Insurance for Floating Homes
by Ron Moreland
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 companies who provide property insurance, Red Shield and the California FAIR Plan. There are significant differences between the coverage offered by each and a significant difference in their cost.
Generally speaking the Red Shield offers more coverage, but the cost to obtain this coverage means paying a substantially larger premium. So it makes sense for you to read more to find out the differences.
The California FAIR Plan was established so that homes in “high risk” areas could by basic property insurance. While floating homes are not high risk, they are different. So insurance companies shy away from us. Thanks to the FHA, the Sausalito area floating homes are now permanently part of the FAIR Plan. The FAIR Plan does not have agents, but most licensed insurance brokers can assist you in obtaining a FAIR Plan policy plus other coverage not offered by the Plan, such as liability insurance. For detailed coverage information, visit their website at www.cfpnet.com. Insurance through Red Shield can only be purchased through a limited number of insurance brokers.
The FAIR Plan’s rates are substantially less than Red Shield’s, but the coverage provided is substantially less. Although “supplemental” property insurance for the FAIR Plan is now available, you must still purchase separate personal liability coverage. Liability insurance is included with the Red Shield 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. Also, ask your insurance agent.
Finally if you rent your floating home, either part time or full time, it is critical that you inform your insurance agent. DO NOT ASSUME that either your property or liability insurance will cover this exposure. Many policies exclude “commercial” use of your home. Insurance is available, but always clear it through your insurance agent.
|Coverage||Red Shield||FAIR Plan||Supplemental Personal Property|
|Home Structure (building) covered – building||Yes||Yes||N/A|
|Personal Property – building||Yes||Yes||Yes|
|“All Risk” except for excluded items – building||Yes||No||N/A|
|“All Risk” except for excluded items – personal property||No||No||No|
|Perils of the sea (excluding tidal waves||Yes, both building and contents||No||No|
|Fire, wind, hail, lighting, aircraft damage, riot, vehicle damage, explosion and smoke||Yes (these perils are included in the “all risk” coverage||Yes||Yes|
|Vandalism and malicious mischief||Yes||Yes||Yes|
|Additional cost to rebuild due to enforcement of building laws||No||Yes (optional coverage)||No|
|Accidental discharge or overflow of water from plumbing (owner occupied homes)||Yes||No||Yes|
|Replacement cost – building||Yes||Yes||N/A|
|Replacement cost – contents||Yes, as an option||No||Yes|
|Damage from watercraft||Yes||No||No|
|Damage to owned small watercraft||Yes, up to $1,000||No||Yes. up to $1,000|
|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||N/A|
|Debris Removal||Yes||Included in policy limit||Yes|
|Earthquake||Yes, as an option||Yes, as an option||Yes, as an option|
|Reimbursement for alternate living expenses while home is being repaired||Yes, $10,000 and option to purchase higher limit||Yes (10% of the building coverage). Option to purchase 20% limit.||Yes|
|Personal Liability||Yes||No (but available at additional cost from other insurers)||No|
|Premium payable in installments||Yes, installment fee charged per installment, also can pay online||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 coverage C limit||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. Fortunately, you can purchase a separate policy for this coverage. Since most marinas require that you buy liability insurance you need to add the cost of liability coverage to any comparison with the Red Shield coverage.
On the property insurance side, one of 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. But the Supplement Personal Property insurance does cover water damage due to a fresh water leak.
Only you can decide if the cost difference is worth getting this coverage. Another big difference is the lack of theft coverage under the FAIR Plan. Fortunately this coverage is now available via a supplement property insurance policy (see below for details). Also keep in mind that neither Red Shield nor the FAIR Plan 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 or pay an additional premium to cover it under the Sadler & Co. supplemental property insurance policy.
We are aware of the following insurance brokers that represent insurers who provide coverage for floating homes:
|Broker||Red Shield||FAIR Plan||Personal Liability||Supplemental Personal Property|
|Sadler & Co.
|Yes||Yes||Yes||Fine Arts and other specialized
property floaters available