Moving from a larger property into your very own tiny home can be a relief — and even a dream come true. You’re downsizing your stuff and simplifying your life, after all. Meanwhile, you are (probably) lowering your expenses, too.
But, even if you’re ready to settle in to your smaller home, there’s one factor to consider before you actually move into your tiny home — you have to buy insurance.
But, what type of homeowners insurance should you buy? And how much will it cost? We spoke to tiny home insurer Darrell Grenz of InsureMyTinyHome in Portland, Oregon to find out. Here’s what he said.
How much does it cost?
If a tiny home is 1/10 the cost of a traditional home, the insurance should be 1/10 the cost as well, right?
Well, not exactly.
For starters, it’s important to note there is no cut and dry formula that dictates how much you’ll pay for tiny home coverage. Grenz said his firm and others take on the risk on an individual basis, and use more than one factor to determine costs.
“There are a lot of variables that go into it, depending on where you live,” Grenz said.
At the end of the day, “the average cost of tiny home insurance is probably $600 per year,” Grenz noted, adding that pricing can still be all over the place.
What type of tiny home insurance should you buy?
Part of the reason for fluctuating costs is the fact that tiny homes are built — and used — differently. Also, you can buy several different types of coverage for your tiny home, depending on use.
If your tiny home is on wheels and you plan to move it, you’ll need an insurance policy to cover your tiny home plus a trip endorsement or separate policy when you move it, Grenz noted.
Other than that, you can buy several different types of policies to cover your tiny home. For example, you can buy an RV policy, a manufactured home policy or a custom homeowner’s policy — all of which may be perfect for your tiny home.
But you may need a different type of policy if you rent out your tiny home as an Airbnb versus if you live in it full-time as well, Grenz noted.
Overall, he says the best way to find out the best coverage for your needs is to speak with an agent who specializes in this coverage so they can give you advice based on your unique needs.
How to get tiny home insurance without overspending
If you’re hoping to save on your policy, there are several ways to make this happen. But first, it helps to understand the factors that can impact price. Grenz says four main factors usually dictate how much you’ll pay for tiny home insurance: where your home is at, whether it’s stationary, who built it and how you use it.
If your goal is saving money, it can be really smart to think through these issues as you plan out the design and intended use of your tiny home.
For example, saving is easier if you don’t plan to move your tiny home from place to place.
“If you don’t need the transit coverage, you have more options,” Grenz said. “Insuring a tiny home that doesn’t move is a lot cheaper since there’s a lot less risk involved.”
Because buying a tiny home usually means downsizing, keeping your possessions at a minimum will also help you save. Of course, it all depends on who insures you and the type of coverage limits they offer.
You can also shop around with different insurers to find the best rate, but Grenz pointed out that it’s essential to “make sure you buy tiny home insurance from a reputable firm.” You don’t want to go with an insurance agency that doesn’t truly offer the right coverage for tiny homeowners.
“Be proactive and make sure you’re buying from an agent or firm that knows how to cover tiny homes,” he said.
Don't put this off
As a last piece of advice, Grenz suggests planning ahead for this expense, if possible. Not only can planning ahead give you the best shot at finding a good deal, but it can help you avoid scrambling to get covered as you’re moving into your tiny home.
“People come to us last minute and we can’t always get them covered overnight,” Grenz said.
By planning ahead, choosing a tiny home insurer wisely and making sure you have the right type of coverage for your needs, you can ensure your new tiny home life will go off without a hitch.