Sheri and I recently watched a documentary on tiny homes. We enjoyed it and talked about could we live in one, what would it look like, and whether Sheri could build it (she likes power tools). I began thinking about home insurance for tiny homes; which carriers will write a policy for that, what issues may need to be considered, and what underwriters will want to know.
Tiny homes are a relatively young movement a growing number of people have embraced as part of a simpler lifestyle, to save money, have the freedom to take their home with them where ever they decide to go, to reduce their environmental footprint, or some other reason. They come in all shapes and sizes but usually have between 100 to 400 square feet. Some are site built on a lot with a permanent foundation while others are built on flatbed trailers and can be pulled behind a car or truck. To help guide us, I’ll make a distinction between tine homes that are “site built” versus those built on a trailer.
Site Built: After talking with most of my home insurance underwriters I have not found any standard carrier who will write a policy on a tiny home today. Most will write a home insurance policy on a small site built home that’s less than 1,000 square feet, but will not write on a home that’s “classified” as a tiny home. One of my brokers believes they will write a specialty policy on a tiny home if it’s a site built home.
Trailer Built: I wasn’t terribly surprised by what the home insurance underwriters reported. I figured at least one of the companies who writes travel trailers or campers would write a tiny home built on a flatbed trailer. Unfortunately, I haven’t found one that will today, including my brokers.
Potential Issues: As with anything new, insurance companies are slow to write it until they can study its risk. Some of the risks insurers will need to address, as will anyone who wants to own a tiny home include:
- Who built it? Many carriers are reluctant to write a standard home policy for a home where additions or remodeling is performed by someone other than a contractor. Many tiny homes are built by their owners who may have no formal training in wiring, plumbing, framing, etc.
- Building Codes: All site built homes are built per local written building code at the time of construction. Does your tiny home meet current code? Did it pass inspection?
- Transportation Compliance: If you’re building your tiny home on a flatbed trailer, will it meet whatever local or federal guidelines exists for a trailered home (brakes, lights, etc.)?
- Local laws: Is your home compliant with local laws and ordinances? These may differ from building codes, such as, how long a trailered home can be onsite, etc.
Many of the underwriters I spoke with believe their companies will offer home or trailer insurance in the future as companies have for individuals who drive for Uber or Lyft. I will continue to search for companies who do provide such a solution and will update my findings when something changes. Let me know if you found an insurance company that will write a tiny home. What do you think? Share your thoughts, questions, and experiences with me on my Facebook, Google +, and LinkedIn pages. I’d love to hear from you!