Most Americans are feeling the heat of rising housing market prices, and experts predict a 10% rise this year. With such statistics, owning a big home may not be feasible for most people at this time. For these reasons, some have opted for tiny home ownership.

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Studies suggest a slight spike in the median listing for tiny homes. Besides that, the sensational 2019 Netflix show "Tiny House Nation" has increased interest in small house ownership among Americans. 

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With that in mind, it's vital to know that minimal homes have similar demands in terms of care, protection, and insurance, just like standard homes. 

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In this discussion, we walk you through a comprehensive guide on affordable insurance for your tiny house. Read on to learn more.

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What's A Tiny House?

According to the 2018 International Residential Code, a tiny house is a dwelling of at least 400 sq. ft without including the loft. Whereas some owners may use these dwellings as permanent residences, others use them as vacation homes.

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Does a Tiny House Need Insurance?

Tiny homes require insurance coverage just like regular homes. Whether you have a small mobile home, a stationary dwelling, a DIY small house, vacation abounds, or rental property, you need insurance coverage tailored to meet your needs.

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What To Consider When Taking Out Insurance For Your Tiny House

When taking out your insurance, you need to consider the location of the house. For example, if your house is located near the sea, you should consider taking out natural disaster insurance coverage such as flood or hurricane insurance. RV insurance is good for you if your home is constantly moving or on a wheel.

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Depending on your budget, the amount of coverage or risk you're comfortable taking is an important aspect to consider. Worth noting that there are different types of insurance coverages for tiny homes, and these include;

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• Mobile home insurance covers your tiny home if it's stationary or built on a fixed or permanent foundation.

• RV insurance covers a small home built on a movable trailer.

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Mobile homes or tiny stationary houses built on permanent foundations require insurance. Like regular home insurance policies, the plans cover the dwelling, personal belongings, and liability. 

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With a tiny home's insurance coverage, the protection extends to perils such as natural disasters, lightning, hail storms, falling objects, medical payments, explosions, and fire damage.

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You can also get protection when the house is under construction which may cover supplies, equipment on site, or during transport and building materials. 

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Besides, you can get endorsements to bump up your existing coverage and get customized options. Some of the add-ons or riders include;

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• Trip collision coverage
• Hidden water damage coverage
• Other structures coverage
• Matching siding coverage.

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If your tiny home is for rental purposes, you can get landlord insurance for your tenants. For tiny holiday houses in a travel trailer, you can get insurance coverage that encompasses emergency expense coverage, replacement of lost personal items, and collision coverage. 

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When shopping, consider bundling all your insurance coverages such as auto, home, health, and landlord, and enjoy discounts. Additionally, we recommended contacting your insurance agent for more information requiring certification of tiny homes before purchasing a home.

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Challenges of Insuring Tiny Homes or Homes on Wheels

Not all tiny houses can be insured. Deciding on the best insurance for your home on the wheels can be overwhelming for most people. 

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Essentially, all types of houses must comply with zoning and building codes in specific regions, which determines whether the dwelling qualifies for insurance. 

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Unlike traditional homes, whose rules are clear, tiny houses must contain certain unique characteristics in terms of size and mobility to be eligible for normal homeowners insurance. Unfortunately, most are unable to meet these conditions and therefore remain uninsured. 

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But, some insurance companies cover tiny homes on wheels if the owner makes adjustments like having a permanent or semi-permanent structure. But the policy may exclude towing, which is a liability risk for homes on wheels.

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RV insurance is a good option if you want to travel with your movable house, but there's a catch. Some insurance carriers will require certifications by RV builders. 

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Two organizations certify tiny homes in the US; these are;

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• The National Organization of Alternative Housing (NOA) for tiny stationary homes

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• Recreational Vehicle Industry Association (PVI) for tiny mobile homes. 

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Another challenge with tiny house insurance is that most insurers consider homes built by contractors or professionals. 

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How Much Will Your Tiny Home Insurance Cost?

The insurance cost will vary depending on a few factors;

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• The type of construction 
• Size of the house
• Value of the house
• Your credit history
• Claims history

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How To Reduce Costs on Your Tiny Home Insurance Policy

Like regular homeowners insurance coverage, you can reduce your tiny house insurance through the following initiatives;

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• Installation of burglar-proof doors or locks to protect your belongings.
• Installation of smoke detectors.
• Have hurricane or storm shutters if you live near the sea.
• Raising your deductible can reduce your monthly premiums.
• Bundling your insurance policies.
• Building your credit score.

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If you have several insurance policies such as auto, health, and homeowners coverages, you can consider lowering the cost of other policies to reduce your overall burden. For instance, maintaining a clean driving record with few or no collisions or tickets for auto insurance can lower your monthly premiums. Also, most auto insurance companies encourage that you may be able to lower your rates by taking defensive or safe driving courses and then providing proof of completion to your insurance company. The more recently these courses were taken, the better.

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For health insurance, you can seek subsidies to help you lower your monthly premium depending on federal poverty guidelines. Subsidies can also lower your copay or coinsurance.

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Under this program, you can qualify depending on the metal tiers, bronze, silver, gold, and platinum. If your income status is substantially low, you can locate in-person assistance in your state or use the local help finder on the HealthCare.gov website.

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Conclusion

From the discussion, it's evident that tiny homes require insurance to get protection against risks. Whether it's a movable structure or built on a foundation, you can shop around to get favorable rates. Also, before building a tiny house, look for building regulations in your state. Lastly, some insurance carriers have specific policies for tiny houses, so we recommend discussing the terms with the agents before taking them out.

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