The mobile home park im purchasing has 55 lots total but only has 29 tenants with 13 abandoned homes and he pays a total of $3994 a year for an umbrella, workers comp, comm package to cover the park is this high in your guys opinion. It seems to be high for a little park
Are you going to have workers? Do you need workers comp?
That quote seems high but not outrageous.
This seems pretty much in line with the averages:
Liability should run about $2,000-$2,500 per year on a park that size.
There is no personal property (yet): $0
Umbrella: $600-$800 per year
Workman’s Comp: ~$1,000 per year
The real questions is, do you need the umbrella? You will need worker’s comp for your manager.
Whether the park owner or the tenants will own these homes is a big insurance rate variable here. Also,
Insurance rates depend on where you are, the property’s loss history, management/ownership, and the condition of the property. That said, here’s some ballpark estimates for you under a “standard” insurance program - rates are higher if this is a fixer upper:
General Liability Insurance: (higher in Chicago area, South Florida, California, South Texas, More Urban areas)
$20/lot
$60/ rental home owned by the park
$600 for a swimming pool
$250 for a playground
Property Rates: (higher near Gulf or Atlantic, tornado and wind / hail states like TX, OK, Kansas)
.5% of the value of site built improvements/buildings
1.0% of the value of park owned homes
.3% of the annual income (for loss of income coverage)
Umbrella Liability:
Starts at about $650 for smaller parks like this one
Workers Compensation: ($400 minimum or so)
4% of payroll for maintenance employees
2% of payroll for park managers
Keep in mind that 13 abandoned homes not only scare off some lenders and investors, but they also can scare off your best value package insurance companies. If you buy it, you’ll want to let your insurance agent now you have an immediate plan for those 13 abandoned homes (remove, or rehab).
I hope that helps. Call if you would like exact numbers.
Kurt 800-458-4320, ext. 17
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