Tiny homes are the newest trend and their popularity is on the rise. They are efficient, affordable, minimalist – and confusing to insure.
Due to the fact that tiny homes come in various types and are used in various ways, finding the right insurance for one is not as cut and dry as you would hope. You can start your search by breaking down the options and determining what is right for your little dwelling.
A tiny home is precisely what it sounds like – a very small house. There are two main categories of tiny homes: homes that are on wheels and can be moved around from place to place, and homes that are stationary.
The insurance needs will differ between these two categories. A house on wheels needs coverage for transportation, to protect it while it is on the road. In addition to that, you will need coverage for personal property inside the home as well as liability coverage for injuries or damage done either during transportation or while in a campground or RV park. Your auto insurance will likely extend liability to the house when it’s on a trailer and being towed, but that doesn’t cover you when not on the road.
For a stationary home, your coverage needs will be slightly different. You will need structure coverage in case anything happens to the building itself, and again you will want personal property coverage. If the home is on a lot where there are other buildings, like a storage shed, you need to cover that as well. Finally, your tiny home needs liability coverage as any other traditional house would.
Your specific coverage needs will vary based on these two factors as well as several additional factors.
There are a few policy types you can choose to cover your tiny home.
In some cases, a tiny home on wheels may be insured as an RV, but it must meet the Recreational Vehicle Association’s standards and have a VIN. Some, but not all, tiny house builders meet these specifications. If that is the case with your tiny home on wheels, an RV policy is your best bet – even if you live in the tiny home full time, you can get a full-timer’s RV policy. This policy will cover you for transportation as well as providing vacation liability and personal property coverage. Click here for our Best RV Insurance list.
If your home does not qualify as an RV, your next best bet is to look into mobile home insurance. These plans are designed mainly for full-time residences and provide all of the coverage of a homeowner’s policy, along with available coverage for occasional moving of the house.
If your tiny home is site-built, your options are a bit more varied. First, if you have built the home on the same property as a larger, primary residence and plan to use it as a guest house, it may be covered under the primary insurance policy as a separate structure.
If that is not the case, you can look into specialty dwelling insurance programs. Depending on whether or not the house has a foundation it may be classified either as a manufactured home or as a regular dwelling.
From there, the final test is whether or not you live in your tiny home full time; if not, it will be classified as a seasonal home and insured differently.
Insuring tiny houses is difficult, there is no way around it, and because there is so much variation in the homes, we are unable to guarantee that all of our picks will cover every possible home. That said, we started our search with specialty insurers that are known for taking homes other insurance companies turn down.
We chose companies that offer insurance for both site-built dwellings and for mobile and manufactured homes. We also looked for companies that offer RV coverage as well, but the main focus was on companies that insure the largest variety of specialty homes.
While the choices are limited, we still looked for companies with a good reputation. A company that will not pay out on claims is not worth your premium dollars. Our choices also cover the widest geographical area possible.
These three companies are known for specialty home insurance programs and for working with homes that are difficult to insure.
Foremost is a subsidiary of Farmers Insurance Group, and they have been writing specialty insurance for decades. They started out as a mobile home insurer, which means they have a lot of experience with that type of policy. They also write a wide range of specialty dwelling coverage, from vacation homes to low-value dwellings – and they also write RV insurance.
There is a good chance Foremost can insure your tiny home, and they will back it with the financial status of one of the biggest insurance groups in the country.
When it comes to specialty dwelling insurance, American Modern is one of the best. A lot of other insurance companies partner with American Modern to handle the homes they cannot cover. They have policies for seasonal homes, low-value dwellings, manufactured and mobile homes, and more.
Among specialty dwelling insurers, American Modern has a good reputation. They may not be able to insure every tiny home, but they’re one of your best bets to get it covered.
If you are really struggling to get your tiny house insured and specialty dwelling companies are not working out, we recommend turning to this insurance agency, which has partnered with Lloyd’s of London to create an insurance policy specifically for tiny homes. While the coverage is currently only available in a handful of states, the agency is working to get licensed across the country and plans expansion soon.
Lloyds of London is a well-known and very stable specialty insurance company, and although there isn’t yet much in the way of information on these policies, they certainly have the backing of a good underwriter.
It is always worth checking in with the company that writes your current home insurance or even your auto insurance to see what options they may have available for specialty home insurance. Even if they do not write it directly, they may partner with another company and even provide a multi-policy discount.
If you are having trouble finding the right insurance, it’s a good idea to try working with an independent agent. They can shop your tiny home around to various insurance companies and with different policy types to see if you can find a good fit. It will save you time and get a pro on the case – there are several agencies across the country that focus on helping tiny homeowners find coverage.
We recommend getting an idea of your insurance options before you buy or build a tiny house. Because insuring a house of any kind that is built by a certified builder is easier, you may want to reconsider any DIY plans you have – but if you really do want to build it yourself, consult with an insurance agent before you get started. Knowing what you are in for before the build is complete will prevent any surprises when you try to get insurance later.
Because tiny homes are new to the insurance market and straddle the line between several possible types of home policy, they are a challenge to insure. As their popularity grows, there will likely be more insurance companies offering tiny home-specific policies. In the meantime, check out all of your options, and choose the coverage that best meets your specific needs.