CoverTree, one of the first ever digital insurance solution for residents of manufactured homes, today announced the launch of insurance coverage in Arizona, Indiana, Michigan, New Mexico, Ohio, Illinois, and Tennessee after raising a total of $10 million in venture funding. The $10 million Seed round was co-led by AV8 Ventures and Distributed Ventures with participation from Detroit Venture Partners, Ludlow Ventures, and Annox Capital. CoverTree will use funding for team growth, state and product line expansion, expansion of technology that includes distribution portals and further automated underwriting, as well as investment in the company’s major partners.

The problem:

Beyond the densely populated metropolitan areas exists an alternative housing boom brought on by the pandemic, changing demographics, and supply chain issues for on-site building. Since 2010 [up to 2022], yearly manufactured home shipments have increased by more than 130% (U.S. Census Bureau’s Manufactured Housing Survey). A manufactured home is a prefabricated home, built in a factory and subsequently installed on-site. The category also includes modular homes, tiny homes, ADUs, and stationary travel trailers. They are no different than traditional homes in that both need insurance coverage. However, signing up for manufactured home insurance is not only more expensive, but it’s also more difficult due to the structural differences between the two.

The solution:

CoverTree is a Managing General Agency (MGA) innovating specialty personal lines of insurance with a current focus on manufactured homes. “Insurtechs and major carriers have historically ignored middle America, specialty insurance, and manufactured homes,” said Adarsh Rachmale, Co-Founder and CEO, CoverTree. “Specialty insurance is difficult to underwrite and distribute. A specialty insurance policy often passes through multiple pairs of hands before it ends up with the consumer—who ends up overpaying and getting the worst experience. We believe manufactured home insurance should be easy, modern, and affordable.”

With the goal of creating the new program, CoverTree worked in close collaboration with Markel® to develop “CoverTree’s Manufactured Home Program.” “The lack of data in manufactured homes made it compelling for us to build our own data sets and automate the underwriting. Our systems are built towards optimizing data network effects, learning from historical loss data,” said Divyansh Sharma, Co-Founder and CTO, CoverTree. “Many of our competitors have not updated their insurance products in over ten years—our dynamic systems allow for rapid product expansion.”

“Markel is excited to partner with CoverTree to benefit what has been an underserved market for many years. Our combined focus on ease of use, robust coverage offerings, pricing sophistication and technology will undoubtedly lead to a best-in-class product offering within the manufactured home insurance segment,” added Jeff May, Executive Underwriting Officer, Markel.

“Minimalist lifestyles and off-the-grid living are on the rise,” said Rishie Modi, Co-Founder, CoverTree. “As we look forward, we envision a full digital insurance coverage experience for rural and outdoor lifestyles.”

For many, manufactured construction is the future. “A lot of America doesn’t see manufactured homes in their neighborhood, but it’s a key part of the residential landscape in the country and core to the American Dream. To date, there are 22 million Americans living in manufactured homes, and that number is expected to grow.” (Manufactured Housing Institute) said CoverTree’s Rachmale.