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Can You Get Tiny Home Insurance?

Tiny home insurance is available from national and small insurance carriers but insuring a tiny house can be slightly more challenging than insuring a conventional home. Generally, tiny house insurers will require you to obtain certifications that prove the tiny house meets certain building codes and zoning regulations. Depending on whether your tiny home is stationary or will move around regularly, you will likely purchase manufactured home insurance, mobile home insurance or RV insurance.

The economic and environmental benefits of being a tiny homeowner may be worth the extra steps involved in buying home insurance. Keep reading to learn who will insure a tiny home and how much it will cost.

Why Does a Tiny Home Need To Be Insured?

If your home is being financed, then the lender will require that you buy home insurance to get approved for the loan (similar to financing a conventional home or condo). Fortunately, the tiny house trend has been gaining traction and tiny house insurance is becoming increasingly available from large and small insurance carriers.

If your tiny house will be moving around regularly and can be classified as an RV, then you will likely be required by law to buy RV insurance. Similar to auto insurance, there are insurance minimum requirements that you must meet before you can legally drive on the streets — even if it is your primary residence.

If your tiny house will be mostly stationary (you don't plan on transporting it regularly like an RV) and you're financing it completely out-of-pocket, then there is no federal or state law requiring tiny house insurance. However, it may still be worth purchasing as tiny homes may be more vulnerable to weather perils, like storms and hail. Mostly stationary homes will likely be insured with a mobile home or manufactured home insurance policy.

What Kind of Insurance Do I Need for My Tiny Home?

The type of tiny house coverage you need will depend on whether your tiny house is mobile or mostly stationary.

Insurance for a Mobile Tiny Home

If your tiny home will be on the road regularly, then you will likely need to buy RV insurance.  With an RV insurance policy, you will have access to several auto insurance coverages, such as;

  • Bodily injury liability

  • Property damage liability

  • Uninsured/underinsured motorist coverage

  • Collision coverage

  • Comprehensive protection

  • Personal property coverage (protects personal belongings inside your tiny house)

To qualify your tiny house for RV insurance, some insurers will require you to obtain a Recreational Vehicle Industry Association (RVIA) certification or some equivalent. This certification tells the insurer that your tiny house is compliant with RV rules and regulations, thereby reducing the insurer's overall risk.

If your home is being financed, then the lender will require that you buy home insurance.

Insurance for a Stationary Tiny Home

Manufactured home or mobile home insurance is recommended if your tiny house is stationary. A manufactured home or mobile home insurance policy covers most perils in a standard homeowners insurance, including:

  • Dwelling: Covers the structure of your tiny house

  • Additional structures: Covers fences, detached garages, sheds and other structures

  • Personal property: Covers personal belongings inside your tiny home (e.g., electronics, clothes, furniture)

  • Liability: Pays for property damage or medical bills that you are liable to cover (e.g., guest trips inside your home and incurs a medical bill)

  • Loss of use: Pays for approved living expenses if your tiny house is temporarily uninhabitable after a covered peril (e.g., tiny house is being repaired after a fire)

If your tiny house is mostly stationary but you intend to move it at some point, you can purchase trip collision coverage. Trip collision coverage pays for damages to your home if it is damaged in a collision while being transported.

Keep in mind that some insurers will deny insurance coverage if you intend to move your tiny house frequently — in this case, you may need to do more shopping around or buy RV insurance.

Insurance for a Tiny Home You Build Yourself

If you build your tiny house instead of purchasing it, you will still need to meet insurance requirements if you have a lender financing the DIY project. However, securing insurance can be even more challenging if you have no building experience. Tiny home insurers may be hesitant about working with inexperienced builders as mistakes can lead to violations of local building and zoning regulations.

If you're building your home, it's best to consult with tiny house specialists, like those from the National Organization for Alternative Housing (NOAH). Getting professional advice can help you avoid building mistakes that can disqualify you from tiny house insurance and legal penalties for local violations.

