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Modular Versus Manufactured Home: What Type of Home Insurance Do You Need?

assembling a prefabricated house

Modular. Manufactured. Mobile. There are so many alternatives to the traditional brick-and-mortar home today! Figuring out the differences between each of them can be surprisingly tricky.

The challenge increases when you are trying to determine what type of home insurance policy you need to cover a manufactured home versus a mobile home versus a modular home.

In this post, we review each of these three popular home types and explain the differences between them. Then we talk about what type of insurance policy you need to cover the home you have or are considering purchasing.

3 Alternative Home Types: Modular, Manufactured, Mobile

Each of these three home types sounds quite similar at first glance. In fact, they do share some similarities.

Modular home

A modular home is a type of prefabricated home that is built first and then relocated to the home site.

This type of home is often created in two or more separate parts that are then joined together at the building site—hence the word “modular,” which means “parts.”

A modular home is typically situated on a concrete foundation that can accommodate a crawl space or a full basement.

For the most part, once a modular home is placed on a site, it cannot be moved and is treated just like a permanent home.

Manufactured home

A manufactured home is also a type of prefabricated home—that is, one that is built at a location other than the site at which it will be permanently placed.

But a manufactured home is typically built and transported in one piece rather than in separate modules. Here, the terms “double-wide” and “triple-wide” refer to the width of a manufactured home.

A manufactured home is constructed around a steel frame and sits atop concrete blocks or concrete or metal piers. A manufactured home can also be placed on a concrete slab as a permanent foundation. However, most manufactured homeowners prefer the former in case they want to move their home at a later date.

It is not uncommon for manufactured homes to have exterior additions such as stairs or ramps, porches or garages.

Mobile home

The term “mobile home” is sometimes used interchangeably with manufactured homes, RV or trailer. The former is what is meant in the context of home insurance.

A mobile home manufactured in Canada will have a CSA label. A mobile home manufactured in the USA will have a red HUD (Housing and Urban Development) label. These organizations govern manufacturing and safety standards for manufactured homes.

RV or Travel Trailer

Recreational vehicles are meant to be mobile. There are several different classes of RVs (A, B,C, etc.) describing different configurations of these vehicles.

What is important to remember here is that RVs and travel trailers are considered vehicles rather than homes. For this reason, you need a different type of insurance policy to cover an RV or travel trailer than what you need for a modular, manufactured or traditional mobile home.

Matching the Right Insurance to Your Home

The type of home insurance policy you need is related to two key factors: whether your home can be moved and the building code your home is built to conform to.

Modular home: standard homeowners insurance policy

Modular homes are typically constructed to comply with local or provincial building codes. For this reason, a modular home will usually be covered under the same type of homeowners insurance policy that a brick-and-mortar home requires.

Manufactured home: mobile/manufactured home insurance policy.

Manufactured homes, in contrast, are built to comply with federal CSA/HUD building codes. For this reason, they need to have a different type of homeowners insurance policy. This policy may be called a mobile home insurance policy or a manufactured home insurance policy.

Adjusting Your Coverages for Full Protection

Modern modular homes are often indistinguishable from traditional brick-and-mortar homes once set in place on their permanent site. Typically, homeowners insurance treats modular homes just like brick-and-mortar homes in terms of overall insurability.

The only adjustments you may need to make here will relate to personal coverage needs and preferences.

Manufactured houses are viewed a bit differently by potential insurers. Because the vast majority are not secured to a permanent foundation and retain wheels and a chassis to be moved at will, they are naturally less secure during inclement weather.

 

Weather events can potentially cause major damage or even total destruction to manufactured homes, which can raise annual premium rates for manufactured homeowners insurance. Similarly, since many manufactured homes carry less insulation than traditional or modular homes, pipes are more prone to freezing or exploding during extreme winter weather.

However, as a balancing factor, manufactured home structures also typically carry a lower overall valuation than permanent modular or brick-and-mortar homes. In other words, it generally costs less to repair or replace a manufactured home. This fact can help to offset the higher risk of damage or destruction.

There are also a number of optional safety features, such as hurricane straps or special skirting, that you can add on to help reduce the risk of storm or wind damage. These extra features can also help lower homeowners insurance premiums for manufactured homes.

Get in Touch

Do you own a mobile, modular or manufactured home or are you considering investing in one? Do you need expert guidance regarding the right type of homeowners insurance coverage? Our friendly, knowledgeable team of brokers can help!

Contact us online or give us a call at 888-853-5552.

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