-built home. The fact is, in recent years, manufactured homes have become very upscale, with amenities like sunken living rooms, vaulted ceilings, huge master baths and gourmet kitchens—and can be obtained at a fraction of the cost of traditional dwellings. With features like this, manufactured homes are attracting the same types of people who live in site-built homes. Plus, the majority of owners are happy living in a manufactured home, and likely aren’t considering moving anytime soon.

According to the U.S. Census Bureau, over 273,000 manufactured homes were placed across the U.S. in 2000, with the bulk of those—nearly—178,000 landing on a lot in the South. The region with the next highest shipment of manufactured homes in 2000 was the Midwest with 46,000 placements, followed by the Western states, which gained over 35,000 new manufactured homes that year.

The latest statistics support that manufactured homeowners are really very similar to an average agent’s site-built customer—thus, the methods for attracting these customers to your agency are essentially the same. However, there is one big difference. Manufactured homes, because of their unique design, require different insurance coverages than site-built dwellings.

Most large mainstream standard companies wouldn’t consider insuring manufactured homes. And rightly so. Manufactured homes have characteristics not found with traditionally constructed dwellings. For example, because they were built in a factory, as opposed to being assembled on a construction site, they must be “mobile.” Therefore, ensuring a manufactured home remains secure to the ground when it is placed requires special technology. In addition, the roofs of many older manufactured homes are prone to leaks, and regular preventative maintenance is necessary.

Because of these and other unique requirements, companies specializing in manufactured home insurance coverages have developed policies specifically tailored to the owner’s unique needs. While it would be logical to assume that a standard homeowners policy would fit the bill (especially since so many newer factory-built homes now feature composite roofs and hardboard siding), policies do differ. For example, flood is covered under most specialty mobileowners forms in Texas, but not under the standard homeowners HO-B form. Over the years, manufactured home Lienholders have been reluctant to accept policies that exclude flood coverage, because many older mobile home parks were located in flood plains.

Today however, some of the more forward-thinking specialty companies have extended flood coverage on homeowners forms for manufactured housing. So, when an agent does business with these companies, he can now choose from a number of forms to best meet the customer’s needs.

As for prices, premiums for manufactured housing are higher than for traditionally constructed homes. However, although prices are rising, they are not increasing as significantly as they are in the traditional homeowners market.

Trailer houses, mobile homes or manufactured homes. Call them what you will, but the fact remains that too many people are buying manufactured homes these days for your agency to discount this large section of the housing market. If your specialty carrier offers a homeowners form on newer manufactured homes, it would serve you well to consider it. After all, the similarities between owners of manufactured homes and site-built homes are numerous—but the coverages required for those two groups are very different.

Ruth Peck is the Specialty Personal Lines manager for South & Western General Agency Inc. based in Addison, Texas. She has 27 years experience in the insurance business specializing in personal lines.

Topics Flood Homeowners Manufacturing