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Your manufactured or mobile home insurance needs may change over time, and so do insurers’ rates, coverage options, and discounts. Whether you’re looking for better protection, more competitive rates, or better service, shopping around for new coverage can help ensure your policy meets your needs—and that you’re not paying more than necessary.
This guide offers five steps to take when it’s time to switch coverage.
Key Points
• Common triggers for switching mobile home insurance include premium rate increases, home renovations, safety upgrades, or bundling opportunities with another insurer that offer meaningful discounts.
• Shopping around and requesting quotes from three to five carriers specializing in HO-7 policies ensures competitive pricing while securing coverage tailored to manufactured homes.
• Purchasing your new policy before canceling the existing one is essential, with both the effective date and cancellation date carefully aligned to avoid any coverage gaps.
• Notifying your lender and mobile home park of the insurance change, along with providing proof of continuous coverage, helps avoid lender penalties or park policy violations.
• Following up with both insurers after the switch and obtaining written cancellation confirmation from your old provider protects against being incorrectly billed for past premiums.
Why You Should Consider Switching Your Mobile Home Insurance
Several triggers could signal that it’s time to switch your mobile home insurance policy, also known as an HO-7 policy. Here’s a look at some common scenarios.
Rising Premiums and Rate Hikes
From time to time, insurers may increase rates on insurance policies, which can increase your overall premium and make coverage more expensive. They might do this to cover higher costs for repairs or to compensate for increased weather or climate-related risks, such as big storms or fires.
When your insurance company raises rates, it’s worth looking at competitors to see if they have done the same.
Changing Coverage Needs or Major Upgrades
When you make changes to your home, such as remodels, safety and security additions, or major upgrades to important features, like your roof, you may consider revisiting and changing your homeowners policy.
Upgrades, like a remodeled kitchen, can increase the value of your home, meaning you may need more coverage. Others, like safety upgrades, can reduce risk and may mean you qualify for a lower premium.
Finding Better Bundling Discounts
Insurance companies will bundle policies to lower their own operational costs and incentivize customer loyalty. A mobile home insurance policy might be bundled with auto insurance, life insurance, or an umbrella policy, for instance. Insurance companies tend to offer premium discounts when you bundle policies, and it may be worth switching to a new company as a way to lower your mobile home insurance.
Step 1: Shop Around and Compare New HO-7 Quotes
The first step to switching to a new HO-7 policy is shopping around and comparing home insurance quotes. As you do so, there are some important factors to keep in mind.
Verifying the Carrier Specializes in Mobile Homes
Mobile home insurance is a specialty insurance product. As you shop for a new policy be sure to approach carriers who specialize in HO-7s. Consider reaching out to three to five companies to ask for quotes, providing them with the year, make, model, and serial and HUD numbers for your home.
Provide additional information about anything that could affect the value of the home, such as square footage, number of bedrooms, and any major upgrades.
Matching Your Current Coverage Limits
When changing your manufactured home insurance, you’ll want to at least match your current coverage, including any riders that you may still need. However, this should be considered a baseline starting point. If you have changed anything about your home since your first purchased coverage, you may need more or less insurance, depending on your circumstances.
Step 2: Purchase the New Policy First
Once you have found the right new policy, you should purchase it first before you cancel your old policy.
Setting the Right Effective Date
Make sure that the effective date—the date on which your new policy starts—aligns with the cancellation date of your old policy.
Avoiding Lapses in Coverage
Purchasing a new policy before canceling the old one prevents any coverage gaps that could leave you and your home vulnerable should something happen to it during that period.
Step 3: Notify Your Lender or Park Management
If you financed the purchase of your mobile home, your lender likely requires that you carry mobile home insurance. An insurance gap could trigger penalties from your lender and is best avoided. Notify your lender that you are switching insurance companies and provide proof of continuous insurance.
Similarly, if you live in a mobile home park, the park likely requires insurance as well. Notify them of any changes to your policy and provide them with proof of continuous insurance.
Updating Your Escrow Account
An escrow account is the dedicated bank account often required by lenders where you deposit money to cover specific bills, including mobile home insurance premiums. These accounts ensure that your insurance is paid on time alongside payments to your lender. Update your escrow account when you change insurance companies to ensure your new premium is paid on time.
Step 4: Cancel Your Old Policy Officially
With a new policy in place, you can cancel your old one.
Getting a Refund for Unused Premium Months
If you’ve prepaid any of your premium, you may be entitled to a prorated refund, meaning you’ll be reimbursed for the months that you didn’t use.
Why You Must Provide Notice in Writing
When you cancel your mobile home insurance, you may be able to start the cancellation process with your insurance company over the phone. And for some companies, a phone call will be sufficient.
However, your insurance company will often require that you send a signed written document to make the request official. Some companies may have a specific form that you need to fill out, sign, and return.
Step 5: Follow Up and Confirm the Switch
Finally, with a new policy in place and your old one cancelled, it’s worth following up with your old and new insurance companies to make sure the switch went through without a hitch. Again, this is an important step to help ensure that there are no gaps in coverage that could put you at risk or cost you additional money.
Ask your old insurance provider for written confirmation of your cancellation for your records to help ensure that you do not continue to be billed for premiums.
The Takeaway
Changing to a new insurance carrier can offer a lot of benefits. It can save you money and make sure that you get the protection that you need. Making the switch methodically is critical to ensuring continuous coverage, preventing penalties or being double-billed, and ensuring that you get the protection that you need.
If you’re a new homebuyer, SoFi Protect can help you look into your insurance options. SoFi and Lemonade offer homeowners insurance that requires no brokers and no paperwork. Secure the coverage that works best for you and your home.
SoFi brings you real rates, with no bait and switch.
FAQ
Is there a fee or penalty for canceling mobile home insurance early?
Depending on your old insurance policy, there may be a fee for cancellation, or you may face other penalties such as losing any premiums you have prepaid. Check your policy or ask your insurance company to see if these conditions apply.
Can I switch mobile home insurance if I currently have an open claim?
Your old carrier has a legal responsibility to handle open claims. So, switching mobile home insurance while you have an open claim with your old carrier should not be a problem.
Do I have to wait until my renewal date to change mobile home insurance?
You may change your mobile home insurance anytime you wish, though cancelling before your renewal date may trigger early cancellation fees.
What happens to my escrow account when I switch insurance companies?
When you switch insurance companies, your escrow account must be updated to make payments to your new policy.
How long does it take to switch to a new mobile home insurance policy?
Switching mobile home policies should be a relatively simple and quick process. It may take as little as a few hours or up to a few days as you gather quotes, choose a new carrier, instate a new policy, and cancel your old one.
Photo credit: iStock/Pekic
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