The tiny house: an insurance that measures up? - Lareau Blog

The tiny house: an insurance that measures up?

by Jessie Hébert-Barbeau

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« The question you must ask yourself is what type of insurance you need. »

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Although the number of children per household has considerably decreased in the past few decades, our living space has increased. Since the 80s, the average size of a single-family home is a lot larger. In Canada, that number varies between 1,900 and 2,300 square feet. Seeing as more space translates into a bigger mortgage, more and more people have started to break away from the trend by downsizing and living in tiny houses.

What is a tiny house? These small abodes typically measure fewer than 400 square feet. They come in many different forms and are used for an even bigger number of reasons.

On wheels

First of all, there are mobile tiny homes that are built on trailers and that don’t sit on a foundation. They can be moved around to suit your nomadic desires. This type of dwelling on wheels that attaches to a pick-up truck, much like a trailer or a fifth wheel, is often associated to a transient way of life. All of the owner’s belongings, contained in a little over 100 square feet, are towed. Since these types of tiny houses needed to be moved often, the owner must purchase a truck, which means that the property cost goes up. Although this option offers absolute freedom, it is not without drawbacks. Just think of the high gas prices and mechanical breakdowns that can happen along your travels.

On foundation

Some people have simply opted for a fixed model to tackle the issue that mobility poses. This type of tiny house is comparable to a traditional home: it is built on a foundation and cannot be moved. Although it is considerably smaller than a standard dwelling, it offers numerous advantages, the main one being financial savings — taxes, heating, upkeep and, most importantly, the lower cost of owning, to name but a few. This type of living is more conventional, because the house is fixed, but forces the owner to live with less and embrace simplicity.

The hybrid solution

For the undecided, you can choose another option: the transportable tiny house. Much like a mobile home built on stilts, it can be moved, although less frequently. Allowing for larger living space than a tiny house on wheels, this type of abode can also welcome a family. However, it will require specialized transportation to be towed. The owner could put down roots in another city, or even a different province, if he so desired but would have to hire the services of a company specializing in this type of move. For owners who want to avoid the monotony of a fixed home, this type of tiny house can occasionally be resettled but won’t allow for daily travel. This hybrid option is less expensive than the first two because the land on which the tiny house is located can be rented or loaned instead of being bought. And because the home is relatively fixed no gas costs are involved… Until moving day.

On top of offering a permanent way of life for some, the tiny house serves many other uses as well. It could be a temporary accommodation for a student who wishes to save on housing costs. It could also sit on the lot of a traditional home and serve as an additional room for guests. Some will even use it as a commercial space or a home office.

What about insurance?

Whatever you decide to do with your tiny house, you mustn’t forget to insure it. The question you must ask yourself is what type of insurance you need.

For starters, you must determine what purpose your house will serve. If you decide on one built on a foundation, you will need to purchase a standard home insurance. If you opt for the hybrid house, your insurance will depend on your project. However, if the mobile tiny house is the way to go for you, you’ll need to insure it as if it were a recreational vehicle. For insurance purposes, you will need to register it first. The SAAQ will want to inspect your tiny house before issuing it a VIN. Once everything is approved, you will need the inspection report and the pictures of your project to purchase insurance. Bear in mind that not all insurers will be open to offering you coverage for your project right away, hence the importance of contacting your Lareau broker who already has a solution for you.

Having sold your house or sublet your home, you now have your registration and your insurance contract in one hand and your keys in the other. You can now embark on your adventure, right? Not quite! Without a permanent address, you will also need to buy stand-alone insurance which replaces the liability portion of your standard home insurance contract.

On that note, we wish you luck with your project and bon voyage!

Auteur Lareau - Jessie Hébert-Barbeau
Jessie Hébert-Barbeau