Tiny Thoughts

Tiny House Insurance

What was most foreign to me in the tiny process? If you guessed 'tiny house insurance' then you may very well be a genius. Go you! Fortunately, I met a man who explained the in's and out's very thoroughly and now I'll share that experience here.

Darrell Grenz is a full service independent insurance broker located in Portland, OR who founded his agency in 2004 and was the first to pioneer the tiny house product. His philosophy involves assessing each individual situation and catering to specific risks, rather than some blanket coverage.

Why have THOWs been difficult to insure?

A tiny house on wheels, or THOW, is hard to insure mostly because they are all so different and some so strange. Which is a really good thing, unless you are an underwriter of an insurance policy. Then it’s… well it’s not good. See, insurance is the product of trying to keep a lot of similar items divided into homogeneous categories and making an assessment of risk based on that.

Of course, the wheels pose an obvious concern. There is a possibility of theft, although it can be easily avoided and is not a common issue. More prominently, is the change in fire protection class when moved. In a situation like moving from an urban into a more rural setting, or off-grid, a normal fire may become a total loss. Wind is also a concern that must be addressed with a tiny house.

Tiny homes have not been a movement for very long. There has not been a lot of data collected yet because of this but more importantly it makes tiny homes a curious attraction. People want to check them out! This is a particularly subtle liability concern that must be addressed and includes issues like lofts and stairs without rails and skirting under the trailer, especially around the jacks.

Who are using tiny spaces?

All kinds of people choose to own a tiny home. The most common is owner occupied. Tiny homes, especially those on wheels, are great for in-laws. Of course, the best idea I know is sending a kid off to college in one. It’ll likely cost less than years of rent and you get a house out of the deal! Easy money.

A lot of people have them as an option for vacation, seasonal and retirement homes. Many are used as studios, workshops, businesses and even affordable housing. Short term rentals are booming with so many people curious to find out if tiny living is right for them. Best to spend the weekend in one to find out!

When can I get insurance?

There are Builders Risk Policies for tiny home builders, both DIY and contractors, that protect the trailer and tiny structure materials from fire, theft and most other concerns for whatever timeline you need during the build process. This lowers the initial insurance cost, as the policy is based on project value. It can be adjusted at intervals and once it’s done, easily transfer to finished policy.

There are a lot of companies out there selling tiny house shells, allowing the homeowner to finish out the interior. Customization is a huge part of the movement and so more people are wanting to do the work themselves. If choosing to start with a shell, it can be insured at a much lower cost as a shell. And again, once it’s done just transfer to a finished policy based on occupancy. Incidentally, it can also be written that the shell is the finished product and be left that way.

IMPORTANT: A DIY THOW build must be inspected and signed off on by qualified electrician for insurance purposes. Have an electrician hook up the breaker box and do this while the wires are all exposed.

A tiny house does not need RVIA certification for insurance. A tiny house doesn’t need any certification for insurance. Certifications are good for financing (RV loans), parking and resale value. An insurance policy for a THOW does not need certification.

RV loans are used to help many people finance a THOW. RV Loans require comp and collision which is on auto insurance policies. Because tiny homes are usually a homeowner’s or dwelling policy, without comp and collision, banks may not be familiar with the similarities between the two but can usually be convinced. Trip coverage is very similar to comp and collision.

Where will the tiny end up?

If you’re planning a stationary tiny house, then I have great news! A lot of times, a ground bound tiny home can be written into a typical homeowner’s policy. Even if a separate policy need to be purchased though, it’s way easier and much cheaper.

It is critical to know that car insurance will usually cover bodily injury and property damage when moving a tiny home, but you will need a separate policy to cover the tiny home. If you plan on moving it at all, ask for trip coverage on the road. Ask the agent a lot of questions in general and do not move the tiny house without insurance.

Ask the builder about their coverage. Does their insurance account for the move to final location or will this exceed the boundaries of their coverage? Many times, this is the case and the tiny home is not insured as soon as it leaves the premises. Know where the coverage starts and stops and fill in the gaps. Sometimes, with trip endorsement the builder can offer the additional move as part of the sales contract. Ask a lot of questions!

