Does Homeowners Insurance Cover Tiny Homes?

Tiny houses are gaining popularity across the United States—after all, these are inexpensive, energy-efficient, and low-maintenance dwellings. Additionally, they promote a simpler way of life by eliminating clutter and unnecessary possessions.

Even though tiny houses are small, they can cost tens—or even hundreds—of thousands of dollars, so it's a smart idea to secure your investment with comprehensive insurance coverage. Here's all you need to know about tiny home insurance.

What Is the Definition of a Tiny House?

A tiny house is precisely that: a very little residence. While there are no legal size restrictions, small houses often range from 100 to 400 square feet. By comparison, the typical size of newly constructed single-family homes in the United States was 2,333 square feet in 2020.

Tiny dwellings can be on wheels (and hence mobile), or they might be immovable. In conjunction with how you utilize your home, this distinction dictates the sort of insurance you require.

Is Insurance Required for My Tiny House?

If you financed your tiny house with a mortgage or another type of loan, your lender might require you to get insurance (the same way lenders do for traditional homes and cars). Additionally, if you travel your tiny home, most states require you to obtain liability insurance—just as you would with a standard RV.

Otherwise, you are not required by law to insure your tiny house. Nonetheless, a tiny house is a significant investment, and it makes financial sense to safeguard it with comprehensive insurance coverage.

Insurance for RVs and Tiny Houses

You wouldn't specifically need homeowners insurance. However, RV insurance may be the best option if your tiny house is on wheels and you intend to move it regularly, as it covers your home both while it is parked and while it is being transported. Since RV insurance is meant for travelers, it includes protections that other types of insurance do not, most notably collision coverage. To be eligible for RV insurance, the small house must adhere to the Recreational Vehicle Industry Association's guidelines (RVIA).

Typically, basic RV policies contain the following types of coverage:

• Collision—This coverage kicks in if your tiny house sustains damage due to an accident with another object or vehicle, regardless of who is at fault.
• Comprehensive—Also known as "other than collision," this coverage extends to occurrences beyond your control, such as theft, vandalism, fire, falling objects, weather-related incidents, and animal collisions.
• Liability—It assists in compensating for property damage and injuries caused by you.
• Uninsured/underinsured motorist coverage protects you if your tiny home is struck by someone who does not have insurance or has insufficient coverage. It assists with the cost of repairs to your tiny home, personal injuries, and lost wages if you cannot work.
• Personal property—As the name implies, this policy protects you against your personal property's loss, damage, or destruction.
• Medical payment—This contributes to the cost of medical care for you and your passengers if your tiny house is involved in an accident.

If you plan to live in your tiny house full-time, purchase a "full-timer's" policy.

Not all insurance providers offer the same range of coverage options, so double-check that your policy includes the coverage you require. If not, supplement the coverage with endorsements or a separate policy. For instance, if your policy excludes personal responsibility, you could get a low-cost renter's insurance coverage covering personal property and personal liability.

Tiny House Policies for Mobile Homes

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

A comprehensive mobile home insurance coverage works similarly to normal homeowners insurance in that it protects the home, its contents, and liability claims. Unlike RV insurance, however, mobile home insurance does not cover the home or its contents while being transported.

You'll need a transit endorsement for that. The policy must be in effect before transporting your tiny house, which means you must notify your insurance company in advance of your move to allow for policy updates.

A named-peril policy is another choice for mobile home insurance. These are relatively affordable plans that cover only the specified causes of loss. If your small house is damaged by a risk not covered by the policy, you will be responsible for any repairs. Thus, while a named-peril policy may save you money, the extra risks may not be worth it.