One of the biggest misconceptions about modular homes is that they require special insurance.
In reality, most modular homes qualify for the same standard homeowners’ insurance policy as a traditional stick-built home.
While the construction process differs, the coverage usually doesn’t.
There are, however, a few important differences during the building process. Before your home receives its Certificate of Occupancy, a different type of coverage may be required, depending on your lender.
In this guide, we’ll explain how modular home insurance works, when homeowners’ insurance begins, what risk insurance covers during construction, and how to choose the right policy once your home is ready.
What Insurance Covers Modular Homes
If you’re planning to buy a modular home, one of the first questions you’ll probably ask is, “Do I need special insurance?”
In most cases, you don’t.
Whether you’re building a modular log cabin, modern cabin, ADU, or another certified modular home, it’s generally insured under the same standard homeowners’ insurance policy as a traditional stick-built home. That’s because certified modular homes are engineered to meet the same state and local building codes as site-built homes and are permanently installed on a foundation. From an insurance company’s perspective, that means they’re typically viewed as any other newly constructed residence.
Therefore, you can usually purchase a standard homeowners policy instead of a specialized modular home policy.
Modular Homes vs. Manufactured Homes Insurance
Modular homes and manufactured homes are often confused, but they’re built to different standards and insured differently.
| Modular Home | Manufactured Home | |
| Building Standard | Built to state and local building codes | Built to the federal HUD Code |
| Foundation | Installed on a permanent foundation | Built on a permanent steel chassis |
| Insurance | Typically covered by standard homeowners insurance | Typically requires manufactured home insurance |
| Types of Homes | Log Cabins, Modern Cabins, ADUs | Luxury Mobile Homes |
Because modular homes are on a permanent foundation and meet local residential building codes, they’re generally eligible for traditional homeowners’ insurance. Manufactured homes, on the other hand, are built to the federal HUD Code and typically require a manufactured home insurance policy.
If you’d like to learn more about the differences, read our guide comparing modular homes and manufactured homes.
Are Modular Homes Harder to Insure?
No. For most homeowners, insuring a certified modular home is no different than insuring any newly built site-built house.
One of the biggest misconceptions about modular homes is that they’re more difficult to insure simply because they’re built in sections. In reality, insurance companies are generally far more interested in the overall level of risk associated with insuring your home than the construction method itself.
Because certified modular homes are built to the same state and local building codes as traditional homes and installed on a permanent foundation, they typically qualify for the same standard HO-3 homeowners insurance policy.
Occasionally, an insurance company may ask additional questions if it’s unfamiliar with modular construction. Based on Matt Albrecht‘s experience helping homeowners through the modular building process at Zook Cabins, it’s uncommon for certified modular homes to encounter difficulties obtaining homeowners’ insurance. In most cases, any questions are resolved once insurers review the home’s engineered drawings and construction specifications.
Rather than focusing on modular construction itself, insurance companies evaluate many of the same factors they would for any newly built home.
Factors Insurance Companies Consider When Insuring Modular Homes
Insurance companies determine both your eligibility for coverage and your premium by evaluating the overall level of risk associated with insuring your home. Simply put, the greater the likelihood of a future claim or the higher the cost of repairing or rebuilding your home, the greater the risk for the insurer.
Here are some factors that may affect how your modular home gets insured.
