Trying to put together insurance on our first park. How much coverage is everyone carrying for loss of business income, i.e. how many months of income? Also, how long for extended loss of income coverage? Thanks in advance.
With the parks we have NO lost of income insurance–keep a nice amount in reserve for that possible situation. We have recently experienced wind gust of over 105 mph and have lost some homes but just another chance to upgrade for now and the future. We have no debt on our parks and if you have a loan it might be required. Generally if there are TOH’s the residents are forced to carry insurance and generally will replace with another home. We have never had park-owned homes in our parks unless ones moved in to sell–never to rent.
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We also do not carry loss of income insurance. Unless you are in a location like tornado alley it really isn’t worth the expense.
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Good to know. We’re in Iowa, so not in tornado alley but we do get tornadoes.
Loss of income and extra expense coverage likely costs about .25% of the annual park income in Iowa. Example - $100,000 of annual income = $250/year. This coverage isn’t triggered often for MHP’s. However, when it is, it is an investment saver. It will pay lost of income while the park is closed, expenses to clean up tenant owned home debris removal off home sites and streets, and loss of income for 180 days after the park reopens. We recommend 12 months of loss of income with 6 months of extended indemnity. About 90% of our park owning clients (100% of Frank and Dave’s) have loss of business income coverage. Built into a Park specialty coverage package, it isn’t expensive and guards against an otherwise investment killing loss.
Kurt@MobileAgency.com
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which policy do you have right now for your park? and I don’t think most of the coverage will cover loss of income and it will too costly if they will do
Banks generally require 12 months loss of income, plus 6 months extended (post reopening income). Loss of income coverage generally lasts 12 months, OR until the park is reopened, whichever is shorter. The 6 month extended loss of income helps fill in the gaps of unoccupied homesites after you reopen.
Also, loss of income coverage usually includes “extra expenses” associated with reopening too. In the case of mobile home parks, the biggest post tornado/hurricane/large fire expense is removing tenant owned home debris which will be $1,000 to $4,000 per home.
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