If you fantasize about waking up in a place where you can see your entire abode from your bed or you fancy taking your home and all your belongings with you when wanderlust strikes, this might be a sign you should look into owning a tiny house. If you do find yourself thinking “small,” there are important things besides limited storage space to consider, not the least of which is tiny house insurance.
But first, let’s consider the tiny home living benefits:
- Custom-build your dream home – quickly
- Avoid getting into debt with a big mortgage
- Save on property taxes and home maintenance expenses
- Get off the grid, live minimally and reduce your environmental footprint
- Have the flexibility to up-stakes and move whenever the mood hits
- Even potential rental income if the tiny house is used as a guest or vacation home.
Still, along with the myriad benefits come a host of drawbacks. While the tiny home movement is gaining in popularity, would-be tiny house owners and builders are coming up against issues around zoning, building codes, and finding the right insurance coverage. Let’s get into it.
How to insure your tiny house
A few short years ago, it was hard to find any insurance company that would take on a tiny house. Unless it was classified as a recreational vehicle, most insurers didn’t quite know what to do with them. Nowadays, the tiny home movement is growing and just like the mobile home movement back in its day, a few long-sighted insurance providers and agents are gradually coming on board and figuring out ways to underwrite and offer specialty coverage for them.
If you are looking to build or buy a tiny house, it’s a good idea to speak with an insurer before you buy or begin construction on one.
Your 3 tiny house insurance options
To simplify an already complicated process, you may want to look for a company that specializes in providing insurance for alternative living structures – if there are any in your state.
There are a lot of variables to consider, but for insurance purposes, tiny homes can be categorized in three ways:
1. Fixed-foundation tiny house built by certified builder
A typical home insurance policy will cover you for the contents of your home, the structure of the home, and liability in case someone gets hurt on your property. However, because of the unique facets of a tiny home, there are exclusions to keep in mind. A conventional homeowners policy won’t cover theft of the house itself or any damage to the house when it’s in transit.
You can buy either a regular home insurance policy or a tiny home-specific policy (if it’s available) as long as a certified builder built your home and you plan on moving it rarely, if ever. Some providers will want to do an on-site inspection, and may also require a certified electrician to perform an inspection of your electrical system.
2. Mobile tiny house built by certified builder
If your tiny home is of the moveable variety, it gets a bit more complicated as it’s a combination of a residence and a recreational vehicle. RVs are defined as towable units with a maximum size of 400 square feet, built to stringent standards, and designed for temporary living. To get the seal from the Recreational Vehicle Industry Association (RVIA), your home will need to be built by one of their members and have a VIN attached.
If tiny houses on wheels are considered RVs and not suitable for permanent residence, how do you get around that if you plan to live in it all year? The good news is most insurance companies have “full timer’s” packages similar to homeowners policies that treat the home as a dwelling as opposed to an RV. However, the homeowners policy will no longer be in play if you connect your house to a tow switch. In this situation, ideally you want your insurer to include a trip endorsement that adds auto coverage in the form of comprehensive, collision and liability coverages to protect you while you’re on the road.
3. Fixed or mobile tiny house built by non-certified builder
The biggest benefit of tiny-house-specific insurance is that you can get coverage even if your home wasn’t built by a certified builder, since most regular homeowners policies will only cover certified constructions. If you’ve gone the DIY route, it’s a good idea to document your entire build with photos in case your insurance provider requires on-site and electrical inspections.
If you have a tough time finding tiny home coverage in your area, consider checking out companies that offer coverage to manufactured homes. If you try to go with a regular home insurance policy, keep in mind that if your house doesn’t comply with local building codes and zoning regulations, because it’s below a certain size and/or is on wheels, it may not qualify for a regular homeowners policy either.
The basic question for tiny home insurance
Despite the current confusion and lack of regulation in the movement’s nascent state, it looks like the popularity of tiny houses – and the freedom they offer – will continue to gain momentum. And sooner or later (hopefully sooner), the majority of insurance providers will figure out the best way to offer protection, and local authorities will standardize zoning ordinances and building code laws.
Until then, it may sound simplistic, but to ensure you’re adequately covered in the event of a claim, consider the type of property you actually own and ask yourself what risks your tiny home might pose.
For example, if your home is on a fixed foundation and built by a certified builder, ensure your coverage reflects any damages the property might sustain in that location. Or if your tiny house is on wheels, check that you’re covered to take it on the road and around other motor vehicles. And lastly, if you built your tiny home yourself and it’s non-certified, your coverage should protect the structure and the people it might hold as best it can.
Here’s to living big in your tiny house!