| Factor | How it Can Affect Your Ability to Get Insurance |
| Location | Homes in areas with frequent hurricanes, wildfires, flooding, tornadoes, or other severe weather may have fewer insurers willing to write new policies, higher premiums, higher deductibles, or additional coverage requirements. For example, a home in California with high risk for wildfire exposure benefits from protections under the FAIR plan. |
| Replacement Cost | Homes with higher rebuilding costs typically require higher dwelling coverage limits, which increases the insurer’s financial exposure. As replacement costs rise, some insurers may require additional underwriting or place limits on the amount of coverage they’re willing to provide. For example, a custom log cabin with premium finishes may cost significantly more to rebuild than a smaller home with standard finishes. |
| Roof Age & Condition | Older roofs present a greater risk of leaks and storm damage. Depending on the roof’s age and condition, insurers may require a roof inspection, charge higher premiums, limit roof coverage to actual cash value, or require the roof to be repaired or replaced before issuing a policy. For example, a 20-year-old asphalt shingle roof may need to be replaced before some insurers will provide coverage, while a new impact-resistant metal roof may qualify for lower premiums or discounts. |
| Claims History | Multiple previous insurance claims, particularly for water or storm damage, may cause insurers to increase premiums, impose coverage restrictions, or decline to issue a new policy because the property is viewed as presenting a higher risk. A home with little or no claims history is generally easier to insure than one with several recent claims. |
| Construction Type | Certified modular homes are typically no harder to insure than site-built homes because they’re built to state and local building codes. However, if an insurer is unfamiliar with modular construction, it may request engineered drawings or other construction documentation before issuing a policy. In most cases, once that documentation is reviewed, the home is insured just like any other newly built home. |
How Insurance Protects Your Modular Home From Construction to Move In
Coverage Throughout the Modular Home Building Process
From the day your modular home begins construction until you receive your Certificate of Occupancy (COO), different parties are responsible for protecting your investment. Understanding who carries which insurance and when your homeowners policy begins can help you avoid unexpected gaps in coverage.
The timeline below reflects the typical process for certified modular homes, including Zook Cabins’ modular log homes, modern cabins, and ADUs.
| Stage | Who Carries the Insurance? | Coverage Typically Provided |
| Construction | Builder | General liability and workers’ compensation insurance help protect against job-site accidents and certain construction-related risks. |
| Transportation | Transportation company | Transit or cargo insurance typically protects your modular home while it is being delivered to your property. |
| Installation | Crane and installation contractor | Liability insurance generally covers the lifting and placement of your home onto its permanent foundation. |
| After Installation, Before Certificate of Occupancy | Homeowner or lender (if required) | Risk insurance may be required to protect the completed home until it is approved for occupancy. |
| After Certificate of Occupancy | Homeowner | Your standard homeowners insurance generally becomes the primary coverage for your modular home. |
What Is Risk Insurance?
Risk insurance is temporary coverage that may be required by your lender to protect your modular home during the short period between installation and the issuance of your Certificate of Occupancy (COO).
Unlike construction insurance, trucking insurance, or crane insurance, risk insurance does not cover the building, transportation, or installation of your home. Those stages are typically covered by the builder, transportation company, and crane contractor.
Instead, risk insurance protects your completed home after it has been placed on its permanent foundation but before it has been legally approved for occupancy.
Once your modular home has been installed on its permanent foundation, construction is essentially complete. However, your local building department must still perform final inspections before issuing a Certificate of Occupancy. Until that certificate is issued, your homeowners insurance generally hasn’t taken effect.
According to Matt Albrecht, who has more than 13 years of experience with Zook Cabins, some lenders require risk insurance to protect their investment during this transition period. Since the home serves as collateral for the loan, lenders want to avoid a gap in coverage between the time the home is installed and the point at which homeowners’ insurance can begin.
For example, imagine your modular home has been placed on its foundation and electricians are completing the final utility hookups before the Certificate of Occupancy is issued. If an electrical malfunction caused a fire during this stage, your homeowners insurance generally wouldn’t apply because the policy hasn’t become active yet. If your lender required risk insurance, that temporary policy would help protect your investment until your homeowners insurance takes effect.
Risk insurance isn’t required for every modular home project. The requirement comes from your lender, not your builder. If your lender requires it, they’ll let you know during the financing process, and you’ll be responsible for obtaining the policy. If they don’t require it, there’s typically no need to purchase it on your own.
When Does Homeowners Insurance Begin?
Once your modular home passes its final inspections and your local building department issues a Certificate of Occupancy (COO), it is officially approved for occupancy. At that point, any temporary risk insurance that may have been required is no longer needed, and your standard homeowners insurance can typically become active.
What Does Modular Home Insurance Cover?
Once your COO has been issued and your homeowners insurance policy becomes active, your certified modular home is typically covered under a standard HO-3 homeowners policy, just like a traditional site-built home.
