MH 04 01–ISO MOBILEHOME ENDORSEMENT COVERAGE ANALYSIS

(November 2023)

Mobilehome coverage is provided by attaching this endorsement along with a unique declarations to a homeowners policy. It can be modified by attaching other mobilehome specific endorsements or by attaching standard homeowners endorsements.

Related Articles: ISO Mobilehome Declarations Page

The Mobilehome Endorsement 04 01 05 11 edition may be attached to either a HO 00 02 or HO 00 03. When an insured occupies but does not own a mobilehome, this endorsement can be added to the HO 00 04. The form creates coverage for a mobilehome by modifying the policy forms’ Definitions, Section I Coverages and Section I Conditions.

This endorsement analysis will provide only the changes from the homeowners coverage form that are unique to the policy’s application to a mobilehome risk. For questions involving the unchanged portions of the homeowners policy, it is important to review the provisions of the applicable policy.

HO 00 03–ISO Homeowners 3 - Special Form Coverage Analysis

ISO Homeowners 4 - Contents Broad Form Coverage Form Analysis

HO 00 02–ISO Homeowners 2 - Broad Form Coverage Analysis

Mobilehome coverage provided by this endorsement is subject to all of the provisions of a homeowners policy with some exceptions. We will look at the exceptions from the homeowners policies starting with the revised definition.

MH 04 01–MOBILEhOME ENDORSEMENT ANALYSIS

Definitions

Residence Premises

The MH 04 01 replaces the homeowners form definition of "residence premises." Under the MH 04 01, the term refers to a mobilehome and other structures that are located on land that the named insured either owns or leases.

In addition, the named insured also must use the mobilehome as a residence. Finally, the land where the mobile home is located must be shown on the policy declarations as the residence premises. This is the primary mechanism for providing coverage. The homeowners policy is merely modified to designate the mobilehome/manufactured home as the covered property.

Note: This distinction is increasingly technical in the case of manufactured homes that, like stick or site-built homes, are stationary structures. While a manufactured home may possibly be moved after its installation, such movement is not recommended by most manufacturers.

Section I – Property Coverages

A. Coverage A - Dwelling

Under the MH 04 01, Coverage A refers to the mobilehome on the "residence premises.” Coverage A includes protection for the following:

· Structures (attached to the mobilehome)

· Utility tanks (if attached to the mobilehome)

· Permanently installed:

o floor coverings

o appliances

o dressers

o cabinets

o similar items


Example: Kartha Wheelz had a minor smoldering incident (caused by overheated, old wiring) in her mobilehome which damaged the following:
Damaged Property	Loss Amount	Eligible under Coverage A
Carpeting	$420	Yes, subject to deductible
Dryer	$312	A qualified yes because it must be permanently installed. It is also subject to deductible.
Freestanding Oak Bookshelf	$280	No, item is not structural property

The protection under this section also extends to materials for building, repairing, or renovating the mobilehome or other structures. However, the coverage only applies to materials when located on or next to the premises.

B. Coverage B - Other Structures

The MH 04 01 changes Coverage B so that a coverage amount equal to 10% of the Coverage A insurance limit applies to this class of property. The endorsement allows a minimum of $2,000 and the coverage provided under Coverage B does not reduce the Coverage A amount. This minimum limit is a necessary modification (and enhancement) because the limit for a mobile home is usually substantially less than that of a stick-built dwelling which would make the 10% of the mobilehome limit very inadequate.

Example: Jeremy and Lisa Tumbledon arrive home from work to find that a severe, localized storm has destroyed their new mobilehome as well as their luxury storage barn. Their policy consisted of a HO 00 02 form with a MH 04 01 mobilehome endorsement attached. Their policy’s Coverage A insurance limit was $52,000. The adjuster estimated the damages at $51,000 for the mobilehome and $2,750 for the barn for a total of $53,750. While the total exceeds their Coverage A limit, their policy also provides Coverage B for up to $5,200 for other structures, so the Tumbledons’ home and barn are covered.

Note: Any protection provided under other structures does not affect the policy’s Coverage A limit.

E. Additional Coverages

5. Property Removed

Additional Coverage – Property Removed is normally associated with personal property. It provides coverage when such property is moved off the premises to protect it from imminent danger from a covered cause of loss. An additional paragraph is added to this coverage for mobilehomes. It explains that when a mobilehome is endangered by a covered cause of loss and the insured chooses to move it out of danger, the insurer will pay reasonable expenses incurred by the insured to do so. The insurer will pay no more than $500 for its removal and return. In other words, the policy will pay up to $500 of reasonable expenses related to moving and returning the property insured under the MH 04 01.

Example: Hotwheelz Mobilehome Park is in the path of a wildfire. The Narlees empty their mobilehome of belongings and then move it to an undeveloped plot of land that a friend allows them to use. They later file a claim for the $412 expense to rent a truck and driver to move the home.

Note: No deductible applies to this coverage.

11. Ordinance or Law

Coverage for costs associated with complying with a local law that affects repairing, rebuilding, or replacing damaged property is NOT available under the MH 04 01.

Section I - Conditions

D. Loss Settlement

Under the MH 04 01 form, this condition is changed so that damage to:

· awnings

· outdoor antennas

· outdoor equipment

is settled on the basis of either their actual cash value or the amount required to repair or replace the property, whichever is less.

Example: The Flaytons’ Manufactured Home is insured under an HO 00 03 that is modified with an MH 04 01. A violent thunderstorm, accompanied by high winds, destroys the home's new awnings. They get an estimate and then file a claim for $2,800, the cost to re-fit their home with a new set of awnings. Their insurer inspects the damage and finds that they can get a set of awnings that were used as a model display for $1,300. The insurer settles the loss by replacing the awnings at the much lower cost.

This endorsement deletes carpeting and household appliances from the list of items settled at actual cash value as they are considered part of the mobilehome itself.

E. Loss to a Pair or Set

Because of the nature of mobilehome living, the traditional pair and set clause found in homeowners policies is expanded. In addition to the standard pairs or sets language a third item is added that addresses panels. In essence, the insurer will attempt to match replacement parts to existing areas, but it does have the option to repair the damage and attempt to find suitable alternatives including decorative effects. The inability to match mobilehome components doesn’t obligate an insurer to spend large sums to make exact replacements.

Example: A hailstorm damaged the Gentrys’ home. The home is made of multiple panels and only four panels escaped damage. The family wants all of the panels replaced but the insurer points to the Loss to a Pair or Set clause. The family is chagrined to learn that damage to some of the panels will not result in a total loss. A major argument arises and the two parties decide to resolve the loss via arbitration.

L. Mortgage Clause

This provision was changed so that it also refers to a lienholder (a party with a valid insurable interest in the covered property).

Example: Homey Wheels Insurance pays the Thumptons for repairs to their mobilehome after a hailstorm. In light of the outstanding loan on the mobilehome, the check is made out to the Thumptons and First Optimum Inc., the lienholder.