PRODUCT: Tiny home insurance
COMPANY: Commercial Insurance Group
BEST RATING: A (Excellent)
AVAILABILITY: Coverage is available through appointed brokers on a wholesale and retail basis.
FOCUS: Imagine living in a converted school bus, canvas yurt, home on wheels, tree house, grain silo or log cabin—all smaller than 500 square feet.
Welcome to the tiny house movement.
Beginning about 10 years ago—and accelerated by the 2008 recession—the tiny house movement is all about simplicity. It’s about home prices between $20,000 and $50,000, mortgage-free living, eliminating nonessential items, embracing mobility, minimizing your carbon footprint, saving money, optimizing usable space and developing innovative solutions for daily living and storage.
The tiny house movement is so popular that numerous websites are dedicated to building, buying and decorating tiny homes, as are trendy television series like HGTV’s “Tiny House Hunters,” “Tiny House, Big Living” and “Tiny House Builders.”
But insuring a tiny home is no small feat. Due to their unique size and mobility, finding an insurance policy to cover small dwellings can be extremely challenging.
“Moving to a tiny home is not just a new movement. It’s a completely new lifestyle for many homeowners,” explains Martin Burlingame, CEO, Commercial Insurance Group (CIG). “While the number of tiny homes is growing quickly, the insurance market is not keeping pace. Buyers are having trouble finding comprehensive insurance programs to manage the unique needs of a tiny home.”
That includes square footage, remote locations, self-building problems, liability needs, mobility and heating issues. Because tiny homes don’t fit into normal standard classification within existing insurance policies, CIG now offers a program specifically targeting this unique market.
The current process is to separate the home policy with a dwelling policy form and develop an inland marine policy any time owners move their homes—which “creates complexity, duplicate coverage and problems when a homeowner moves from state to state,” Burlingame points out. “Carriers have restrictions, agents require different licensing and policy forms are not designed to handle these concerns.”
To manage this market, CIG offers a standard dwelling policy and a manuscripted movement endorsement.
UNDERWRITING: Coverage is available from $25,000 to $150,000 and includes a simple online rating tool and liability options. A trip endorsement is available for an annual fee of $150, which allows homeowners to move their home as many times as they choose.
Coverage includes the dwelling (Coverage A up to $150,000), separate structures (Coverage B up to 50% of Coverage A) and contents (Coverage C up to 50% of Coverage A).
The program can cover a tiny home up to $150,000 in value, with contents and separate structures limited to 30% of the value of the tiny home without underwriting approval. And while typical dwelling policy forms exclude theft of contents, CIG insureds can also choose to add theft coverage up to $3,000 on contents and replacement cost on contents.
The policy also broadens location definitions. “The dwelling policy forms typically refer to the declaration page for the exact location of the home,” Burlingame says. “But with tiny homes, this causes a problem—and coverage gap—if the home is not located at the location on the policy when there is a claim. Consequently, we have changed the definition of ‘location’ to where the tiny home is when there is a claim.”
In addition, many homes are parked in “complicated” locations, such as on a piece of land that belongs to someone else. This program excludes these problematic location issues.
MINIMUM PREMIUM: $250.
TARGET: The policy is specifically designed for dwellings less than 500 square feet that may or may not be transportable.
COVERAGE TERRITORY: AZ, CA, CO, ID, NC, NV, OR, TN and WA.
CONTACT: Martin Burlingame, CEO; Commercial Insurance Group, LLC, 1773 S. 8th Street, Suite 200, Colorado Springs, CO 80905; 719-476-0104.
Ronimarie Acord is an IA contributor.
