What to Know About Tiny Home Underwriting

One insurer willing to tackle the tiny home market is Foremost Insurance Co., a division of Farmers.

Lauri Atkinson, head of Specialty Product Development and Recreational Casualty for Farmers Specialty, said Foremost has been dabbling in tiny homes for a few years but right now will only write those that are professional built and certified by either Recreational Vehicle Industry Association (RVIA) or National Organization of Alternative Housing (NOAH).

From an underwriting perspective, owner usage is an important issue, she said. “It must be owner occupied as opposed to being used in some type of commercial way such as an Airbnb.”

Underwriters also are concerned about location including coastal restrictions and whether there are features like wood stoves or fireplaces.

The trailers that tiny homes sit upon are also a big concern in underwriting. “We want to make certain the trailer that it’s on has a weight rating and make sure the axles are strong enough to support the structure,” Atkinson said.

Foremost underwrites tiny homes through its recreational casualty underwriting group so requirements are similar to how the company treats travel trailers, she added.

Atkinson also recommends that agents make their customers aware of unique exposures for tiny homes such as theft. “Make certain that you have coverage for theft of the entire home. These are tiny and they can get carted away and be stolen,” she said.

She also said tiny homes could be a target for vandals given their unique presence. “Make sure it’s covered for vandalism,” she said.

Just like an automobile, location may change the rate. “Remember if you move the tiny home it may be re-rated.”

The final thing piece of advice, Atkinson said, call for help. “Most agents probably aren’t going to run across a lot of these (tiny homes) so call our underwriting department to walk through the process of how to handle it.”