Insuring Your Tiny Home: What You Need To Know

Tiny houses are an increasingly popular choice for those looking to downsize and save money. While they are often cheaper, more energy-efficient and easier to maintain than traditional homes, they are also more vulnerable to damage. As such, insuring your tiny house is essential to protect your investment. The type of insurance you need will depend on whether your tiny house is on wheels or a fixed foundation, and whether it is professionally constructed or a DIY build.

Insuring a tiny house on wheels

Tiny houses are gaining popularity due to their affordability, energy efficiency, and ease of maintenance. However, insuring a tiny house on wheels can be a complex process. Here is a comprehensive guide to help you navigate the insurance options for your tiny home.

Understanding the risks

Before exploring insurance options, it is essential to understand the unique risks associated with tiny houses on wheels. Firstly, they are more vulnerable to theft compared to stationary homes. Secondly, they are exposed to wear and tear during transportation, increasing the risk of accidents or damage. Therefore, it is crucial to consider insurance to protect your investment.

RV Insurance

If you plan to move your tiny house frequently, RV insurance may be the best option. This type of insurance covers your home while parked and during transport. Basic RV insurance typically includes collision coverage, comprehensive coverage for events like theft, vandalism, and weather-related incidents, liability coverage, uninsured/underinsured motorist coverage, personal property coverage, and medical payment coverage. To qualify for RV insurance, your tiny house must meet the standards set by the Recreational Vehicle Industry Association (RVIA). Keep in mind that not all insurance companies offer the same coverage options, so review your policy carefully to ensure it meets your specific needs.

Mobile/Manufactured Home Insurance

If you plan to move your tiny house infrequently or not at all, mobile/manufactured home insurance may be a better fit. This type of insurance is similar to standard homeowners insurance and covers the home, your personal belongings, and liability claims. However, it does not cover the home or belongings while in transit. If you need coverage during transportation, you will need to purchase a transit endorsement or separate temporary coverage. Additionally, some mobile home insurance policies may have limited fire coverage due to the compact size and high risk of total loss in the event of a fire.

Security Measures

In addition to insurance, consider implementing security measures to protect your tiny house on wheels. This includes adding wheel locks and/or ball hitch locks when parked, installing security cameras, and equipping your home with a GPS tracking device to deter theft and monitor its location.

Cost of Insurance

The cost of insuring a tiny house can vary depending on several factors, including the insurance provider, the value and location of your home, its square footage, whether it is mobile or stationary, certification, and the deductible amount. On average, tiny home insurance policies can range from $600 to $1,000 per year, with RV insurance typically being more expensive than mobile home insurance due to the added risk of transportation.

In conclusion, insuring a tiny house on wheels requires careful consideration of your specific needs and circumstances. By understanding the available insurance options, implementing security measures, and comparing costs, you can make an informed decision to protect your tiny home investment.

Insuring a stationary tiny house

If your tiny house is stationary, you won't be able to cover it with a standard home insurance policy. Instead, you'll need to purchase a mobile or manufactured home insurance policy. Requirements for coverage may vary depending on the insurer and your state. For example, Progressive requires the tiny home to be factory-constructed and prefers certification from the National Organization of Alternative Housing (NOAH). Self-constructed units are usually ineligible.

Mobile/manufactured home insurance policies may provide coverage similar to a traditional homeowners insurance policy for stationary tiny homes. This includes:

• Dwelling coverage: If your mobile home (in this case, a tiny home) is damaged, dwelling coverage may pay to repair or replace the physical structure.
• Personal property coverage: Anything you own inside the home may be covered up to a set limited amount if lost or damaged in a covered incident.
• Personal liability coverage: If you're responsible for someone else's injuries or damages, personal liability coverage may cover you up to your policy's limits.
• Loss of use coverage: If your home is damaged in a covered loss, making it uninhabitable until the repairs are complete, loss of use coverage may pay for living expenses, such as meals and lodging, above what you normally spend.

The cost of tiny house insurance depends on various factors, including the type of coverage you need, your home's square footage, whether it's mobile or stationary, and whether it's certified. On average, a tiny home insurance policy can cost somewhere between $600 and $1,000 per year.

DIY tiny house insurance

Tiny homes are comparatively cheaper than traditional houses, but they are more vulnerable to damage and natural disasters. To protect your home and personal belongings from perils like theft, fire, and falling objects, you need tiny home insurance. Many tiny home insurance policies also include liability coverage, which can help during a lawsuit or cover medical expenses if someone is injured inside your home.

