Manufactured Homes

Manufactured homes are built in a factory using various floor plans with all the necessary amenities such as plumbing, electric, and gas. The facilities building the homes are climate-controlled and homes are built according to the HUD code, which sets strict standards for building manufactured homes. They come in 3 sizes: single, double, and triple sections, which range from under 1,000 to more than 2,000 square feet.

So those old homes on wheels are just that: older models made before the code changes were in place. Because of the mobility factor, the wheels are not removed, but they are covered by side skirts on the bottom of the dwelling.

A manufactured home may have a number of different types of foundations, including pier and beam, runner, slab, crawl space, and even basements. Some foundations are considered permanent; these foundations must be constructed of concrete, mortared masonry, or treated wood and have attachment points that anchor and stabilize the home to the underlying soil or rock. Those foundations must be developed according to the HUD code for manufactured homes or a licensed professional engineer. Non-permanent foundations such as pier and beam, runner, and some slab foundations make it possible for the owner to relocate the home in the future. What makes a slab foundation impermanent is how the home is anchored to it.

Modular Homes

Modular homes are similar to manufactured homes in that they are constructed in a facility and then transported to their final location. Modular homes are built according to state and local building codes, similar to site-built homes, instead of the national HUD code for manufactured homes. The codes can vary by state, county, city, or even township of the final destination. Modular homes are often delivered in 2 or more pieces, are typically built on crawl spaces or basements, and usually look like stick-built homes in size and features. Mobile and manufactured homes typically require a license tag that must be renewed every year because they can be moved or relocated.

Some states have specific requirements as to a modular home’s appearance, including minimum roof pitch, length of overhang, and foundation wall requirements. Others may require a modular home to be permanently installed without a steel frame, while other states may allow on-frame foundations and lower pitched roofs.

Taxes and Risks

When a manufactured home is first purchased, sales tax applies in many states if the home is sold as personal property. Often, they are sold as personal property at the initial purchase, before they are placed on the lot. Once the home has been placed on the lot, if the owner sells the property it is then often sold as real estate instead of personal property. States vary on the application of sales tax and how sales of manufactured homes are handled.

Because of the portable and lightweight nature of manufactured homes, wind poses a significant hazard. Hurricanes and tornadoes typically cause significant damage to manufactured homes. High winds can easily flip or severely damage a manufactured home. Therefore, tie downs or straps are required to keep the home stable. Some manufactured homes, depending on the foundation used, also need skirting in order to prevent the wind from getting underneath the home and causing uplift.

Tie-downs

There are two types of tie-downs: over-the-top straps and frame anchors. Over-the-top straps do just that: lie over the siding and roof of the manufactured home. The straps are then attached to frame anchors which are rods driven into the ground. This is how the straps provide stability and prevent wind damage to the home. Many newer homes can use frame anchors alone because their construction is superior to older models. These frame anchors tie to the chassis for stabilization; because of better construction, they do not need the over-the-top tie-downs. When over-the-top tie-downs are used, roof protectors are placed under the strap at the edge of the roof. These protectors both protect the roof from damage from the straps and prevent the roof from cutting through the edge of the straps. Carriers may require a specific type of tie-down for a particular part of the country.

ISO offers tie-down credit for a mobilehome with approved tie-down protection. The tie-down can be chassis only, over-the-top only, or over-the-top and chassis.

Wind zone ratings indicate how much wind a manufactured home can withstand. Zone III requires the strongest tie-downs and tends to be in Florida and Louisiana because of the risk of hurricanes. Zone III can sustain winds of 110 mph; Zone II can sustain 100 mph winds; and Zone I can withstand 70 mph winds. The rating appears on the HUD tag that provides the serial number, roof load, wind load, floor load, factory installed equipment, construction date, code in effect at time of construction, and other information.

ISO Coverage

While technically they are manufactured or modular homes, ISO still refers to the coverage as mobilehome coverage. Mobile homes are not eligible for a homeowners policy with Coverage A through ISO, although dwelling contents may be covered. Endorsement MH 04 01, Mobilehome Endorsement, must be attached to the homeowners policy in order for the mobile home to be covered. The endorsement redefines "residence premises" to include the mobile home and other structures on the land owned or leased by the insured, and which is shown as the “residence premises” in the declarations. The form provides coverage for the home shown in the declarations that is used principally as a private residence. The coverage includes structures and utility tanks attached to the home and permanently installed items such as floor coverings, appliances, dressers and cabinets. Coverage also exists for materials for repair, construction or renovation that are next to the home. Because the home is moveable, if it is threatened by a covered peril and removal is necessary to avoid damage, up to $500 is covered for the removal and return of the home with no reduction for deductible. This results in a homeowners policy that has been slightly modified to fit a mobile or manufactured home.

Limits for other coverages are percentages, like they are in the homeowners policy. Coverage B is 10% of Coverage A with a $2,000 minimum; Coverage C is 40% of Coverage A; and Coverage D is 20% of Coverage A. If 10% of Coverage A is less than $2,000, then a minimum of $2,000 is provided for those other structures.

In order to be eligible for coverage, the home must be designed for portability and year-round living, and be no less than 10 feet wide and 400 square feet in area. The homes are considered to be frame construction.

Because mobile homes are just that–mobile–ISO also has an endorsement for moving the home to a new location. The MH 04 03 Transportation/Permission to Move allows the insured to schedule an amount of coverage for the home while it is in transit. Coverage is for “collision,” which is defined as an impact with an object, the same definition that appears in the auto policy. As long as the collision happens while the vehicle is being transported, there is coverage. Not covered is a loss caused by the home making contact with the transporting vehicle that results in damage to the home unless the transport vehicle was in an accident. The coverage applies for thirty days from the effective date on the endorsement. Coverage also includes upset of the home while it is in transit or stranded, or sinking if the home is on a licensed ferry line. A separate deductible is scheduled on the endorsement. Many other endorsements are particular to certain states. Deductible options are $100, $250, or $500. The company transporting the home will have its own coverage for liability for any damage to the home caused by the company while in transit or while being installed at the new location.

Manufactured and modular homes have their own quirks and coverage needs. While ISO has endorsements that modify the homeowners policy, there are carriers that specialize in writing policies for mobile homes and the coverages they need.

Includes copyrighted material of Insurance Services Office, Inc., with its permission.