This means it generally provides the same core protections you would expect for a conventional home:
| Coverage | What It Protects |
| Dwelling (Coverage A) | The structure of your modular home, including the roof, walls, flooring, built-in cabinets, plumbing, electrical systems, and other permanently installed features. |
| Other Structures (Coverage B) | Detached garages, sheds, workshops, fences, and other covered structures on your property. |
| Personal Property (Coverage C) | Furniture, clothing, electronics, appliances, and other personal belongings damaged by a covered peril. |
| Personal Liability (Coverage E) | Legal expenses, settlements, and damages if you’re responsible for someone else’s injury or property damage. |
| Medical Payments (Coverage F) | Medical expenses for guests injured on your property, regardless of fault. |
| Additional Living Expenses (Coverage D) | Temporary housing, meals, and other increased living expenses if a covered loss makes your home temporarily uninhabitable. |
One of the biggest advantages of an HO-3 policy is that your home’s structure is generally covered against all direct physical losses unless they’re specifically excluded by the policy. Personal belongings are typically covered for a list of named perils, such as fire, theft, windstorms, hail, vandalism, and certain types of water damage. Coverage details vary by insurer, so review your policy with your insurance agent to understand exactly what’s included.
What Isn’t Covered Under a Homeowner’s Insurance Policy?
While an HO-3 policy provides broad protection, some losses are typically excluded. Common exclusions include:
- Flood damage
- Earthquake or earth movement
- Water backup from sewers or drains
- Normal wear and tear
- Mold resulting from poor maintenance
- Pest or insect damage
- Construction defects or faulty workmanship
- Damage caused by neglect or lack of maintenance
- Damage that occurs while a home is under construction, vacant, or unoccupied (depending on the policy)
Because every insurer is different, always review your policy’s exclusions to understand exactly what’s covered.
When To Consider Additional Coverage
Because an HO-3 policy doesn’t cover every type of risk, it’s important to consider where you live, how important your belongings are, and your personal preferences. Based on this, your insurance agent may recommend adding endorsements or purchasing other policies.
Coverage You Can Add to Your HO-3 Policy
These coverages are commonly available as endorsements.
| Coverage | When To Consider It |
| Water Backup Coverage | If you want protection against damage caused by backed-up sewers, drains, or sump pumps. |
| Equipment Breakdown Coverage | If you want coverage for unexpected mechanical or electrical failures involving your HVAC system, water heater, appliances, or other home systems. |
| Service Line Protection | If you want coverage for underground water, sewer, gas, electrical, or communication lines serving your home. |
| Scheduled Personal Property | If you own valuable jewelry, firearms, artwork, musical instruments, collectibles, or other belongings that exceed your policy’s standard limits. |
Coverage That Typically Requires a Separate Policy or Special Coverage
Some risks generally require their own policy because they’re excluded from standard homeowners insurance.
| Coverage | When To Consider It |
| Flood Insurance | If your home is located in a FEMA flood zone or another area prone to flooding, such as coastal Florida, the Gulf Coast, or riverfront communities. Standard HO-3 policies don’t cover flood damage, even if the flooding is caused by a hurricane. |
| Earthquake Insurance | If you live in an area with elevated seismic activity, including California, or parts of the Pacific Northwest. Earthquake damage is typically excluded from standard HO-3 policies. |
| Hurricane & Windstorm Coverage | If you live in hurricane-prone coastal areas like Florida, Louisiana, Texas, or the Carolinas. Standard HO-3 policies generally cover wind damage from hurricanes, but your policy may include a separate hurricane or named storm deductible or require separate windstorm coverage, depending on your insurer and location. Flood damage from hurricanes still requires separate flood insurance. |
| Tornado & High Wind Coverage | If you live in Tornado Alley or other regions with frequent severe storms, including Oklahoma, Kansas, Nebraska, and parts of Texas. Tornado damage is generally covered under the windstorm provisions of a standard HO-3 policy, but some insurers may apply separate wind deductibles or wind exclusions in high-risk areas. |
Choosing the right homeowners insurance goes beyond purchasing a standard HO-3 policy. Your home’s location, local weather risks, the value of your belongings, and your personal preferences all influence the coverage that’s right for you. Your insurance agent can help you determine which endorsements or additional policies best fit your needs.