If your tiny house will be moving around regularly, you will likely be required by law to buy RV insurance.

How Much Is Tiny Home Insurance?

The average cost of a tiny home insurance policy is $850 per year according to NOAH. Some insurers may offer RV insurance or motorhome insurance for less than $1,000. The actual cost will depend on multiple factors, such as:

  • Square footage

  • Number of household members

  • Age

  • Replacement cost value of tiny house structure

  • Value of personal belongings

  • Whether your tiny house is mobile or stationary

  • Deductible

  • How frequently you transport your tiny house

  • Claims history

  • Credit score

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Which States Allow Tiny Homes?

There does not appear to be any state-level law that bans the use of tiny houses as a primary living residence, However, tiny houses are subject to local laws that govern residential regulations.

For example, in Fresno, CA, tiny houses must meet the following conditions:

  • Must be registered with the California DMV

  • Meet ANSI requirements

  • Must be towable by a bumper hitch, frame-towing hitch or fifth-wheel connection

  • Tiny house cannot be moved under its own power

  • Have at least 100 square footage on first floor

  • Have detached self-contained units for cooking, sleeping, toiletry and other daily functions

  • Designed to look like a conventional building structure

Mostly stationary homes will likely be insured with a mobile home or manufactured home insurance policy.

To learn more about living in a tiny house in your area, consult your local governing agency that handles housing codes and regulations.

How Much Do Tiny Homes Cost?

Purchasing a tiny house will typically cost anywhere from $8,000 to $150,000 according to Rocket Mortgage. The average cost can be narrowed between $30,000 and $60,000. Generally, the cost will vary based on:

  • Tiny house square footage

  • Construction of additional levels above the main floor

  • Type of building materials

  • Access to utilities

  • Added amenities and appliances

Building your tiny house yourself can result in savings, but it can be a challenging task that requires studying local zoning laws, securing building materials and more. Mistakes in DIY construction attempts may also disqualify you from getting approved for tiny home insurance.

Still, tiny houses may be an affordable alternative for first-time homebuyers that are interested in an economical and downsized lifestyle.

Insurers may be hesitant about working with inexperienced builders as mistakes can lead to violations of local building and zoning regulations.

FAQs

Is it hard to insure a tiny home?

Finding insurance for tiny homes can be challenging because you will need to meet zoning laws and restrictions and insurers may deny insurance coverage if you move your tiny house regularly. Getting a certification from the National Organization for Alternative Housing (NOAH) or the RV Industry Association can improve your chances of getting approved for insurance.

What is the legal definition of a tiny home?

A tiny home is generally considered a dwelling that is 500 square feet or less, excluding lofts (a floor level above the main floor). However, there is no universal definition and sizing and other qualifiers can vary.

What are the disadvantages of a tiny home?

Beyond the additional hurdles of securing tiny home insurance, tiny house owners may struggle with less living space and owning a primary residence that may not appreciate in value. Some tiny houses also lack permanent fixtures, like plumbing.

Do tiny homes depreciate?

It is generally the underlying land of a conventional home that appreciates in value and this opportunity may not be available to tiny houses that are frequently on the move. If the tiny house can be classified as an RV, then it is more likely to depreciate in value as it experiences wear and tear and accrues mileage, similar to a conventional vehicle.

Are tiny houses permanently connected to all utilities?

Not all tiny houses have permanent access to public utilities. Tiny house owners may need to take extra steps to secure certain utilities, like installing solar panels to get electricity.

Insuring Your Tiny Home

The tiny house trend has been growing in popularity as more people are downsizing and considering reducing their ecological footprint. Living a more green lifestyle is always a noble pursuit but carrying tiny home insurance may be one of the requirements in your journey.

Let SmartFinancial help you find affordable tiny house insurance companies to cover your tiny home and personal belongings. Just enter your zip code below or call 855.214.2291 to receive your free insurance quotes today.

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