A number of markets actively write mobile home parks. Nautilus Insurance Group, Capitol Insurance Companies, Western World Insurance Group and Northfield were mentioned by David Toombs, vice president commercial underwriting at Arlington/Roe & Company. Linda Knight, senior underwriter at Burns & Wilcox Ltd., explains that a number of carriers write liability coverage for mobile home parks and named Scottsdale, Mount Vernon Fire, Markel and Philadelphia Insurance. Dave Adcock, commercial production manager at Atlantic Specialty Lines, Inc. places this business with Scottsdale, Colony, RSUI and Max Specialty. CNA offers a nationwide mobile home park program according to Chris Chiodetti, vice president, contracts at London American Risk Specialties.
Our experts agreed that most accounts are written on a nonadmitted basis but acknowledged that there are some admitted markets.
Ms. Knight explains, “The greatest frequency and severity of loss on this class of business is typically caused by a guest falling but vandalism is another concern. We also see claims for dog bites and assault. Having a swimming pool, playground or other amenities also increases the park owner’s chances of loss.”
According to Mr. Chiodetti, “Today’s manufactured housing parks can rival any upscale neighborhood in America. Gone are the days where the phrase “grew up in a trailer park” has an unfortunate connotation. Many parks are set up exactly like a small community, complete with golf courses, clubhouses, swimming pools, lakes and docks, storage areas, dry cleaners, convenience stores, and possibly child care facilities.”
These amenities need to be evaluated. Mr. Toombs says, “Swimming pools, clubhouses, laundromats, game rooms, tennis court, playgrounds, restaurants, and stores are commonly found amenities that the same policy usually covers.” Mr. Adcock added walking trails, boat ramps, beaches and docks to the list of amenities and says, “all can and should be included in the GL coverage."
According to Ms. Knight, “Most carriers’ mobile home park programs also include seasonal RV parks and even campgrounds at times. That being said, many amenities may be offered. The most common ones are swimming pools; playgrounds; baseball diamonds; basketball, volleyball and tennis courts; and lakes. You might also see restaurants, small convenience stores and horse stables.”
Most carriers provide coverage using the standard ISO CGL occurrence coverage form. Mr. Toombs advises agents to “Be alert for exclusions for autos, watercraft, new entities, professional liability and pollution liability. There can also be some restrictions on contractual liability and/or personal and advertising injury.”
There may be significant differences by carrier. Ms. Knight explains, “The agent should make sure that the quote received does not contain exclusions for any amenity the insured offers. For example, assault and battery exclusion may be found on one carrier’s policy but not on another’s. The agent also needs to determine the park owner’s policy on animals, since some carriers exclude animals."
Mr. Chiodetti warns, “Claim issues have a tendency to vary by state based on state insurance regulations. Failure to maintain is a huge issue in California, and providing coverage for that exposure gives any carrier a real advantage. Failure to maintain claims are normally costly and time consuming.”
Capacity does not appear to be an issue. According to Mr. Adcock, “$1 million/$2 million primary and excess limits up to $5 million are readily available.” Ms. Knight adds, “Primary limits can go up to $3 million occurrence/aggregate. Higher limits up to $25 million can also be purchased using an excess GL or umbrella policy.”
While general liability capacity is not an issue, there are exposure concerns. Mr. Toombs explains, “Exposures that can create challenges are when the number of doors (units) exceeds 200, when more than 20% of the units are not owner/occupied, lakes/rivers/marinas, poor loss history, new home sales, and short-term rental units.” In addition, according to Ms. Knight, “Questions concerning whether the insured is responsible for the streets/roads and even the water supply on the property need to be asked.”
Mobile home parks have exposures beyond general liability and Ms. Knight says that some markets provide coverage for them. “Coverage enhancements available on most policies include inland marine for equipment used to maintain the grounds, golf cart and boat liability, hired and non-owned auto, and liquor liability. Property coverage may also be available but wind coverage in coastal states is usually not available or is cost prohibitive if it is.”
Concerning mobile home park rating, Mr. Adcock explains, “Many insureds may not understand that the mobile home park dwelling class code is needed if the park owns any mobile homes.” According to Mr. Toombs, “Rates are significantly higher when owned units are rental units because the park owner assumes liability for the rental of the unit and everything that goes on in it, as opposed to just covering the park itself.”
Our experts agree that mobile home pricing is relatively flat and similar to last year. Mr. Adcock says, “Overall, the coverage is affordable but coverage for parks with amenities such as swimming pools is among the most expensive.“ Ms. Knight adds, “We have seen credits applied to some of the better parks.”
The recession has had an impact on this industry but not always a negative one. According to Ms. Knight, “Mobile home parks have weathered the recession better than other classes of business. Lot rent is typically low. Since it is expensive to move a mobile home from one park to another, tenants tend to stay long term. Unless the park has numerous amenities and/or rental units, park maintenance and upkeep costs are usually low. Even seasonal parks are faring well as more people take simpler vacations instead of spending more money on higher-end hotels.” Agreeing, Mr. Adcock adds, “I think the recession has benefited park owners, as mobile homes are among the most affordable communities available in some areas.”
Mobile home parks can be a very profitable line of business for the retail agent who understands the wide variety of amenities and services that can be offered and encourages insureds to provide good maintenance in order to reduce their overall insurance costs. |
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