Deciding to downsize into a tiny house on wheels feels exhilarating. Just imagine all the money you will save living mortgage-free in a fun-sized dream home. But here is the thing, finding an insurance policy that will cover your unique dwelling can be challenging. Here is what you need to know about insuring towable abodes.
Building Codes and Zoning Regulations
Securing Homeowners Insurance for a Teensy Home on Wheels is so challenging. Darrell Grenz, of Darrell Grenz Insurance, says: "The tiny house movement is all about people living independently on their unique terms. So it just makes sense that the typical tiny house dweller lives in a structure that does not fit into a box or classification for an existing insurance program."
Virtually all standard forms of housing are required to comply with local building codes and zoning regulations, which determines a home's classification for insurance. Tiny houses on wheels do not adhere to rules created for traditional structures so their unique traits, including size and mobility, make them ineligible for conventional homeowners insurance.
So that you know:
- Local building codes set minimum safety and construction standards for both residential and commercial structures. The set of rules also establishes which types of construction projects need a building permit.
- Zoning regulations shape and also protect a neighborhood's physical character by dictating what kind of structures and activities are allowed in communities.
Personal Property Insurance
Some insurance carriers will cover a tiny house on wheels under a personal property policy if you make concessions like putting the house on a permanent or semi-permanent foundation, says Grenz. You may have to agree not to live in your tiny house on a full-time basis.
Another issue to consider, personal property coverage does not cover towing, which makes hitting the road in a towable abode a liability risk.
If you plan to travel with your tiny house, you can consider RV insurance, but there's a catch. "Many mainstream insurance companies will only cover tiny houses on wheels manufactured by a certified RV builder," says Grenz. Dwellings like these will feature a seal from the Recreation Vehicle Industry Association.
A few "good to know"s:
- A recreational vehicle is a towable unit designed for temporary living that's 400 square feet or less and built according to stringent standards set for park model RVs.
- While technically RVs are not considered permanent dwellings, most insurance companies offer a "full timer's" package that's similar to a homeowners policy.
- Many campgrounds across the country will only allow tiny houses on wheels to park on their premises if they have the RVIA seal.
Some insurance companies may offer to bend the rules for a tiny house without an RVIA seal, but that can be a slippery slope. At worst, you may wind up paying for a policy that doesn't protect your investment if it gets damaged says, Grenz.
How is that possible? Insurance companies can deny payouts if an adjuster discovers that a tiny home doesn't meet all the specific requirements that guarantee coverage. For example, many RV insurers require the permanent installation of specific types of appliances and facilities, which are all usually needed for an RVIA seal as well. If your tiny house doesn't fulfill all of those requirements, any insurance claims you make could be dismissed.
If you are living in a tiny house on wheels full time you need a policy that is covering you for this type of use, so it is best to work with an insurance carrier that specializes in coverage for alternative living structures in all shapes and sizes says, Grenz.
It is also a good idea to find an insurance provider before you buy or even build.
A good insurance representative can give you guidelines to consider when buying or before building your tiny dream home, so you don't wind up with an uninsurable property.