If a towing company is hired out to move the house, ensure that their Motor Truck Cargo Coverage is greater than the value of the tiny home. A lot of times, the driver won’t know the details for certain so get a copy of the certificate of insurance from the tow company.

What’s the rest of the story?

Off grid can be insured, but typically represent a higher risk. Fact of life: Higher risk, higher premium. Also, either off-grid or grid-connected solar power systems must be included in the insurance assessment.

More and more municipalities are allowing tiny homes to park in the back yard, but here an issue arises with the traditional ground bound home on the lot. Not all homeowner’s policies are comfortable with the presence of another home on the property. It can be seen as a nuisance and if seen during an inspection, can be grounds for canceling the policy.

A lot of times they don’t know the tiny has a separate policy. Other times they don’t care and you just have to find another policy. Sometimes it’s a big deal and sometimes it’s not, but just know that it’s a concern worth looking into.

So, the demand for tiny houses and insurance policies to protect them is consistent and construction quality is improving. There is now GPS technology that allows you (and the insurance company) to track the location of the tiny house at any time.

Good news for policyholders is that very few claims are made and this trend tends to keep the premiums lower. What this all means is that the underwriters are allocating more resources in this direction and every year it is easier to insure tiny homes on wheels.

If your living in or thinking of living in a tiny house, get insured. Contact an agent. They will have a third-party contractor come and inspect the tiny house, usually just the outside. Show them your electrical paperwork, you’ll install a GPS tracker so they can know what the protection class is wherever the home is placed.

How much will it cost?

A couple dollars a day. Policies range from $500/y -$1500/y but most fall in the average range of $600/y-$700/y. No question about it though, the peace of mind is priceless.

Answering the Why

As we're building the Earthwagon, many people ask us WHY we are building a tiny house. With everyone trying to navigate some type of debt, things can feel a little discouraging when it comes to home ownership. At around $250,000 (YIKES!), the median cost of home ownership in the US is staggering with wage/job growth sluggish compared to inflation. If you throw into play the desire to live a sustainable/minimal lifestyle, it may feel like you run out of options fast.

Blake and I were feeling that pressure. Add to that, all the aggravation of the ever-rising cost of apartment living and we were rattling our brains trying to figure out the next best move. We want to live a sustainable life with an ecofriendly home and plenty of fresh air. 

In all honesty, there are too many different reasons people decide to go tiny to name them all here, but I'll share here some of the main reasons people choose to downsize.

Living an Eco-Conscious Life
Did you know that over the last 40 years, the average US house size has increased in size by more than 1,000 square feet? The typical square footage is now lingering around 2,687 square feet and building a home this size takes a lot of resources.

With a tiny home, much less material is used and so you can easily incorporate reclaimed or sustainable materials into the structure. Larger homes are typically not very energy efficient, but when you build your own home you can make energy efficiency and green technology a priority.

Utilizing solar and wind power in combination with tiny living can significantly reduce your carbon footprint. Most tiny homes use composting toilets and therefore don’t generate any black water. It is also easy to reuse your gray-water and be aware of your water usage when living tiny.

Less House and More Home
When I think of all the “stuff and things” that we own, I get a little overwhelmed. One of the most exciting aspects of this project for me is that I get to sort through everything I have and keep the possessions that I find useful and meaningful, and donate the rest! Switching to life in a small space means reevaluating your lifestyle habitats and making changes accordingly.

I know letting go can be hard, but I believe acknowledging that things are really just “things” and deciphering between need and want is critical for happiness. Ever since we found out about Baby Moore, I've been thinking about this a lot more. I want Baby Moore to recognize what is really important and not be so wrapped up in material consumption like too many people are today. Our children learn by example and I know choosing this lifestyle over any other is the best way to show our tiny human that less is truly more.

Enjoy Flexibility
Many people choose the tiny life so they can be on the move. With a tiny home, you can go wherever you please and possibly even work while traveling. A lot of us aren’t exactly sure where we want to settle, but tiny house communities are popping up all around the country! You can switch it up and always have a place to park your home.

A lot of people love this aspect of tiny living, and if this is your main reason for going tiny I would suggest checking out Jenna, or "that tiny house girl’s" story at Tiny House Giant Journey. She built her own tiny and has traveled the country with it!

