Insurance - Cost Rule of Thumb

Hi MHUers,

We just got an insurance quote for an all TOH, 60 space park with city water, city sewer with a lift station, 95% occupied. The quote was about $5600 plus umbrella of $700. The seller was paying $3600. Any rules of thumb we can use for this? Not really sure what limits to request either, as for as how much insurance is enough. I didn’t see that in the home study manual. This quote is:

General Liability $1,000,000 per occurrence/$2,000,000 aggregate, Hired/Non-Owned Auto Coverage, and 12 Months Loss of Income Coverage and 180 Day Extended Period of Indemnity.

Thanks for your input!

The loss of income is probably a healthy chunk of that premium. You need to decide how much you want that if you’re looking for a cheaper rate. If you are on the gulf coast or prone to wildfires then you probably want it and the seller was likely operating without it.

Hi Mr. Smith,
I’m not sure if that offer was from Mobile Insurance. Either way, here’s some rules of thumb for park insurance costs:

  1. Liability and property coverages vary dramatically based on geography (ex. high property costs in Gulf / SE Atlantic coast and N. Texas to Kansas properties and high liability costs in much of CA, NY, in or near Chicago - litigious areas with Plaintiff friendly juries)
  2. Non-coastal park loss of income insurance should cost about .3% of the annual park income. ex. $100,000 of income then $300 (Coastal park - then 1%)
  3. An umbrella liability layer of $1m is usually about $750 or so
  4. Above ground park utility infrastructure should cost about .5% of the value of the property (ex. $50,000 of power pedestals - $250)
  5. Parks with deferred maintenance, low occupancy, poor upkeep, park owned homes occupying more than 25% of the sites - are more expensive
  6. Park owned home inventory will cost you about 1% of the insured value to insure in most of the country (ex. 20 homes at $30,000 each = $600,000 in coverage = $6,000 premium)

A note to all buyers, most mom and pop MHP owners carry only basic general liability insurance, usually with some nasty exclusions like animal bite and contractors on premises. They don’t have employment discrimination, loss of income, park utility infrastructure, park buildings property coverage etc. And they certainly never post the cost of flood insurance even if they have it.