What does an HO-7 Policy Cover?

what does an HO-7 policy cover

If you own a mobile or manufactured home, then you need a particular type of homeowner’s insurance. You need an HO-7 policy.

Things like HO-1, HO-3 and HO-5 insurance policies are for homeowners, and HO-4 and HO-6 plans are for renters and condo owners, respectively. Those with mobile homes or manufactured homes are required to buy HO-7 insurance. We are going to cover HO-7 insurance and talk about its features, coverage, and whether you need an HO-7 policy.

 

What Is an HO-7 Policy?

 

An HO-7 policy is a special homeowner’s insurance policy designed specifically for covering mobile and manufactured homes. Mobile homes include things like RVs, and manufactured homes refer to modular homes that are designed in one-piece and shipped to the destination. Because mobile and manufactured homes are subject to a number of different risks than traditional homes, they need a special type of insurance coverage.

 

What Does an HO-7 Policy Cover?

 

You can think of an HO-7 policy as a special kind of HO-3 policy designed specifically for mobile and manufactured homes. HO-7 policies grant you essentially the same protections and coverage as HO-3 policies, just for your mobile or manufactured home. That means that an HO-7 policy offers open-peril protection for your dwelling and other physical structures while providing named-peril protection for your personal property.

HO-7 policies are typically replacement cost plans. That means that they will pay to replace anything damaged with an identical copy at its current market rate. So if your mobile home is completely destroyed in an explosion, your insurance will cover a new identical replacement mobile home.

This is opposed to actual cash value policies. Actual cash value policies will reimburse you for the current market rate of the lost or damaged item. That means that actual cash policies take depreciation of the item into account when calculating how much to pay you. With an actual cash policy, there is the chance you could be reimbursed for less than what you originally paid for.

Most HO-7 policies are written as replacement cost policies, but not always. Make sure you know exactly what kind of perils your insurance policy will respond to.

 

Dwelling Protection

Primarily, HO-7 policies offer protection for the physical structure of your home. Since it is an open-peril policy, it will cover any damage from any peril that occurs, provided it is not excluded in your insurance agreement. Dwelling includes the exterior and interior of your mobile home and any detached structures (e.g., fences, or garage).

Typically, HO-7 policies exclude some of the following perils from coverage

  • Intentional damage
  • Nuclear damage
  • Damage from pollutants
  • Neglect
  • Vandalism of an empty property
  • Government action
  • Local codes or building ordinances
  • Mold, fungus, or rot
  • Damage from pests or rodents
  • Pet damage

 

In general, HO-7 open-peril plans will not cover things that can be directly linked to the owner’s misuse or neglect or risks that are covered in another type of policy.

 

Personal property

HO-7 plans cover personal property on a named-peril basis. HO-7 policies cover your personal property from 16 named perils:

  • Lightning or fire
  • Hail or windstorm
  • Smoke damage
  • Explosions
  • Riots or civil disruption
  • Falling objects
  • Volcanoes
  • Pipe freezing
  • Electrical damage
  • Unintentional and sudden water or steam damage
  • Vehicle damage
  • Aircraft damages
  • Cracking, bulging or tearing of home systems
  • Weight damage from snow, ice, and sleet
  • Vandalism
  • Theft

 

If your personal property is damaged due to one of the named perils on this list,  it will be replaced at actual cash value (depreciated value). If your possessions are damaged from an event that is not on this list, no coverage will be provided.

HO-7 policies typically have a maximum property coverage limit that is 50% of the dwelling coverage. So if you have $100,000 in dwelling coverage, your insurance will cover up to $50,000 to repair or replace your personal property but subject to your deductible.

Keep in mind that most property coverage has sub-limits for specific types of items. A common item with a coverage sub-limit is art. If your policy has a $3,000 sub-limit for artwork and $5,000 in art is stolen, then your policy will only cover up to $3,000, even if your total broad coverage is more than $3,000.

 

Liability Coverage

HO-7 policies include liability coverage to protect you from legal issues. If a person is injured on or in your property, then liability coverage will cover any legal fees and damages you have to pay up to the policy limit. If you have up to $100,000 in liability coverage, then your policy will cover up to $100,000 in legal fees and damages.

 

Medical Costs for Others

HO-7 policies include some coverage for third party medical costs. If a person is injured on or in your property, your insurance will pay for any medical costs that incur without requiring proof of liability. Medical cost limits are usually determined by the particular policy and usually max out at around a few thousand dollars.

It is important to realize that medical cost coverage and liability coverage are distinct and cannot be substituted for one another. You can’t use your liability coverage to pay for medical expenses and vice versa.

 

Additional Living Costs

Also known as loss of use insurance, additional living cost coverage will reimburse you for additional expenses you incur due to a disaster. If your mobile home or manufactured home is rendered uninhabitable from a disaster, then your HO-7 policy will cover some or all extra living expenses.  This coverage usually has limits based on duration and your total dwelling expense.

 

What Does an HO-7 Policy Not Cover?

 

Although HO-7 coverage applies on an open-peril basis for your mobile or manufactured home, your personal property is covered on a named-peril basis. Most commonly, HO-7 policies do not have protections for earthquakes, floods, or hurricanes so mobile homeowners can buy supplemental insurance packages to cover extra risks not covered in the original policy.

 

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Should I Get an HO-7 Policy?

If you own a mobile home or a manufactured home, then having HO-7 insurance is imperative. In fact, HO-7 insurance is the only kind of homeowner’s insurance that owners of mobile homes can have. The reason why is that mobile and manufactured homes are subject to a number of risks that traditional homes are not subject to hence why they have distinct coverage options.

If you have an HO-7 policy, it is important that you understand what is and isn’t covered in your plan. You need to consider your total assets and assess the risk of your geographic area to figure out if you need additional coverage. For instance, if you live in Florida, it might be a good idea to purchase a separate hurricane endorsement. If you live in California, then it might be a wise decision to purchase additional earthquake coverage.

Regardless of what the risk to your dwelling is, you need HO-7 insurance to protect your personal property. If you don’t have any and disaster strikes, you will be stuck paying for all your lost things out of pocket.

If you are shopping around for homeowner’s insurance policies, consider using our insurance lookup tool.  Just select your state or enter your zip code.  You can directly look up and compare quotes from the top home insurance providers so you can find a plan that fits your situation.

 

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For more information about mobile and manufactured home insurance, please contact us through our website or call 800-712-8519 during normal business hours.

Frequently Asked Questions

What is an HO-7 policy?

An HO-7 policy is a special homeowner’s insurance policy designed specifically for covering mobile and manufactured homes. Mobile homes include things like RVs, and manufactured homes refer to modular homes that are designed in one-piece and shipped to the destination. Because mobile and manufactured homes are subject to a number of different risks than traditional homes, they need a special type of insurance coverage.

What does an HO-7 policy NOT cover?

Although HO-7 coverage applies on an open-peril basis for your mobile or manufactured home, your personal property is covered on a named-peril basis. Most commonly, HO-7 policies do not have protections for earthquakes, floods, or hurricanes so mobile homeowners can buy supplemental insurance packages to cover extra risks not covered in the original policy.

What does an HO-7 policy cover?

HO-7 policies are typically replacement cost plans. That means that they will pay to replace anything damaged with an identical copy at its current market rate. So if your mobile home is completely destroyed in an explosion, your insurance will cover a new identical replacement mobile home.