Tiny homes have become the latest fad on the housing scene. Those frustrated by an expensive housing market or who have a desire to live a frugal, minimal or environmentally friendly lifestyle are opting to purchase tiny homes. Some are placed on flatbed trailers to enable a more transitory lifestyle while others are placed on private property in the city or in the countryside – and there are even communities popping up composed entirely of tiny houses!
These homes initially fell through the cracks of home insurance especially those on wheels. They were significantly different from regular homes and many were custom built. Slowly the insurance industry is rolling out tiny home insurance although many types are not covered yet.
What is a tiny home?
A tiny home is a residential building under 500 square feet or 47 square metres. While tiny homes can be mounted on wheels or installed permanently, currently only the latter is covered by home insurance policies. That means your tiny home must be permanently parked and skirted to be eligible for insurance.
Can any tiny home be insured?
No. Unfortunately, this is too new of a phenomenon and insurance companies are still catching up. Currently, your tiny home must be factory-built and not homemade in order for it to be insured. It must adhere to the Canadian Standards Association (CSA) Z240 certification or a similar standard. Your tiny home must also be located on a permanent foundation (no wheels and not moveable).
What is available for tiny home insurance?
A tiny home is considered to be the same as a manufactured home. Coverage is similar to regular home insurance and includes:
- Property coverage – Helps cover replacing your personal belongings and home if they’re damaged by an insured peril.
- Additional living expenses – Helps cover additional expenses if you’re forced from your home due to an evacuation order or claim for an insured peril.
- Personal liability – Helps cover expenses if someone is hurt or has their property damaged due to your unintentional actions.
Included in your property coverage is your home, furniture, clothing, appliances, deck, garage, other outbuildings, and the rest of your personal belongings. Make sure you have enough coverage to replace your belongings and reflects the replacement cost of your home.
If you run a business from your tiny home you may need a home-based business endorsement or a separate commercial insurance policy. If you rent out your tiny home, you may also require a special endorsement or policy. Some insurers are offering home-sharing coverage as an add-on for their policies.
There are also other optional coverages that extend your policy or are designed to adequately protect your property. This includes sewer backup coverage, overland water coverage, service line coverage, floaters, and more. Talk to your broker for a full list of additional coverage.
How much does tiny home insurance cost?
The cost for insuring a tiny home will depend on a number of factors:
- Your insurance history
- Your demographics
- Your credit rating
- The square footage of your home
- The building material of your home
- Your home’s roof type and age
- Your home’s electrical, heating and plumbing systems
- If your home is close to risks like a river or you have a pool or trampoline on the property
- How close the nearest fire hydrant and fire station are
- If you have damage mitigation or prevention devices
- The claim rate and crime rate of your neighbourhood
- Your insurance options
If you’re considering buying a tiny home or already have one, talk to your broker about your insurance options.