Tiny Home Insurance: Comprehensive Guide to Types, Challenges & Coverage

Has finding insurance for a tiny home been a headache? There are so many different types and what are the rules?

This guide will break down everything you need to know about tiny home insurance.

We’ll cover the definitions, types of insurance, challenges, and coverage.

Learn how to protect your tiny house without breaking the bank or getting overwhelmed.

Disclosure: This post may contain affiliate links, meaning I can earn commissions. If you decide to purchase through my links, it is at no cost to you.

Tiny Home Insurance – Definitions & Terms to Know

• Park Model Insurance: Suitable for temporary, vacation, or full-time residences.
• Airbnb Coverage: For tiny homes used as short-term rentals.
• Tiny Home Villages: Coverage for multiple units in a community setting.
• Trip Collision Coverage: Protects the home during specific transit periods.
• Rental Reimbursement: Compensates for loss of income due to covered incidents.
• Off-Grid Solutions: Policies accommodating non-traditional utilities.
• Wood Stove Heating: Coverage for homes using wood stoves as primary heat sources.
• Theft Protection: Safeguards against potential theft of the tiny home or its contents.
• GPS Tracking Loss: Coverage for homes equipped with tracking devices.
• Appliance Loss: Protects against the loss of essential appliances.
• Work Campers and Personal Liability: For individuals living and working from their tiny homes.
• Professionally Converted Vans and Skoolies: Coverage for professionally modified mobile living spaces.
• Accessory Dwelling Units (ADUs): Policies for tiny homes serving as secondary residences on existing properties.

What type of Insurance do you need for a Tiny House?

Jumping into the tiny house movement will bring on many challenges. One of those is insurance.

The type of insurance you need depends on the following:

• Mobile or stationary vs permanent foundation
• Part-time versus full-time (permanent residency) living
• Homeowner vs tenant occupied (Airbnb)
• Professionally built vs DIY

Specialized Tiny House Insurance Coverage Options

Here is a quick cheat sheet for the coverage options for your tiny house.

Insurance for a Mobile Tiny House on Wheels (THOW)

Mobile tiny houses are treated like RVs and require a different type of insurance.

RV insurance covers travel-related risks but may not cover permanent residency.

Mobile tiny houses also face issues with zoning laws and don’t have to meet building codes. Some areas don’t allow tiny houses on wheels to be parked permanently.

This can affect your ability to get insurance. Insurers often require proof of legal parking and residency.

If your tiny house is on wheels but used as a full-time residence, it can be tricky to insure.

Some insurers may require it to be certified as a park model RV or ANSI A119.5 compliant. Getting your tiny house on wheels NOAH certified could make getting insurance easier.

Insurance for a Tiny House on a Permanent Foundation (THOF)

A stationary tiny house is on a permanent foundation. It needs standard homeowners insurance.

These policies cover:

• Structure – the tiny house structure
• Personal property – the contents inside the structure
• Liability – if someone gets hurt on the property

Differences between insurance coverage for a mobile tiny home vs. a stationary one

Mobile Tiny Home (On Wheels) Insurance:

• Treated like an RV or travel trailer.
• Requires RV insurance covers accidents while towing, roadside assistance, and contents inside.
• Covers risks during travel, like crashes, theft, and storm damage on the road.
• Does not cover the personal items in the structure.

Stationary Tiny Home (On a Foundation) Insurance:

• Treated like a traditional home or ADU
• Requires homeowner’s insurance, dwelling policy, or a specialized tiny home policy.
• Covers risks like fire, theft, and natural disasters while parked on a permanent foundation.
• If the home is being towed, then another type of insurance would be needed for traveling.

Hybrid insurance policies for Tiny Houses

As tiny homes offer a creative and affordable housing solution, some insurers have developed hybrid policies to address their unique needs.

These policies blend elements of both RV and homeowners insurance to provide a versatile coverage option.

Who Are Hybrid Policies For?

Hybrid policies are designed for:

• Mobile Tiny Houses: Tiny houses on wheels (THOWs) that are occasionally moved but not used exclusively for travel.
• Stationary Tiny Houses: Tiny houses that remain in one location for most of the time but may require coverage for short-distance relocations or legal classifications that don’t fully align with traditional homeowners insurance.

What Do Hybrid Policies Cover?

