Mobile home insurance for the tenants


#1

Hi All;
Does the owners of the mobile homes in the park required to have an home insurance. What would happen if they do not and the tree falls on the home they own or the fire starts, etc. I am wondering if any one had these type of issues with non insured park tenants and how did they handle it. Just thinking out loud and hoping to get some direction how to deal with this situation or do I have to demand the proof of the insurance before signing a new lease, Thanks in advance.

Regards;
IC


#2

I require all my tenants to have replacement value insurance on their homes, not actual value. They are required to provide me proof of renewal annually. I also require them to have a minimum 1M liability coverage as well.


#3

Thanks Greg.
How do you handle the tenants who used to carry an insurance but now refuse to. Do you start evicting them? I just purchased the park with the tenants owning the homes but I am finding out that none of them are carrying the home insurance. Now I have the dilemma what to do?


#4

I would opt to evict if necessary. Having tenants with no insurance means that if the home is damaged/destroyed they likely will have no money to repair and they will end up walking away.
You need to have responsible tenants that will add to the health of your community not put it at risk.
Park rules are intended to allow you and your tenants to live in a community with a degree of security and quality of life. They may argue they can not afford to pay for insurance but if that is the case then they can not afford to live in your community. You can not have tenants that are willing to place your investment at risk.
This is a decision predicated on protecting your business interests not your tenants.


#5

Thanks Greg. Well said.


#6

Greg’s business model relies upon a high-quality tenant base with high demand. Not all parks fit this model. We, for one, do not require tenants to have insurance. If their home burns or is damaged, either they will fix it or we’ll be stuck with the embers. That’s the risk you take. When tenants have a limited budget, would you rather have the tenants pay money to the insurance company or to you in the form of lot rent?


#7

Brandon, I appreciate your point of view. It looks to me that my tenants are fitting more into your model. However I had a situation that prompted me to ask this question. The tree that was growing next to the home, basically touching the home, fell and some of the branches had damaged the house. Minor damage. My lack for 30 years previous owner of the park neglected the tree and no one had complain, month into the my tenure, strong wind topples the tree :slight_smile: The tenant does not have an insurance. Who is responsible for the fixing the house. Park owner or the tenant? I understand that the trees are park owner responsibility (my previous question posted to the forum) but what about the damage after the fact?


#8

Given your new ownership and prior owner’s negligence, I would probably fix the home. This also assumes you’re bringing out a tree company to take down diseased trees and prune everything properly so this doesn’t happen again.

Get comfortable with your insurance coverage for a high wind situation causing a large tree to come down.


#9

Was the tree dead or diseased? If so then you’re responsible. Otherwise, “act of God” and the tenant’s homeowners insurance should cover it, but if they don’t have that and can’t afford the repair then you will lose the tenant unless you step in. I’d probably fix it (you say “minor damage”) and gain some good will.

Maintain your trees so this doesn’t happen!


#10

Probably diseased, since it split and half of it came down. Yea, I started pruning the trees on the property. It is in the forest so will take some time :frowning:


#11

Thanks All for the input and suggestions.


#12

As Brandon points out I do have a higher quality tenant base. Thankfully I do not have to pay for what is otherwise a tenants responsibility to protect my income. In my market a vacant lot is a major loss of income and a fairly hefty financial loss for the home owner if the home is destroyed. It is a much different business approach when a tenants home is only worth a few hundred dollars.


#13

Greg. Brandon;
I do not know if you are willing to divulge this information in the public forum but I am curious what states your parks are? I am asking this only because your approaches to the insurance are vastly different. However both of the approaches are making business sense.


#14

I am in Ontario Canada. My community is mostly retirees, blue collar and professionals. Homes range in value from 50K to 100K+. Definatly not a trailer park.
Ontario has a wide range of community types, the same as in the US, ranging from trailer parks to five star gated communities with all the amenities.


#15

Our parks are in Texas and Michigan.


#16

Thanks Greg and Brandon for the valuable input.


#17

Find an inexpensive insurance plan these tenants can sign up for on monthly payments- Foremost or local State Farm etc


#18

Out of curiosity: what is the typical cost for residents to insure their homes?


#19

2% - 3% of the FMV I would estimate.


#20

They are required to provide me proof of renewal annually. I also require them to have a minimum 1M liability coverage as well.