How Much Does Modular Home Insurance Cost?
Like traditional homeowners’ insurance, the cost of insuring a modular home depends on several factors, including where you live, your home’s value, and the coverage you choose.
Average Cost of Modular Home Insurance
The national average homeowners’ insurance policy costs around $2,720 per year, according to Forbes’ industry analysis on average homeowner’s insurance costs. As the study shows, the cost of your policy can vary dramatically depending on factors such as home value, replacement costs, location, and more, with costs ranging from $1,872 to $4,802 based on the amount of dwelling coverage alone.
We’ll explore how each of these factors affects your policy’s cost in more depth below.
What Affects Your Premium?
The cost of your homeowners insurance depends on the level of risk your insurance company associates with your home. While every insurer uses its own rating system, these are some of the biggest factors that can influence your premium.
Home Value & Replacement Costs
The more it costs to build your home or the more your home costs, the more coverage you’ll need to replace it in the event of any damages insured under your dwelling coverage. Here’s a look at how the dwelling coverage you need can affect the average cost of your policy:
| Homeowners Insurance Dwelling Coverage Amount | Average Cost of Homeowners Insurance Per Year |
| $200,000 | $1,872 |
| $350,000 | $2,720 |
| $500,000 | $3,538 |
| $750,000 | $4,802 |
As you can see, the more expensive your home, the more it costs to rebuild, and the more your policy will cost.
Where You Live
Your location affects both the likelihood of future claims and the type of coverage your insurance requires, which can also increase your premium.
Here are some areas where certain local weather risks can increase your premium:
- Florida + The Gulf Coast: Hurricanes may lead to higher premiums, hurricane deductibles, and separate flood insurance requirements.
- California: Wildfire risk has recently unlocked additional coverage and protections under the FAIR plan. Earthquake coverage also requires separate insurance.
- Oklahoma, Kansas, & Nebraska: Homes in tornado alley that face frequent tornadoes and hail often face higher wind or hail premiums or deductibles.
- Michigan & Northern States: Heavy snow, ice dams, and frozen pipes increase weather-related claims and may affect premiums.
Roof Age & Condition
Because roof damage is one of the most common homeowners’ insurance claims, insurers pay close attention to your roof’s age and condition. A newer, well-maintained roof typically presents less risk than an older roof, which can influence both the price you pay for coverage and the type of roof coverage available.
How Roof Age Can Affect Insurance Costs
| Insurance Company | Average Annual Premium (New Roof) | Average Annual Premium (20 Year Old Roof) |
| Allstate | $1,441 | $1,762 |
| American Family | $1,514 | $1,794 |
| ASI Progressive | $1,534 | $1,860 |
| Auto Owners | $1,348 | $1,506 |
| Nationwide | $1,482 | $2,077 |
While newer roofs often qualify for lower premiums or discounts, many insurers begin increasing premiums once a roof is approximately 10 to 15 years old. The exact increase varies by insurance company and depends on factors such as the roof’s material, condition, location, and claims risk.
How Roof Age Can Affect Roof Coverage
Some insurers don’t just adjust premiums as your roof ages. They also change how roof damage claims are paid. While some policies continue to provide replacement cost coverage regardless of roof age, others may transition to actual cash value coverage or apply a roof payment schedule that reduces the percentage of replacement costs covered as the roof ages.
| Roof Age | Example Roof Payment Schedule* |
| 0 to 5 years | 100% of replacement cost |
| 6 to 10 years | 80% of replacement cost |
| 11 to 15 years | 60% of replacement cost |
| 16 to 20 years | 40% of replacement cost |
| 21+ years | 20% of replacement cost |
*Example payment schedule from one insurer. Coverage schedules vary by insurance company and policy.