Experience Freedom
As I mentioned previously, home ownership is expensive. A tiny home is a lot more financially attainable, and therefore can give you much more freedom. Freedom to think about all the time you'll save not having to keep up with such a large space. Freedom to pay off your home in years instead of decades. Freedom to move about.

All in all, it means you can spend more time doing the things you love! Rather it be spending time with family and loved ones, traveling, pursing hobbies and passions, or maybe even helping others accomplish their dreams of tiny house living, you will not feel like your home is draining your time and bank account.

Customize Based on Your Wants and Needs
Many people have also asked, “Why not just get an RV?” and the answer simply comes down to longevity. For one, our tiny home is built to last (RV’s are generally not designed for full-time living). We want our home to last a lifetime and you just can’t get that type of quality out of an RV.

I really love that we can tailor the wagon to our needs and incorporate our own personal style and be creative with our home. We are building our tiny house to fit our needs and wants:

  • a place for Baby Moore to feel comfy
  • a large kitchen space a lot of counter space
  • comfortable bathroom with five-foot tub
  • a full-size refrigerator and air conditioning
  • a wood stove and propane hot water heater
  • a place for our huge California king (couldn’t give that up!)
  • storage compartments incorporated just about everywhere
  • off grid capabilities (This is a huge one for us!)

So, we designed the wagon with these things as priorities and had to sacrifice in other areas. Since we want to spend more time outdoors and plan on adding a large patio around the wagon, we decided that we could live without much indoor relaxing space.

The reasons for minimizing your footprint are numerous and will vary from person to person. I believe that there is really no clear definition for “tiny house" and have heard from pioneers of the movement such as Dee Williams and Jay Shafer that “tiny” is different for everyone! If you know what your wants and goals are, having a home of any size that helps you achieve those goals is what it is all about!

The Future of Work

Living in a tiny house usually involves spending a lot of time outside the house. This is especially so for those who work from home and finding a space to work can present challenges. A lot of people use coffee houses and other public spaces convenient to sit with a laptop, but there are a lot of situations that require a bit of space to spread out or use resources that require a more permanent setup.

Filling the need for workspace is where the concept of Coworking began. Coworking involves shared office space and expenses between many individuals, or for a more formal definition: “the use of an office or other working environment by people who are self-employed or working for different employers, typically so as to share equipment, ideas, and knowledge.”

At the Tiny House Jamboree 2017 in Arlington, I had the opportunity to listen to Justin Nygren present just how cohesive the two ideas, Tiny living and Coworking spaces, really are. His passion for building communities got him involved with intentional living communities for over 20 years. He also started an arts organization that mentors and supports artists, before he created The Grove. The Grove is a space in Dallas where small businesses, independent workers and small organizations could find the resources to thrive and grow.

This is where the worlds collide, Coworking is about community and providing resources for people transitioning into a new lifestyle and possibly nomadic living. It was at The Grove where Justin met Beth Norrgard. Beth had recently decided to shift into the tiny house life and found the connections she needed to put the finishing touches on her tiny house. Beth is now a founding member of the DFW Tiny House Enthusiasts, a group that shares knowledge and skills with everyone interested in tiny living.

The presentation was called “The Minimalist and the Future of Work” and focused on trends in society, the workforce and the evolution of space. There are many reasons that the tiny house movement is steadily growing and this is an in-depth look at some of the broader ideas that make a lot of sense.

The Evolution of Society

Over the last couple hundred years, there has been a population surge and shift from rural living to city centric type of living. As the settlements became towns and towns became cities, people have been clustering more within the urban fabric. The cities that sprang out of the industrial revolution created suburbs after the world wars, those homogenized communities that we all know and love. Now, in many cities across the country, we are seeing a growing number of residential households returning back to the urban core.

The Evolution of Work

The model of standard corporate work structures is rapidly changing. A growing percentage of the workforce is not employed at a regular job. There are more independent contractors, people who work from home and independent freelancers taking over these old jobs. Corporations, by hiring out the work, can remove themselves from the responsibility of providing benefits and taking care of employees.