These policies cater to the dual nature of tiny houses, offering flexibility and comprehensive protection:

1. Structure Coverage: Protects the physical home, whether it’s stationary or on wheels, against risks like fire, theft, and storm damage.
2. Travel Endorsements: For mobile units, hybrid policies can include coverage for the home while it’s in transit.
3. Liability Protection: Covers injuries or property damage caused by accidents on the property or during transit.
4. Personal Belongings: Protects the contents of the tiny house, from furniture to electronics.
5. Temporary Housing Costs: If the home is damaged and unlivable, some hybrid policies provide compensation for alternative housing.

Why Are Hybrid Policies Offered?

• Versatility: Tiny houses blur the line between RVs and permanent homes. Hybrid policies fill the gap by offering protection for homes that don’t fit neatly into one category.
• Flexibility: For tiny house owners who occasionally move their homes but primarily use them as a stationary residence, these policies provide tailored solutions.
• Affordability: By combining RV and homeowners coverage elements, insurers can create cost-effective plans that cater to specific needs.

What Does Tiny House Insurance Coverage Include?

Builder’s Risk Insurance

Ensure that your builder carries Builder’s Risk Insurance to protect your tiny home during the construction phase. This coverage typically ends once the build is complete, so it’s crucial to have your insurance policy ready to avoid any gaps.

Dwelling Coverage

Pays to repair or replace the physical structure if damaged. This covers repairs or replacement costs if your tiny house gets damaged. It can include damage from fire, storms, or other accidents.

Liability coverage

This covers legal fees and damages if someone gets hurt on your property. This is to protect you from expensive lawsuits.

Insurance Endorsements for Tiny Houses – Adding Optional Coverages

An insurance endorsement is like a special add-on to your insurance policy. It changes or adds extra protection to what your insurance already covers.

While these add-ons increase your premium, they can be invaluable in providing comprehensive protection for your tiny house.

• Trip endorsement: For tiny houses on wheels, covering the home while in transit.
• Theft and vandalism This covers losses if your tiny house or its contents are stolen or vandalized. Given the mobility of tiny houses, this is crucial. Believe it or not, theft could occur.
• Natural disasters This covers damage from natural events like floods, earthquakes, or hurricanes. Depending on where you live, this could be very important.
• Loss of Use Coverage: Covers additional living expenses, such as meals and lodging, if the home becomes uninhabitable due to a covered loss.
• Transport Coverage: When hiring a company to transport your tiny home, confirm that they have appropriate liability and cargo insurance.

Insurance Considerations and Challenges for Tiny Houses on Wheels

Higher Risk Acknowledgment

Tiny houses on wheels are at a higher risk of damage due to travel. After all, there are other humans, animals, and items on the road.

Limitations on Frequent Movement

Some companies do not provide coverage if the tiny home is moved regularly, indicating a preference for stationary use.

Challenges in Insuring Tiny Houses on a Permanent Foundation

Factory-Constructed Requirement

Some companies specify tiny homes must be factory-constructed. Self-constructed units are ineligible.

Preferred Certification like NOAH or RVIA

Some insurers prefer tiny homes to have certification from the National Organization of Alternative Housing (NOAH), which can facilitate the insurance process.

Non-standard building codes and regulations

Tiny houses often don’t fit into standard building codes. These codes vary by location and can be strict.

Some areas require minimum square footage that tiny homes don’t meet.

This makes it hard to get standard homeowners insurance. Insurers may see tiny houses as high-risk due to these code violations.

Insuring DIY Tiny Homes

Many tiny houses are DIY projects – over 50% (link to tiny home stats article).

Insurers are wary of non-professional construction. This adds another layer of difficulty. This can lead to higher premiums or outright denial of coverage. 

How to Overcome The Challenges of Insuring a Tiny Home on a Foundation

Working with Specialized Tiny House Insurance Providers

Specialized insurance providers understand the unique needs of tiny houses.

These providers have experience with non-standard building codes and mobile units. They can provide coverage options that standard insurers can’t.

Another option is working with insurance brokers. Brokers can help you find the right policy by navigating the complexities of tiny house insurance.

They have access to multiple providers and can negotiate better terms.

Ensuring your Tiny House meets Local Codes

Compliance with local building codes is key. Start by researching the codes in your area. Ensure your tiny house meets all requirements.

This may involve getting permits for electrical and plumbing systems.

Tiny Home Certifications – A Smart decision

Hiring a professional to inspect your build can also help.

