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Floating Home Insurance
By Ron Moreland, May 2005
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. Recently, one of our three major
insurers, ACE, went. So if you have insurance with ACE
now, it will not be renewed. This leaves us with 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 run insurance program that provides insurance for homeowners
and small businesses in “bad” areas 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, 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, building & content |
No |
Fire, wind, hail, lighting,
aircraft damage, riot, vehicle damage, explosion and
smoke |
Yes (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) |
Accidental discharge
or overflow of water from plumbing (owner occupied)
|
Yes |
No |
Replacement cost -
building |
Yes |
Yes |
Replacement cost -
contents |
Yes, as an option |
No |
Damage from watercraft |
Yes |
No |
Damange 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 only covers
damage from fire & collision |
No |
Debris Removal |
Yes |
No |
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) |
Personal Liability |
Yes |
No (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 |
No |
So what do I think about the differences between these insurers?
Easily 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.
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