Mobile Home Insurance – Why You Need Its Coverages

Special mobile home owners policies are available that cover personal property and liability coverage exposures as well as offering coverage similar to automobile insurance: collision and comprehensive. Mobile home policies are not standardized, so they might include coverage for awnings, porches, air conditioners, and other equipment you add after purchase, or these might be considered additional coverages for which you will be charged a higher premium.

Some big insurance companies will write mobile home insurance, usually as part of a package of coverages. But the market for this kind of insurance is dominated by a few niche players. Chief among these: Michigan-based Foremost Corp. of America. Foremost sells its insurance directly and through marketing agreements with groups like state mobile home owners associations and the AARP.

Mobile home insurance is the kind of niche product that insurance companies like to sell. It’s a specific market with distinctive risks but risks that share many characteristics with traditional auto insurance. And it’s a concentrated market. AARP membership includes nearly 30 percent of the country’s 5.4 million insurable mobile home owners.

Foremost has 12 million policy years of data on mobile homes, which it uses to define its customers, and 350 employees in a centralized claims department who handle 97 percent of its claims. The fruits of this focus have been rich. Foremost has shown underwriting profits in 33 of 37 years in its core products.

Mobile homes originated in the 1930s as temporary housing towed behind an automobile. During World War II, mobile home parks sprouted near war production plants. Because they were constructed of materials not necessary for the war effort, mobile homes were an ideal housing alternative. After the war, mobile homes continued to grow in popularity as low-cost housing.

Foremost began as a one-room operation insuring new mobile homes financed by a single bank. Ed Frey, the president of Michigan-based Union Bank Co., realized personal property insurance was needed in order for lending institutions to provide financing for this new segment of the housing market. The fledgling mobile home industry, however, was considered a poor risk by insurance companies. So Frey and a group of business associates formed Foremost to write mobile home policies.