There isn’t an industry-wide standard for how insurers evaluate roof age and condition. Some insurance companies primarily use roof age to determine premiums, while others use it to determine the type or amount of coverage available. Depending on the insurer, an older roof may result in higher premiums, an inspection requirement, a transition from replacement cost coverage to actual cash value, or a roof payment schedule that reduces claim payouts as the roof ages. Because underwriting guidelines vary by insurer, comparing quotes from multiple companies can help you find the best combination of coverage and cost for your home.
Deductible
Your deductible is the amount you’ll pay out of pocket before your homeowners insurance begins paying for a covered claim.
You may be inclined to choose a higher deductible because it lowers you annual premium, but you’re agreeing to take on more of the financial responsibility if you file a claim. If you choose a lower deductible, you’ll pay a higher premium, but it reduces your out-of-pocket costs after a covered loss.
For example, if a covered storm costs $15,000 in damage and your deductible is $1,000, you’ll pay the first $1,000, and your insurance would typically pay the remaining $14,000, depending on your policy’s term and coverage limits.
The right choice depends on your financial situation. A higher deductible reduces your annual premium, but it’s important to choose an amount you could comfortably afford if you ever need to file a claim.
Claims History
Insurers don’t just consider your home when deciding whether or not to insure you; they also consider your history as a policyholder. Again, it comes down to risk.
A policyholder with multiple previous claims, particularly for water or storm damage, may increase your premium because insurers view the property as more likely to generate future claims. This means no previous claims can help you qualify for lower rates, while multiple claims can increase premiums or reduce the number of insurers willing to provide coverage.
Credit-Based Insurance Scores
In many states, insurance companies also use a credit-based insurance score when calculating premiums. While it’s based on your credit history, it’s different from a traditional credit score used by lenders. Instead of predicting your ability to repay debt, a credit-based insurance score helps insurers estimate the likelihood and potential cost of future insurance claims.
Credit-based insurance scores may consider factors such as:
- Payment history
- Outstanding debt
- Length of credit history
- Recent credit activity
- Types of credit accounts
Federal law prohibits insurers from using personal characteristics such as race, religion, gender, marital status, nationality, or ethnicity when calculating a credit-based insurance score.
In general, homeowners with higher credit-based insurance scores often qualify for lower insurance premiums, while those with lower scores may pay more for the same coverage.
Not every state allows insurers to use credit-based insurance scores. States such as California, Maryland, and Massachusetts restrict or prohibit the practice, so this factor doesn’t affect homeowners insurance premiums everywhere.
Home Features
Some home features reduce the likelihood or severity of future claims, which may help you qualify for discounts depending on your insurer.
| Home Feature | Why it May Lower Your Premium |
| Impact-Resistant Roofing | Better protection against hail and wind damage |
| Fire-Resistant Exterior Materials | Fire-resistant roofing, noncombustible siding, tempered glass windows, and defensible space around your home can help reduce wildfire risk |
| Smoke Detectors & Monitored Fire Alarms | Helps detect fires earlier, reducing the severity of fire damage |
| Monitored Security Systems | Helps reduce the risk of theft |
| Modern Plumbing & Electrical Systems | Reduces the likelihood of water damage and electrical fires |
| Wind-Resistant Construction | Can limit damage in hurricane and wind-prone regions |
Local building requirements can also influence your home’s insurability. For example, Colorado’s Wildfire Resiliency Code (CWRC) establishes standards for wildfire-resistant construction, including approved building materials and defensible space around the home. In addition to improving wildfire resilience, meeting these standards may support insurance eligibility, risk assessments, and potential insurance discounts as Colorado’s insurance market continues to evolve.
At Zook Cabins, every modular home is built to comply with applicable state and local building codes, including Colorado’s wildfire-resiliency requirements when applicable. Using quality materials, durable roofing, energy-efficient insulation, and modern construction methods, we build homes designed for long-term durability that may also help you qualify for more favorable insurance rates, depending on your insurer.
Learn more about these requirements in our guide to Colorado Wildfire Resiliency Compliance.
How to Get Modular Home Insurance
Purchasing insurance for a modular home is much like insuring any newly built home. Once you’re ready to shop for coverage, you’ll compare insurance companies, request quotes, and choose a policy that offers the right combination of coverage, deductibles, and price.
