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Ocean City and Worcester County residents report lack of replacement‑value insurance for older manufactured and mobile homes
Summary
Local officials told the House Environment and Transportation Committee that older manufactured and mobile homes in Ocean City and Worcester County often cannot get replacement‑cost homeowners coverage, limiting owners’ ability to obtain conventional mortgages and increasing financial vulnerability.
Ocean City Mayor (Meehan) and Baltimore City housing officials told the House Environment and Transportation Committee that older mobile and manufactured homes in coastal areas face sharply reduced access to replacement‑value homeowners coverage.
Nicole Hart, deputy commissioner of Homeownership and Housing Preservation for the Baltimore City Department of Housing and Community Development, said legacy older adult homeowners in the city struggle to maintain homeowners insurance and that sudden rate increases and what residents perceive as arbitrary inspections can drive people to let policies lapse. She said that underinsurance or lack of a policy delays needed maintenance and can wheedle away wealth built through homeownership.
"We find that they're often juggling groceries, utilities, medical expenses, or other concerns, that the homeowner policy just didn't get paid," Hart said, and added that many legacy homeowners do not realize the obligation to buy insurance again once a mortgage is paid off.
Mayor Meehan described Worcester County and Ocean City as facing an acute problem: insurers, including some private carriers and the state's Joint Insurance Association (JIA), are offering only actual-cash-value coverage rather than replacement-cost policies on many older mobile and manufactured homes. "In Ocean City, we have 1,277 mobile and manufactured homes," he told the committee, saying the issue restricts mortgage financing because lenders commonly require replacement-cost coverage.
Meehan said many Ocean City mobile homes include stick-built additions that increase replacement cost but do not change the home's classification as a mobile structure for underwriting. He described the practical impact: owners who cannot obtain replacement-value insurance find it difficult or impossible to secure conventional mortgages.
The Maryland Insurance Administration has begun targeted outreach on this issue. Commissioner Grant told the committee the MIA held an informational hearing in October, solicited written comments and published a summary report on January 7. The MIA found that the JIA writes some dwelling fire form 1 policies in Worcester County but pays claims on an actual-cash-value basis, which may leave homeowners underinsured relative to replacement cost.
The administration and industry witnesses identified the rising cost of catastrophe reinsurance, and the way reinsurers model concentrated coastal exposures, as a major factor that limits insurer appetite for these risks. Grant said catastrophe modelling and reinsurance pricing take account of location, type and age of construction, concentration of values and exposure to specific perils.
Local officials asked the committee for continued attention and for state-level tools to address mortgageability and coverage for older coastal manufactured and mobile homes. The MIA said it will continue work and explore options with stakeholders.
This briefing produced no formal committee action. The committee received written comments from the Worcester County commissioners and heard residents' and officials' accounts that the limitation of replacement‑value coverage is an active barrier to financing and homeownership continuity in Ocean City and similar coastal communities.
