Mobile homes are a growth industry. According to the Manufactured Housing Institute (MHI), mobile homes account for about 25 percent of new residential construction and home sales each year in the United States, and more than 10 percent of total housing. In many rural areas, the percentage is even higher. Cost is a major benefit, as the price for a new manufactured home can start at under $29,000.

While mobile homes are relatively inexpensive to buy, they can be costly to insure.

The MHI defines mobile homes as "a single-family house constructed entirely in a controlled factory environment, built to the federal Manufactured Home Construction and Safety Standards, better known as the HUD (Housing and Urban Development) Code." The organization prefers the term "manufactured home," noting "mobile home" is the term used for homes built prior to June 15, 1976, when the HUD Code went into effect.

Regardless of which word you use, "Mobile home insurance is really the same as conventional home insurance," says Phil Supple, a spokesman for State Farm. In both cases, the coverage and the claim process are the same. For instance, if you purchase a policy that includes "replacement cost," your mobile home insurance will cover the cost of replacing whatever has been damaged, up to your policy limit.

In general, when insuring any home, there are three major risk areas you want to insure against: damage to your home, theft of property from your home, and your legal liability for injuries or property damage.

"Insurance costs are based, number one, on exposure to risk," Supple says. Statistically, insurance companies assert, there is a greater likelihood for some of those risk factors with mobile homes.

According to Supple, fires are a case in point. Mobile homes are not necessarily more likely catch on fire, but they are more likely to be extensively damaged if they do. "In a mobile or manufactured home, if a fire does break out, it can sometimes spread more quickly," Supple says. "There's a greater risk, thus there's a greater cost to insure."

In contrast, however, a national fire safety study by the Foremost Insurance Company showed that manufactured homes are actually less prone to fire than homes built on-site. As a matter of fact, site-built homes are more than twice as likely to experience a fire than manufactured homes, according to the Foremost study. The research showed that the number of home fires is 17 per 1,000 for site-built homes, while only eight per 1,000 for manufactured homes.

Storm damage does impact manufactured homes more severely, particularly from wind. When high winds blow through, mobile homes are lighter than site-built homes, and tend to blow over more easily.

"Another hazard is frozen pipes," Supple says. "With manufactured or mobile homes, because walls are sometimes not insulated as well, pipes can freeze."

Taken together, these and other factors lead insurance companies to place higher premiums on mobile homes.

Holding down costs

Winterizing or insulating your mobile home is one easy solution to the problem of frozen pipes. This can also lower the cost of heating and cooling your home. It can cost twice as much to heat and cool an older mobile home, as it costs in a site-built home of similar age and size.

Some insurers also encourage or even require you to have your mobile home secured to the ground with approved tie-downs and ground anchors. Tie-downs can help save your home from tipping over during windstorms.

The age and type of mobile home you buy can also play a role in your home insurance rates. All mobile homes built since 1977 must adhere to the HUD code regulations, which include federal standards for design and construction, fire resistance, energy efficiency, and quality. In addition, double-wide and multiple-section mobile homes can be less expensive to insure than single-wide mobile homes.

Rates can run the gamut

There are insurance pricing factors you can't control. If you live in an area with a comparatively high crime rate, or where there has been persistent flooding, you can expect higher premiums.

"It's not only the price, it's also the coverage," says John Johnson, senior vice president of marketing management for Foremost Insurance Group, which specializes in mobile homes. "In general terms, the fact is that the premiums for mobile homes include quite a wide range."

As Johnson notes, mobile home owners need to pay attention to more than just the cost of a policy. They also need to find out to what coverage is included. Some policies are comprehensive, while others cover only specific causes of loss or "named perils." Liability coverage, deductibles and coverage limits can vary from company to company and from policy to policy.

As a mobile home owner, you need to shop around for the best deal and the best policy to suit your needs.