Tiny home insurance depends on the state, the insurer, and other factors. Firstly, you must determine whether your tiny home is movable or stationary as this will dictate the type of certification you need. For a stationary tiny home, you need certification from the National Organization of Alternative Housing (NOAH). For movable houses, the certificate should come from the Recreational Vehicle Industry Association (RVIA).

Once your tiny home is certified, you can choose an insurance provider. Some insurance companies that offer customized insurance policies for tiny houses include Strategic Insurance Agency, American Family Insurance, and Foremost Insurance Group. It is important to compare agencies and their rates to find the most competitive provider.

Your insurance policy should cover the replacement fee of the tiny house, along with all the contents and other structures on the property. Liability coverage is also important and can help you recover the value of the house, its contents if they are stolen or damaged, or cover medical expenses if someone is injured on your property. If you plan to move your tiny home, you will need a trip endorsement policy.

The insurance cost varies depending on the size and value of the tiny home, as well as the type of insurance you choose. On average, a tiny home insurance policy can cost between $400 and $1,500 per year, but prices can go up to $4,000. RV insurance tends to be more expensive than manufactured home insurance because it protects the home while in transport, which puts the home at greater risk.

Tips for Insuring Your DIY Tiny Home

Finding an insurance policy for a DIY tiny home can be challenging as insurers are hesitant to cover homes built by amateurs. Some insurers will inspect the tiny home and may ask for pictures of the wiring and plumbing to ensure the house meets all safety requirements. It is a good idea to take photos of the wiring as your home is being built to assist your insurer during the inspection and make your home more insurable.

Tiny house insurance cost

The cost of insuring a tiny house can vary widely, with prices ranging from $400 to over $1,500 per year. The price depends on a variety of factors, including the type of tiny house, its location, size, value, and whether it's mobile or stationary.

For example, a tiny home that is regularly transported will likely require a "full-timers" RV insurance policy, which will be more expensive than a standard policy. The cost will also depend on the coverage limits and deductible chosen by the owner.

Some insurance companies offer specific tiny house insurance, while others provide mobile home or RV insurance that can be used for tiny houses. It is recommended to compare quotes from at least three different insurance companies to ensure the best deal.

• Location and value: The location and value of the tiny home will impact the insurance cost. For example, homes in areas prone to natural disasters like hurricanes, tornadoes, or wildfires will have higher rates.
• Square footage: The size of the tiny home can affect the price, with larger homes costing more to insure.
• Mobility: Whether the tiny home is mobile or stationary will influence the cost. Mobile tiny homes will likely require a specialised insurance policy, which may be more expensive.
• Certification: If the tiny home is certified by a recognised organisation, such as the National Organization of Alternative Housing (NOAH) or the Recreational Vehicle Industry Association (RVIA), it may be eligible for lower insurance rates.
• Frequency of transport: The number of times a tiny home is transported can also impact the cost. A home that is frequently moved will likely require additional coverage, such as a transit endorsement, which will increase the overall cost.

When is tiny house insurance required?

Tiny house insurance is required in certain situations, depending on factors such as ownership status, financing, and mobility. Here are the scenarios in which tiny house insurance is typically necessary:

• Financing Requirements: If you finance your tiny house through a mortgage, bank, or other lender, you will likely be required to obtain insurance. This is similar to the requirements for traditional homes and vehicles, where lenders mandate insurance to protect their investment.
• Transportation and Mobility: If your tiny house is on wheels and you plan to transport it regularly, most states will mandate liability insurance. In this case, your tiny house is subject to the same insurance requirements as cars and Recreational Vehicles (RVs). To qualify for RV insurance, your tiny house must meet the standards of the Recreational Vehicle Industry Association (RVIA).
• Protection Against Risks: While not a legal requirement, tiny house insurance is strongly recommended to protect your investment. Tiny houses are vulnerable to various risks, including natural disasters, accidents during transit, and theft. Insurance can provide financial protection in case of unforeseen events.
• Certification and Standards Compliance: Some insurance providers and policies have specific certification requirements. For example, certain insurers may require certification from the National Organization of Alternative Housing (NOAH) or compliance with specific construction and safety standards.

In summary, the requirement for tiny house insurance depends on factors such as ownership, financing arrangements, mobility, and adherence to certification standards. While not always legally mandated, tiny house insurance is a prudent step to safeguard your investment against potential risks and liabilities.

Frequently asked questions