Insurance World

When shopping around for homeowners insurance for your mobile home, make sure you know what you’re buying. Know what risks you are exposed to and how to cover them. Below are a few basic things to consider:

Named peril or all risk (comprehensive): Homeowners policies may be purchased on a named peril basis. What that means is the policy will cover losses that occur as a result of the perils named on the policy. Some named perils are fire, lightening and ice/snow storm (check your policy). Named peril policies are cheaper than all risk, but they are also more restrictive.

All risk polices are comprehensive. Under an all risk policy, the insurance company will pay for all losses except for those that are excluded (discuss the exclusions with your agent). It costs more, but is worth the money.

Trip Collision coverage: Unlike stationary homes, mobile homes have the ability to be moved from one location to another. If there is a possibility that you will be moving your home, be sure to discuss this coverage with your agent. It’s better to have it and not use it than to need it and not have it.

Valuation: There are two types of valuation, replacement cost and actual cash value (ACV). Make sure that your home is valued at replacement cost. That means that you will get the cost to replace your mobile home in the event it is destroyed (subject to policy limit). Actual cash value includes depreciation. If you’ve had your home for several years, depreciating its value may leave you without enough money to buy a new home.

Emergency Removal: Insurance companies will pay a certain amount towards the cost to remove your mobile home in the event of a covered loss. For example, moving your home from a flooded location to preserve it.

When looking to insure your mobile home, always shop and compare.

Prohibited Marketing Practices. It is unlawful for a company or agent to use high pressure tactics to force or frighten you into buying a Medigap policy, or to make fraudulent or misleading comparisons to get you to switch from one company or policy to another. Deceptive “cold lead” advertising also is prohibited. This lactic involves mailings to identify individuals who might be interested in buying insurance. If you fill in and return the card enclosed in the mailing, the card may be sold to an insurance agent who will try to sell you a policy.

Check Your Right to Renew. States now require that Medigap policies be guaranteed renewable. This means that the company can refuse to renew your policy only if you do not pay the premiums or you made material misrepresentations on the application. Beware of older policies that let the company refuse to renew on an individual basis. These policies provide the least permanent coverage. Even though your policy may be guaranteed renewable the company may adjust the premiums from time to time. Some policies have premiums which increase as you grow older.

Know With Whom You’re Dealing. A company must meet certain qualifications to do business in your state. You should check with your state insurance department to make sure that any company you are considering is licensed in your state. This is for your protection. Agents also must be licensed by your state and may be required by the state to carry proof of licensure showing their name and the company they represent. If the agent cannot verify that he or she is licensed, do not buy from that person. A business card is not a license.

Keep Agents’ and/or Companies’ Names, Addresses and Telephone Numbers. Write down the agents’ and/or companies’ names, addresses and telephone numbers or ask for a business card that provides all that information.

If You Decide To Buy, Complete the Application Carefully. Do not believe an insurance agent who tells you that your medical history on an application is not important. Some companies ask for detailed medical information. If you leave out any of the medical information requested, coverage could be refused for a period of time for any medical condition you neglected to mention. The company also could deny a claim for treatment of an undisclosed condition and/or cancel your policy.

Look For an Outline of Coverage. You must be given a clearly worded summary of the policy… READ IT CAREFULLY.

Do Not Pay Cash. Pay by check, money order or bank draft made payable to the insurance company, not to the agent or anyone else. Get a receipt with the insurance company’s name, address and telephone number for your records.

Policy Delivery or Refunds Should be Prompt. The insurance company should deliver a policy within 30 days. If it does not, contact the company and obtain in writing the reason for the delay. If 60 days go by without a response, contact your state insurance department.

Use the “Free-Look” Provision. Insurance companies must give you at least 30 days to review a Medigap policy. If you decide you don’t want the policy, send it back to the agent or company within 30 days of receiving it and ask for a refund of all premiums you paid. Contact your state insurance department if you have a problem getting a refund.

And again, do not rush or be pressured into deciding on a policy. Trusting salespeople will take their time with you. If you are uncertain about a particular program, have the salesperson tell it to someone else, this sometimes helps too.