Owners of manufactured homes have many of the same coverage needs as owners of stick built homes. As a result, manufactured home insurance policies provide coverage for the dwelling, outbuildings, personal property, additional living expense and personal liability. In most instances, the provisions of a policy insuring a stick built home also apply to an insurance contract covering a manufactured home.
However, many of the insurance companies that cover manufactured homes, offer two distinct claim settlement options. The first settlement option, “actual cash value”, tends to be less expensive to buy, but the coverage is inferior. Under the actual cash value option, the insurance company depreciates the claim payment based on the age and/or condition of the dwelling. With this type of coverage, a policyholder risks being paid thousands of dollars less than what it may cost to repair or replace the damaged home. Under the second settlement option, “replacement cost”, the insurer bases the claim settlement on the replacement value of the damage. Depreciation is not applied.
Let the professionals at Spence & Mathews explain the provisions of “actual cash value” and “replacement cost” in greater detail. Having the right policy can result in a difference of several thousand dollars when it comes to settling a claim for damage to your home.