Tiny House Insurance: How to Insure Your Tiny Home

Tiny houses are becoming increasingly popular in the United States—after all, these miniature homes are inexpensive, energy efficient, and simple to maintain. Furthermore, they provide a simpler lifestyle, with no room for clutter or unnecessary items (Marie Kondo would be proud).

Even though tiny houses are, well, tiny, they can still cost tens—or even hundreds—of thousands of dollars, so you should protect your investment with a good insurance policy. Here's what you need to know about tiny house insurance.

What Is a Tiny House?

A tiny house is precisely what it sounds like: a very small house. While there are no official size restrictions, tiny houses typically range in size from 100 to 400 square feet. According to U.S. Census Bureau data, the median size of newly constructed single-family homes in 2020 was 2,333 square feet.

Tiny houses can be either mobile (and thus moveable) or stationary. This distinction, as well as how you use your home, determines the type of insurance you require.

RV Insurance for Tiny Houses

If your tiny house is on wheels and you intend to move it frequently, RV insurance may be the best option because it protects your home while it is parked and in transit. Because RV insurance is designed for travelers, it includes provisions that other options do not, such as collision coverage. To be eligible for RV insurance, the tiny house must meet the Recreational Vehicle Industry Association's standards (RVIA).

These types of coverage are typically included in basic RV policies:

• Collision—If your tiny house is damaged in an accident with an object or another vehicle, regardless of fault, this coverage kicks in.
• Comprehensive—Also known as "other than collision," this coverage includes events beyond your control, such as theft, vandalism, fire, falling objects, weather-related incidents, and animal collisions.
• Liability—It aids in the payment of property damage and injuries caused by you.
• Uninsured/underinsured motorist—This protects you if your tiny house is hit by someone who does not have insurance or does not have enough insurance. It assists in the payment of damages to your tiny home, personal injuries, and lost wages if you are unable to work.
• Personal property—As the name suggests, this covers your personal property if it is lost, damaged, or destroyed.
• Medical payment—In the event that your tiny house is involved in an accident, this helps cover medical bills for you and your passengers.

Because not all insurance companies provide the same range of coverage options, you should review your policy to ensure it provides the coverage you require. If it does not, supplement it with endorsements or a separate policy. If your policy does not cover personal liability, for example, you could get a cheap renter's insurance policy that covers both your personal property and your personal liability.

Mobile Home Policies for Tiny Houses

If you only intend to move your tiny house a few times a year (or not at all), and it was built by a NOAH-certified builder, a mobile (or manufactured) home insurance policy may be your best bet.

A comprehensive mobile home insurance policy is similar to standard homeowners insurance in that it protects the home, your personal belongings, and liability claims. Unlike RV insurance, however, mobile home insurance does not cover the home or your belongings while your tiny house is being transported.

You'll need a transit endorsement for that. The policy must be in place before you transport your tiny house, which means you must notify your insurance company ahead of time so that your policy can be updated.

A named peril policy is another option for mobile home insurance. These are relatively inexpensive policies that cover only the causes of loss specified in the policy. This means that if your tiny house is damaged by a peril not covered by the policy, you will be responsible for any repairs. As a result, while a named peril policy can save you money, the additional risks may not be worth it.

Tiny House Insurance Specialists

There are a few small companies that provide tiny-house coverage, and that number is likely to grow as the popularity of tiny homes grows.

These companies typically cover any traditional or alternative living structure, such as DIY units, off-the-grid cabins, micro homes, storage container homes, park models, custom RVs, and accessory dwelling units (ADUs). Some companies provide tiny house construction insurance, and the majority will insure tiny houses that aren't built to RVIA standards or aren't NOAH certified.

Because these companies specialize in tiny houses, they have the most options and flexibility. It may take some wrangling with a representative, but you should be able to get the exact coverage you require for your tiny house.

Do I Need Insurance for My Tiny House?

If you financed your tiny house with a mortgage or another type of loan, your lender may require you to purchase insurance (the same way lenders do for traditional homes and cars). In addition, if you transport your tiny house, most states require you to have liability insurance, just like a regular RV.

Otherwise, you are not required by law to insure your tiny house. Still, a tiny house is a significant financial investment, so it makes financial sense to insure it.

How Much Does Tiny House Insurance Cost?

Tiny house insurance does not have a set cost. It is determined by a variety of factors, including:

• Your tiny home’s construction, size, value, and RVIA/NOAH status
• The value of your personal belongings
• How you intend to use the house (e.g., parked in a tiny house community or on the road 52 weeks a year)
• The coverage you require, including any optional features such as a trip endorsement
• Your claims history
• Your credit history

RV policies are typically more expensive than mobile home insurance policies because the former protects the home while it is in transit, which exposes it to far greater risk than if it were simply parked somewhere. Of course, the cost is also determined by the coverage limits and deductible you select.

The Bottom Line

Tiny house living isn't for everyone, but those who embrace it can benefit from lower living costs, the freedom to move and try out new places, a lower carbon footprint, and the ability to go off the grid. Just remember to do your homework and purchase a good insurance policy to protect your home—and your way of life—before you start living in your tiny house.