Park Model Home Insurance: 5 Things You Should Know
Park Model Homes have emphatically increased in popularity over the past few years, and for good reason. They provide great opportunities for short-term rentals, vacation homes, and campgrounds for an extra avenue of income.
However, there’s a lot of confusion around what exactly a park model is and how they are insured. This blog will bring some clarity to the topic of park model home insurance, so you can make an informed decision when you invest in one.
What is a Park Model Home?
Park model homes are small house-like structures constructed on trailers and are classified as recreational vehicles (RV). Park model homes are usually around 400 square feet and are often parked at a retreat center, campground, or private property. Usually, they are placed somewhat permanently and are not moved often.
These structures are often seen at campgrounds as an alternative to traditional RV’s and campers, although they are becoming more popular to use as short-term rentals on sites like Airbnb or VRBO. They also make great weekend getaways and hunting lodges, as well as guest quarters. The best part about these structures is that they are mobile, so you can relocate fairly easily should you choose to.
Park Model Home Insurance: 5 Things You Should Know
Buying a beautiful, new park model home is an exciting thing, and the last thing you may feel like thinking about is insurance. It can be complicated, confusing and it costs money, all things that can put a damper on your park model home dreams. To help bring clarity and peace of mind, here are 5 key things you should know about park model home insurance.
Do I Need Insurance for my Park Model Home?
Like standard homeowners’ insurance, it’s not technically required by law in some cases. However, in most cases it’s definitely a good idea to get insurance, especially when you consider the amount of money you’ll invest in your park model home. Here are some cases in which you will need park model home insurance:
- Financing: If you are getting financing for your park model home, your bank will most likely require you to get insurance.
- Rentals: If you are planning to rent out your park model home, you’ll want to make sure you are covered by liability insurance at a minimum. Some short-term rental companies like Airbnb offer their own liability coverage for hosts, but we’ll cover this more in depth later.
- Transportation– When transporting your park model home, it will need to be covered with liability insurance at a minimum. We’ll cover this topic later.
photo credit: CNN
How are Park Model Homes Insured?
The reason why park model home insurance can be confusing is because it can be hard to define what park model homes are. Are they trailers, RVs, or mobile homes? In some ways they are all 3, and so it can be difficult to know which insurance types apply to park model homes. Here we’ll break down each insurance type, and whether or not they’ll work with park model homes.
Trailer Insurance: In the case of trailers and tow-behind campers, you can often add them to the insurance policy of the vehicle with which you are towing the trailer. However, this only applies to liability insurance while the trailer is being towed and will usually not cover any damages done to the trailer itself, both during transportation or otherwise.
Park model homes are a bit different than a typical trailer in that they are usually considered oversized loads. It’s unlikely any vehicle insurance policy would cover liability for the transportation of a park model home. You’ll need to look elsewhere to cover your park model with insurance, even during the transportation process.
RV Insurance: RV insurance is the type of insurance used to cover motorhomes and pull-behind campers. It covers an RV both in transport and while stationary, and often includes both liability coverage and coverage for damages done to the RV itself.
One of the great things about park model homes is that they are often classified as RVs and therefore are eligible for RV insurance. Many insurance companies actually have an RV policy specifically for park model homes, making this a great choice for insurance.
However, a park model may not be covered by an RV insurance policy during transportation. Again, we’ll cover this topic later in the blog.
Mobile Home Insurance: Mobile home insurance is a type of policy that is similar to a homeowners’ insurance policy. There are different levels of coverage available, from dwelling coverage to personal liability options. Typically a mobile home policy is a bit cheaper than a traditional homeowners’ policy.
Some insurance companies will cover a park model home under a mobile home insurance policy as long as the park model is seen as a semi-permanent structure.
The main thing to remember about park model insurance policies is that it is still somewhat of a grey area, and each insurance company may define your park model home in a different way. Therefore, there isn’t exactly one solution to park model home insurance, although as park models rise in popularity, there will be more companies offering specific policies for these structures.
How Much Does Park Model Home Insurance Cost?
A park model home insurance policy cost will vary quite a bit based on a variety of factors, but you can expect a policy to cost around $700-$1,500 a year.
How Do I Insure a Park Model Rental?
The issue of insurance can get even more complex when it comes to insuring a park model that’s being used as a rental. There are different ways to rent a park model, and therefore different ways to provide rental coverage. Here are a couple of rental scenarios and the appropriate ways to approach insurance for each scenario:
Short-Term Rental: If you plan on listing your park model home on a site like VRBO or Airbnb, you can take advantage of their in-house insurance coverage. Each company’s policies are different, so you’ll want to do some research on their websites. Additionally, there are companies that provide vacation rental insurance if you feel you need additional coverage. You can read about vacation rental insurance by following the link.
These policies, however, may not cover your park model home when it’s not being rented, so you’ll still want an insurance policy that provides coverage outside of rental time. Additionally, you may need to upgrade to a commercial insurance policy if you rent your park model home out a certain amount of time out of the year.
Some companies, like Roamly, specialize in insurance for part-time rentals of RVs and tiny homes and could be options for your park model home.
Full-Time Rental: You may choose to rent your park model for a longer period of time than the typical short-term rental. If you choose to do this, your insurance provider may ask that you require your renters to have their own renter’s insurance policy, which covers damage by the renters to the park model. It also covers any injury a renter may have while staying at the rental.
As we mentioned before, each insurance company may see your situation differently, so it’s important to ask questions to each individual company.
Does Park Model Insurance Cover Transportation?
Since park model homes are usually considered oversized loads, most owners do not move their park models themselves, but get a trucking company to do it. A trucking company typically has insurance that covers the objects they are hauling, so any damage done to the park model and any damage caused in the act of transporting is covered by their policy. In most cases, the owner of the park model home is not responsible for any damage occurring during transportation. If you choose to move the park model yourself, you’ll need to get a separate insurance policy that covers the transportation of the park model home.
Park Model Homes Insurance Options
As we’ve said, the best way to get the right park model policy for your individual situation is by speaking directly with an insurance company. Here’s a list of a few companies that provide insurance policies that are possibly suitable for you. (Note: This is not an endorsement of these companies. This list is only a resource to get you started on doing your own research.)
Covertree: This company provides a policy specific to park model homes, and serves a wide array of areas throughout the U.S.
Allstate: A popular company that provides insurance for mobile homes all across the U.S.
Roamly: This company specializes in insuring tiny homes and RVs that are rented part-time, and could be a great option for a park model rental.
Stratum: Another company that provides policies specifically for park model homes across the U.S.
Farmers: This agency provides mobile home insurance that could be an option for your park model home insurance.
photo credit: McMahon Insurance Agency
Wrapping it up…
Your park model home is a big investment, so it’s important to make sure you have proper coverage. We hope this blog helped bring some clarity to the topic and makes your park model home buying process just a little easier. If you have any questions, don’t hesitate to contact us. We’d love to hear from you!