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Regional Spotlight: It’s Getting Tougher to Insure Mobile Homes

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RISMEDIA, Oct. 12, 2007-(MCT)-Think it’s hard to find homeowners insurance for a single-family, site-built home?

Try finding coverage if you live in an older manufactured, or mobile, home.

Insurance companies aren’t excited about extending coverage to you — especially if you live in areas the insurers deem too risky. That generally means the state’s coastal areas, most vulnerable to damaging hurricanes.

Citizens Property Insurance still will offer coverage to owners of manufactured homes, but the state-backed insurer is one of the few that will, especially since some of the state’s larger homeowners insurers have rushed to reduce their exposure to properties vulnerable to dangerous storms.

Insurers such as State Farm, Nationwide and Allstate have reduced the number of homeowners policies they offer in the state; since 2006, insurance companies have announced plans to drop hundreds of thousands of policies.

Experts say some manufactured-home owners feel especially targeted — and are throwing up their hands in resignation.

“What we’re seeing is very discouraging,” said Jim Ayotte, executive director of the Florida Manufactured Housing Association. “More homeowners are starting to go without coverage. They’re taking calculated odds that a catastrophe is not going to occur.”

That’s dangerous, especially in Florida, where hurricanes and tornadoes may strike at any time during the six-month hurricane season.

So why might some of the owners of Florida’s 850,000 manufactured homes go without coverage?

“Our people are being canceled within five miles of the coast. They’re having difficulty finding insurance,” said Annabelle Closson, a board member and section director of the Federation of Manufactured Home Owners of Florida. Closson’s responsibilities as a section director for the organization include representing Central Florida homeowners.

And when they do find insurance, it’s expensive, said Closson — especially for older homes.
She said she had heard from manufactured-home owners who said they had found new coverage at a cost three or four times what they previously had paid.

One bright spot is that a few newer insurers are writing or are expected to write policies for manufactured homes.

Ayotte said he worries about how much of the market newer companies will be able to insure. Like other insurers, they must minimize their coverage in the riskiest areas to ensure that the premiums they receive are commensurate with the risk they take in insuring consumers in those parts of the state, he said.

Companies take a chance

But the new companies seem to think the state’s manufactured homes are worth the risk.
“We’ve always had good success with this type of risk,” said John Jerger, president of Modern USA, one of the new companies offering insurance to manufactured homes. Jerger’s family has been in the insurance business for 46 years, he said.

“It’s true that they do not fare as well in hurricane-type situations, but they tend to be very good risks from a daily loss standpoint,” Jerger said.

Modern USA is expected to begin writing policies Oct. 15, and will write at least 40% of its policies in manufactured homes.

“We expect to write total premiums in 2008 of about $30 1/8million3/8 to $35 million in premiums,” Jerger said. And there’s more good news for people who own manufactured homes — or want to own them. The homes built now are much sturdier than they would have been a decade ago.

That means it’s easier to find policies for them.

“It was simple,” said Philip Sweeney, who moved to the Deerwood manufactured home community in Orlando in July. The agent who sold Sweeney his home in the community off East Colonial Drive — where most homes were built after 2002 — arranged for him to have coverage through Citizens when he closed on his home.

But even though it was easy for him to find a policy for a relatively new manufactured home, and he said he has confidence in insurance companies, Sweeney, who moved to Deerwood from Orlando’s Waterford Lakes community, said he’s not sure what will happen if a devastating storm comes through the area.

“The proof is in the pudding when you have to make a claim,” he said.

When the state checked manufactured homes after the busy 2004 and 2005 storm seasons, it found that manufactured homes built after 1994 performed well.

“None of those homes built to that criteria suffered any major damage,” Ayotte said.

After Andrew

It was in 1992 that Hurricane Andrew blistered South Florida, leaving thousands of homes in ruins. Manufactured homes, in particular, suffered devastating damage; Miami-Dade County lost more than 90% of its mobile homes.

After the storm, state and federal officials insisted on hardier building standards for site-built and manufactured homes. For manufactured homes, some of the changes included improvements to how the frames of the homes are produced and how sturdy walls are, said Wendy Rose, a spokesperson for the Tampa-based Institute for Business & Home Safety.

But even on the hardened manufactured homes, there are some places that can cause danger. A house might be able to withstand the storm by itself, but it’s possible that aftermarket additions to the property could endanger the homeowner and home during a violent storm.

That’s because the additions, which could include overhangs or porches, may not be built to the same standards as the house, Rose said.

For homeowners, “it’s a matter of knowledge, understanding that these are your weak spots,” she said.

IBHS suggests homeowners make sure any aftermarket additions are properly tied down. Tying down the extras could even help the homeowners find insurance.

The insurers offering policies may offer discounted policies to owners of manufactured homes who engage in mitigation efforts — just as they do for the owners of single-family, site-built homes.
Another benefit to mitigation efforts for owners of manufactured homes: goodwill from the neighbors.

The parts of manufactured homes that aren’t tied down could become missiles during a storm, endangering nearby houses and businesses.

“We are each other’s keepers in the sense that if I’ve protected my home and someone else hasn’t, my risk is still there,” Rose said.

Copyright © 2007, The Orlando Sentinel, Fla.
Distributed by McClatchy-Tribune Information Services.

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