For graphic design, coders, startups, developers, bloggers and countless other freelancers, finding the resources needed to navigate whatever kind of work that needs to be done, apart from these larger structures can be a challenge. Virtual Business Partners are people who have stepped out of the corporate world and help startups in the growth phase who don’t want to give up control of the company. For a retainer fee and some long-term equity in the company, a CTO (Chief Technology Officer) will be available to set milestones and help the company achieve them as well as build the teams that will replace the virtual CTO.

Virtual Business Partners

·         Fill gaps in a growth phase

·         Offer expertise, not control

·         Retainer fee and company equity

Those independent workers wanting to work with larger companies have a couple of great resources at contently.com for content development and gocatalant.com for finding larger projects that are in need of your skillsets as an independent contractor or freelancer.

The Evolution of the Dwelling and the Marketplace

We live in an increasingly shared economy, where individuals are able to borrow or rent assets owned by someone else. The Intentional Communities that are springing up with the tiny house movement allows people to be a part of tightly-knit communities, where finding emotional support or help with a build or just having the deep and meaningful relationships that help us be who we are.

There are people making intentional decisions to put themselves in careers that allow them to live anywhere they want at any time, known as Digital Nomads. This is part of a cultural shift towards mobility and right where Coworking spaces come in: Collaborative communities where shared offices, good coffee and connectedness facilitate business growth. Coworking began as a way to takes the load off of one person and split it among several people. They each cosign on a lease and split the expenses, formalizing working relationships while remaining independent businesses.

Coworking spaces as a business model provides basic office equipment and office space for a membership fee, prorated depending on how much access was needed. From basic desk space to private offices, Coworking provides members with the traditional amenities they would find in a normal business, with the freedom to run their own business and the opportunity to connect with more human resources, typically on a month to month basis.

WeWork is a large Coworking company with the motto: “Reintroducing face-to-face collaboration, inspiration, and generosity into our global network of spaces every day.” They have the largest collection of Coworking spaces in the world. WeWork spaces don’t yet consistently seem to provide as high a level of relationship building community that can be found at smaller independent spaces, but they are a global network that grants members access at locations all around the world. That is very convenient for people with mobile lifestyles.

Most recently, there is a trend now into niche spaces. In Dallas, there is a space called Weld which focuses specifically on creatives and also Dallas Maker Space which gives access to 3D printers and tools all for a monthly membership fee.

What all this means is that society is changing to facilitate more connectedness even as mobility continues to be a growing trend and traditional resources for business are becoming more readily available to the freelancer.

Tiny House Jamboree 2017

Last week, somewhere on the interweb, Melissa found all about this tiny house festival going on in Arlington the weekend before Halloween. I said “Great, let’s go!” We've been planning, designing and building ours all year and all that we've learned has generated so many more questions. She looked into it the next day let me know that there would be a lot of seminars and presentations going on that were only available to premium access ticket holders. For us to go and see all that we wanted to see was going to end up costing a few hundred dollars.

One thing to know about building a tiny house, is that you’re still building a house. Houses are expensive and we’re definitely already feeling that burden on this project, now we have another expense to consider.

Now the question, is it worth it? Everything that we can learn during the weekend must be available online, right? Either in YouTube videos or blogs and websites. Why should we spend hundreds of dollars to go hear it in person? I’ll spare you the details of our considerations and say that it was probably the best money that we’ve spent so far. Without a doubt.  

There were dozens of commercial builders and dozens of do it yourself builders with their homes set up all around the convention center, there were also over a hundred vendors of products related to tiny houses. What interested us most were the hours upon hours of great programming, a lot of which were only accessible to premium ticket holders.

There were two 4-hour seminars available that came with premium access, so I chose the one on Friday morning and Melissa went to the Sunday morning one. There's a lot of information covered in each one of those so then it was just a matter of narrowing down which of the other programs we would go to in between touring homes and talking to vendors.

We ended up listening to speakers cover:

To cover all that we learned this weekend will require many blogs posts and to say the least I’m feeling very inspired, invigorated and excited about this whole tiny house experience. Check back often for updates covering all these topics and connect with us on the link below!

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