When shopping around for mobile home insurance, it is important to know what you're getting. It's also important to know the difference between Replacement Cost coverage and Actual Cash Value coverage.
While some companies offer Actual Cash Value coverage for your mobile home, Century-National provides Replacement Cost coverage. Replacement Cost coverage is the best coverage to have in the event of a loss to your mobile home. Here's why.
A mobile home, like most manufactured products, is a depreciable asset that loses value over time. What happens if your mobile home is lost due to a covered peril such as fire? An Actual Cash Value policy would pay based on the current replacement cost of the mobile home less the depreciation based on the age of the home. The amount of depreciation can be very significant.
Provided that you wish to replace the mobile home, a true Replacement Cost policy would actually pay the amount necessary to replace the mobile home with a newly manufactured one of the same size and quality. As you can see, this is much better protection than an Actual Cash Value policy.
Century-National offers two forms of Replacement Cost coverage. The one you are eligible for depends on the age of your mobile home. If the home is 20 years old or newer, then it is eligible for Guaranteed Replacement Cost coverage. Guaranteed Replacement Cost coverage pays for a newly manufactured mobile home of the same size and quality, even if that amount exceeds your policy limits. If the home is older than 20 years, the Replacement Cost coverage is the same except that payment is limited to the amount stated in your policy.
To provide this form of coverage, it is important that we, as the insurance company, provide a good estimate of the replacement value of the home. We rely on published cost guides to do this.
This does not mean that you must replace your mobile home if it were destroyed by a covered peril. You also have the option of settling for Actual Cash Value if you do not wish to replace the mobile home.
So far, this discussion relates only to settlement for total losses. For partial losses from perils covered in your policy, such as sudden water damage from a broken pipe in the home, Replacement Cost coverage may also apply. However, depending on the age of the mobile home, there are some Actual Cash Value limitations for certain components of the home, such as floor and roof coverings, in these partial loss situations. These are specified in the policy.
It is important to understand your insurance coverage, and our staff can help answer the questions you may have. Just call one of our friendly customer service representatives at 1-800-231-5711.
Our goal is not only to save you money, but to make sure your mobile home is adequately insured.