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	Floating Homes Association P.O. Box 3054 Sausalito, CA 94966

	Phone: (415) 332-1916

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Floating Home Insurance

By Ron Moreland, March 2010

If you are having problems getting insurance on your floating home, join the club. Unfortunately, obtaining insurance on floating homes has at times been difficult and always expensive. Over the years insurance companies willing to insure our homes have come and gone. Right now we have only two insurers, Red Shield and the California FAIR Plan. There are significant differences between the coverage offered by each and an even more significant difference in their cost.

Generally speaking the Red Shield offers more coverage, but the cost to obtain this coverage means paying almost twice the premium. So it makes sense for you to read more to find out the differences.

For those of you who don’t know, the FAIR Plan is a State sponsored insurance program that provides insurance for homeowners and small businesses in “bad” areas. Basically, where standard insurers provide little or no property insurance. Thanks to the FHA, the Sausalito area floating homes are permanently part of the FAIR Plan’s territory. Any California insurance broker can obtain a policy for you through the FAIR Plan. Insurance through Red Shield can only be purchased through a limited number of insurance brokers.

The FAIR Plan’s rates are less than one-half of Red Shield’s, but the coverage provided is less and you must purchase separate personal liability coverage. I strongly suggest that you obtain quotes from both Red Shield and the FAIR Plan, and then decide which option is best for you using the following table. Please keep in mind we have only tried to highlight the major differences as this is not a complete comparison.

Coverage	Red Shield	FAIR Plan
“All Risk” except for excluded items – building	Yes	No
“All Risk” except for excluded items – personal property	No	No
Perils of the sea (excluding tidal waves	Yes, both building and contents	No
Fire, wind, hail, lighting, aircraft damage, riot, vehicle damage, explosion and smoke	Yes (these perils are included in the “all risk” coverage	Yes
Vandalism and malicious mischief	Yes	Yes
Theft	Yes	No
Glass breakage	Yes	No
Additional cost to rebuild due to enforcement of building laws	No	Yes (optional coverage)
Accidental discharge or overflow of water from plumbing (owner occupied homes)	Yes	No
Replacement cost – building	Yes	Yes
Replacement cost - contents	Yes, as an option	No
Damage from watercraft	Yes	No
Damage to owned small watercraft	Yes, up to $1,000	No
Floatation (concrete barge, Styrofoam, fiberglass, etc.)	Limited to 5% of the home value insured and then coverage only provided for damage arising out of fire and collision	No
Debris Removal	Yes	Included in Coverage A
Earthquake	Yes, as an option	Yes, as an option
Reimbursement for alternate living expenses while home is being repaired	Yes, as an option	Yes (10% of the building coverage). Option to purchase 20% limit.
Personal Liability	Yes	No (but available at additional cost from other insurers)
Premium payable in installments	No, but premium financing available	Yes, if premium greater than $250. 40% down and two additional installments of 30% each. $2.50 per installment.
Personal property covered worldwide	Yes	10% of policy limit (Coverage A)

So what do I think about the differences between these insurers? One of the biggest differences is the lack of personal liability coverage under the FAIR plan. You will find there is only one major insurer for this coverage and buying it separately is expensive. In addition, most marinas require that you buy liability insurance.

On the property insurance side, the biggest difference is the lack of sinking coverage under the FAIR Plan. While our community has experienced few sinkings due to salt water leaks, there have been a number of sinkings due to fresh water (plumbing) leaks. Only you can decide if the cost difference is worth getting this valuable coverage. Another big difference is the lack of theft coverage under the FAIR Plan, but theft has not been a major problem on the docks so far. Also keep in mind that neither insurer provides a significant amount of coverage for fine arts and jewelry. If you want to insure those things, you need to buy a separate policy.