What Insurance Companies Will Insure a Modular Home?
Because modular homes are typically insured under standard homeowners policies, you’ll have plenty of options when it’s time to purchase coverage.
Some companies that commonly insure modular homes include:
| Insurance Company | Advantages | Potential Drawbacks |
| State Farm | -Largest Homeowner Insurer in the U.S. -Extensive Local Agent Network -Strong Financial Stability -Competitive Bundling Discount | -Higher Premiums -Coverage Limited in Higher Risk States |
| Allstate | -Wide Range of Optional Coverages & Discounts -Strong Digital Tools/Mobile App -Nationwide Availability | -Premium Increases at Renewal are a Common Customer Complaint -New Policies Limited in Some High-Risk Markets |
| Nationwide | -Flexible Coverage Options, Including Replacement Cost Endorsements -Good Bundling Opportunities | -Premiums Can Be Higher -Customer Satisfaction Scores Tend to Be Average |
| Erie Insurance | -Frequently Recognized for Competitive Pricing -Excellent Customer Service -Highly Rated Claims Handling | -Only Available in 12 States & Washington, D.C. |
| Travelers | -Strong Financial Ratings -Broad Coverage Options -Competitive Discounts for Bundling Home & Auto Insurance | -Premiums Vary Significantly By Location -Some Endorsements Cost Extra |
| Famers Insurance | -Personalized Service Through Local Agents -Wide Selection of Optional Coverages | -Often More Expensive Than Competing Insurers on this List |
| USAA | -Excellent Customer Satisfaction -Competitive Rates -Industry-Leading Claims Service | -Only Available to Eligible Military Members, Veterans, & Their Families |
| Regional Insurance Companies | -More Personalized Service -Local Underwriting Expertise -Competitive Pricing within their Service Area | -Availability Limited to Specific Regions -Coverage Options Vary By Company |
How to Compare Insurance Quotes
When comparing policies, don’t focus solely on the premium. A lower monthly payment may also mean lower coverage limits or fewer protections.
Instead, compare:
- Coverage limits and deductibles
- Replacement cost coverage
- Claims satisfaction and customer service
- Financial strength
- Available discounts, such as bundling your home and auto insurance or installing security systems
What You’ll Need to Get a Quote
Most insurance companies will ask for:
- Property address
- Square footage
- Year built
- Foundation type
- Roof information
- Security features
- Estimated replacement cost
If your modular home is still under construction, your builder can often provide documentation such as engineered drawings, floor plans, construction specifications, and other details your insurance company may request when preparing your quote.
Purchasing Your Policy
Before closing, make sure:
- Your lender has proof of insurance, if required.
- Your coverage reflects your home’s replacement cost.
- You’ve selected a deductible that fits your budget.
- Any optional endorsements you want have been added to your policy.
Taking a little time to review your coverage before move-in day can help ensure your home is protected from the moment your homeowners’ insurance begins.
Why Choosing the Right Builder Matters
Choosing an experienced modular home builder can make the insurance process much simpler. At Zook Cabins, every modular log cabin, modern cabin, ADU, and custom home we build is certified as a modular home and constructed to state and local building codes. Because our homes are built to these standards, they typically qualify for standard homeowners’ insurance once a Certificate of Occupancy has been issued. If questions arise, we can provide the engineered drawings and construction information that insurance companies may request to better understand how your home was built.
We also help protect your investment throughout the building process. Zook Cabins carries workers’ compensation and general liability insurance during construction and works with insured transportation and crane installation partners during delivery and installation. Once your home has been placed on its permanent foundation, risk insurance, if required by your lender, helps bridge the gap until your homeowners’ insurance takes effect.
Conclusion
Understanding modular home insurance is an important part of protecting your investment, but choosing the right builder can make the entire process much easier. At Zook Cabins, we’re committed to building certified modular homes, providing honest guidance, and helping you understand what to expect from planning and construction, through homeowners’ insurance, and into move-in. You bring the vision for your new home. We’ll help make the rest of the journey simple, enjoyable, and well worth your while.
