Shawn Crowley is the VP of Insurance at CoverTree, offering affordable, manufactured home insurance to protect your home, assets and family. Shawn was interviewed by Michael Fiedel, a Managing Director at InsurTech Ohio and Co-Founder at PolicyFly, Inc.
Shawn, why are you so passionate about the opportunity around manufactured housing insurance?
“It was the first product I ever worked on coming out of college - my introduction to insurance. At the end of the day, it's a little bit like coming home, which I love. It's a needed product and very underserved in the marketplace. A lot of the standard carriers are really restrictive on the manufacturing homes that they'll take - if they'll take them at all. There's only a couple of specialty carriers out there that really focus on it. Giving consumers an insurance option that is specially designed for their needs is always great.
A lot of consumers are from the lower half of the economic scale. Anything they can save or get better coverage on is what we are here for. That's what drives a lot of my passion. There's opportunity for innovation and growth in this space. We're really pushing the standard of looking at roof condition to use for manufactured homes, which is already becoming more common on the homeowner side. We give consumers credit for actually replacing their roof, which is extremely rare in the manufactured home space. Even though we all know that new roofs are less likely to have losses. We are building intellectual property related to segmenting the communities. This has never been done before! If you are a well-managed community, your residents should benefit from that.”
How would you prioritize what needs to change about manufactured housing insurance, particularly from a customer's point of view?
“The number one thing is accessibility. It's really hard to find insurance for manufactured homes online. If you can, it's usually a quote, and then someone has to call you to bind. So, it's really a lead sourcing tool for a lot of carriers and agents. We let you bind directly online, making it accessible to all! It’s also not unusual for our customers to say they shopped around, and all three agents gave them the exact same quote from the exact same carrier. In any industry, a lack of competition is not helpful to the end consumer.”
What are some of the underwriting challenges that might be preventing certain carriers from participating with this type of insurance?
“Data about the home and community is really hard to come by. There are a couple of sources out there, and some of them are of dubious quality. When a lot of insurtechs go into the standard market of homeowners, for example, they can go to a hundred different data providers and get pretty much anything they want to know about that home because each of those homes are on their own parcel of land. That’s all being sourced from a lot of county auditor type websites and doesn't exist for manufactured homes. The county next to mine records a manufactured home sale in an Excel document then publishes it on their website. It's not getting collected, and it's not getting fed through the data ecosystem that is available for standard home monitors.”
Are there any other underwriting challenges besides the data itself?
“Besides the data itself, we do inspections. It’s difficult, and I haven't found a full solution yet to determine home quality. There are deferred maintenance issues that we can run into at an inspection time, which isn't a great experience for the consumer because we're saying you have to fix this or that. They thought the transaction was over, so they don't want to do it. There's not really a data source out there now. We've taken an initial step by looking at the roof condition. If it has a poor roof, maybe the rest of the home is also of similar poor condition, maybe not but it is something the underwriter should look at prior to binding not after. It could just be that it's that age of a home, and that roof is ready to be replaced anyway. That’s where we run into issues sometimes.”
With capital investment around manufactured housing insurance intensifying, how do you see this opportunity evolving?
“There's a lot of private money going into manufactured housing communities right now. They're buying them up from what historically may have been a mom and pop operation. These private money owners are much more sensitive and on top of the risks that they face as owner operators. They're re-examining their lease agreements, and they are enforcing insurance requirements because they don't want to be on the hook for a dog bite in the community, someone not buying fire insurance, or the person just up and leaving a repaired home because it's not their land underneath it. That results in blighted homes in the community that were otherwise desirable for all the residents. Owners are looking to protect themselves; they invest in resources to mitigate those types of risks.”
Can you encapsulate the size of manufactured housing? How big of a market is this? How many Americans are impacted from this perspective versus standard homeowners?
“Twenty-two million people own and live in a manufactured home - that includes individuals as well as families. The number of new homes built more than doubled in the ten years up to 2022. We’re seeing an increase in the number of people, especially as the baby boomers are looking to get seasonal homes or right-size their square footage. Manufactured homes are almost always going to be single floor living. They have manageable investment requirements from people looking to retire, so that's shifting as well.”
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