A certified inspection can make insurers more comfortable because they can ensure your structure is built to a standard.

A NOAH certification can help show the structure meets certain standards that insurance companies trust.

Tiny House Communities Could Make Getting Insurance Easier

Some regions have specific tiny house communities. These communities often have relaxed building codes or community coverage.

Moving your tiny house to one of these areas can simplify the insurance process. This could include property and outbuildings, as well as liability considerations for tenants.

Keeping detailed records of your build

Detailed records can make a significant difference. Document every step of your build. Keep receipts for all materials and labor.

Take photos and videos of the construction process. This documentation can help prove the quality of your build to insurers.

Exploring Alternative Tiny House Insurance Options

If standard homeowners insurance isn’t an option, explore alternatives. RV insurance can be a temporary solution for stationary tiny houses if it is not insurable another way.

Make sure the insurance covers permanent residency if that’s your plan.

Another option is tiny house-specific insurance policies. Some insurers offer policies designed for the unique aspects of tiny homes.

Personal property insurance can also be considered. This covers your belongings inside the tiny house. While it doesn’t cover the structure, it provides some level of protection.

Factors Affecting Insurance Costs

Size and Value of the Tiny House

The size and value of your tiny house significantly influence insurance costs. Larger tiny houses or those with high-end finishes and appliances typically cost more to insure.

Insurers assess the replacement cost of the home, which includes materials and labor.

Take a detailed inventory of your tiny house’s contents to get an accurate insurance quote. Pictures and videos help capture the inventory.

Location and Associated Risks

Location impacts insurance costs due to varying risks. Providers assess local crime rates, building codes, and even the home’s proximity to emergency services.

Credit Considerations

Your credit score can influence the cost of your insurance policy.

It’s advisable to consult with multiple insurance companies to understand how your credit may affect premiums, as differences can be significant.  

Reducing Your Tiny Home Insurance Costs – How to Save on Tiny House Insurance

Always get quotes from multiple providers to compare costs.

Safety Features for Discounts

Some insurers might offer discounts for safety features like smoke detectors, alarm systems, or even having a tiny house located in a gated community.

Bundling Your Products

Bundling your tiny house insurance with other policies, like auto or health insurance, might also reduce costs.

Comparing Quotes and Negotiating

Don’t hesitate to negotiate for better rates based on the multiple quotes you received.

Highlighting any safety features or low-risk factors specific to your tiny house can sometimes lead to additional discounts.

Deductibles and Coverage Limits

Deductibles and coverage limits also affect overall insurance costs. A higher deductible usually means a lower premium, but you’ll pay more out of pocket if you need to file a claim.

Coverage limits determine the maximum amount the insurer will pay for a covered loss. Ensure the limits are adequate to cover the replacement cost of your tiny house and its contents.  

Long-term Tiny House Insurance Cost Considerations

Annual Policy Reviews of Your Tiny Home Insurance

Regularly reviewing your policy ensures it meets your current needs. As your tiny house ages, its value might decrease, potentially lowering your premiums.

Adding new features or renovations might require updating your coverage.

Keeping Up with Market Trends

Stay informed about market trends in tiny house insurance. New policies or providers entering the market can offer better rates or coverage options.

Joining tiny house communities or forums can also provide insights into the latest insurance trends and recommendations.  

Common Mistakes to Avoid with Insurance for Tiny House on Wheels

Underinsuring Your Tiny House

One of the biggest mistakes new tiny house owners make is underinsuring their home. This happens when the coverage amount is less than the cost to replace your tiny house.

Make sure to review your policy regularly and update it as needed. If you make any upgrades to your tiny house, inform your insurance provider to adjust your coverage.

Not Reading the Policy Details

Another common mistake is not reading the tiny home insurance policy details. Many people just glance at the summary and miss important details in the fine print.

If you don’t understand something, ask your insurance agent to explain it.  

Final Thoughts on Making Sense of Tiny Home Insurance

Insuring a tiny house can be tricky due to non-standard codes and mobile nature. Costs depend on size, value, and location.

Coverage includes liability and property damage, with options for theft and natural disasters. Top providers offer flexible and comprehensive policies.

Finding the right insurance for your tiny house is so important. It protects your investment and provides peace of mind. Start by assessing your coverage needs, comparing quotes, and considering additional coverage options. Don’t forget to check for discounts and avoid common mistakes like underinsuring.

Frequently Asked Questions