Relaxshax's Blog


Finding Insurance for your off-grid cabin/tiny home- Possible? Necessary?
January 5, 2011, 11:18 am
Filed under: Uncategorized

OOPS! A mega-cool photo of a cabin in Iceland was at the top of this blog for about 3 minutes- then buried below (next most recent thread)- be sure to check it out!)

ALSO- Note: There’s alot of text here, but I included it all so as to avoid any redundancy in advice or answers, should any one choose to pitch in….

Lawn Cameron (from the tri-state area), who is the owner of a gorgeous new cabin we’ve featured on this blog, and I have been emailing a little back and forth in regards to a cabin-insuring problem she is now facing. Its yet another hurdle, as I’ve mentioned, for tiny house owners- and a frustrating one. Well, after us tossing some ideas/problems back and forth, I told her that we should just post our entire email thread on my blog to see if we can enlist any help or expertise in this area. Perhaps, hopefully, some other blogs might even jump in to help, as the more-the-merrier, when searching for hard answers…

So here’s the thread…

————

Deek, Hey its Lawn….

     I’m wondering if you know of anyone who’s been helpful in terms of homeowners insurance?  The only quotes I’ve been given so far are $960 and $1100 annually.  (Like, seriously..?!  wtf??)  I’m wanting to refinance with a bank as I’m hoping to return to school in the fall, but banks require homeowners insurance and no one offering homeowners insurance wants to take on my case because I a) don’t have electricity, and b) don’t have a thermostatically controlled central heating element.
 
Sigh.  Why is it SOOO difficult to want to do something eco and small and simple…?!  I feel I’ve run into these problems time and time again because our culture/country is not set up to support it.  So. Frustrating.
 
Anyway…if you could offer up any advice or assistance, I’ll gladly take it!
Thanks, and Happy New Year~
Lawn

——-

On Mon, Jan 3, 2011 at 5:32 PM, Derek Diedricksen wrote:

Hey Lawn….
  yeah- lotsa hurdles…..I really don’t know anyone- but does your structure fall under a blanket policy if it resides on the land of another main home? Or do you just not get it- which comes with its own risks….
  Unfortunately, they have you over a barrel in many of these situations- and its why “the rich get richer” and why housing and zoning is largely controlled by banking in many respects.
  Sorry to hear it!
  -Deek

——–

Yeah, the structure’s the first one on the property, and my first home, so I don’t have anything that I can place it under, which is another bummer :(  I’m determined to figure this out…somehow!
 
Best,
Lawn

 —–

Lawn,

Can you label it a “Shed” through some loophole- or a hunting camp/art studio/shack? Now, you say they require thermostatically controlled heat (JUST to insure you) or to be able to drop the rates? Make sure you call around for several rates too…can even a small solar set-up be considered electricity? Heat-wise, check out the Japanese Toyotomi’s- I’ve worked with one for awhile, and have installed them- they’re amongst THE most efficient heaters on the market- and run on #2 kerosene (which you’ll find up north no prob)- or low-sulphur diesel.
 
Can I blog on this at some point even? Maybe we can find someone who can help…
 
-Deek

——-

Deek~
 
TOTALLY a blogworthy topic!  If I had my own, I’d definitely be using it to vent right now.  I CAN get insurance for it as a seasonal camp/building, however, seasonal does not cover my valuables, nor theft, nor natural disasters.  In fact, it’s basically a fire policy.  A fire policy is great, and I may have to settle for it (if the bank will allow me to refinance with JUST that insurance in place–waiting to hear back), but I really do want theft and natural disaster for coverage, too, since my work is currently a distance away and my valuables and personal property are all at the house.  This would be so much easier if I had other insurance for something in the works…
 
For everybody I’ve called, not having electricity (and some will consider solar; most will not unless it’s grid-tied) AND not having a thermostatically controlled central heating system is a problem for most insurance companies & their underwriters.  This is bass ackwards.  Take a look at ice storms; the people who had frozen pipes are the ones who did NOT have woodstoves and their insurance companies had to unload to cover the cost of frozen pipes due to electrically-based heating systems.  I have one p-trap & pvc pipe exiting the residence as part of an approved primitive graywater design (which leads to graywater infiltrator basins).  All I do is empty the P-trap when I leave; the house freezes all the time during the week.  It’s never a problem.  So for me, adding central heating means only adding to my fire risk.  Even if I had it, I wouldn’t pay to use it because I’m too cheap…aka frugal😉
 
So far, I started high with the larger insurance companies and agencies that have a wider reach (Allstate, Liberty Mutual, State Farm, Johnson Agency, Clarke Insurance, etc).  Most of them look to Lloyds of London, which has huge premiums and outrageous annual rates.  The ones that don’t reach out won’t offer me anything.  I did recently post to facebook and got some leads to people from larger companies who have done the research in the past for off-grid homes and have led me several different directions.  I may have a light at the end of the tunnel with a small insurance company nearby, and potentially a mom & pop insurance operation across the state.  Sounds like small is the way to go, but I have to actually acquire any yays or nays or numbers to know if that advice is actually sound and/or substantiated…we’ll see.  Sigh. 
 
My goal is to have an answer by the end of the week.  I’m thrilled to share any info I obtain out of this whole process; from my online research, there certainly are a fair amount of folks out there who are struggling with comparable issues.  I’m all about networking.
 
Lawn

—-

SO, THERE YOU GO- and ANY HELP/ADVICE IN THE COMMENT SECTIONS WOULD BE APPRECIATED!

-Derek “Deek” Diedricksen


15 Comments so far
Leave a comment

I also had trouble finding reasonable insurance. Woodstoves were not allowed in by insurance in my area, I could have gotten propane. Even a small propane heater has a thermostat so that’s not a problem but the cost of the policy was. It was almost $1200 a year I think. I wish I would have gotten it since everything was stolen the in November then again in December. Not much to insure now besides the structure.

Comment by Solar Burrito

thanks for the input…

Hey Burrito, you ever get my comment/email about your cabin- photo, etc….hit me back when you have a chance

Comment by Deek

Solar Burrito–mega bummer. I feel like a break-in is pretty much inevitable, given my ‘out there’ location and somewhat proximal smatterings of homes in the town, and my inability to be there on a regular basis due to my current job situation. Thing is, in 5 years time at that rate, I will have paid for all of my belongings and valuables–again. This is such an unfortunate circumstance, and one that should be embraced–if anything. I’ll let you know if I hear anything…

Comment by Lawn Cameron

You are refinancing ???, how did you get the financing or insurance for it in the first place ???. Perhaps you could refinance it into a construction loan.
or put it up on pontoons or ballels, and call it a houseboat, they also have layup and construction loans and insurance available.

Comment by Pat Mahoney

I financed the sale of the property through my seller; I’ve been paying out of pocket for the construction of the house. Now that it’s built, the bank will only allow me to refinance if I have homeowners insurance in place.

Pontoons would be pretty slick, but not an affordable option at present.😦 I can’t get a construction loan on the house since construction loans with the bank require electricity and–guess what?–a central heating system (and that cannot be a woodstove).

Comment by Lawn Cameron

We just had this issue with our small house in the country(we have a small house on 5.25 acres in another county my son is living in). We recently got dropped on that house, suddenly, by the same Co. we had used for 15 or more years. They said it was due to no central heat. (We have a pellet stove and other heat sources like a wood stove). I called an insurer whose office is actually IN the rural area our second home is in, and they promptly agreed to insure it. Check around, find out who insures farmers, ask people who own boats, etc.but I think a big part is going local with someone used to rural buildings, etc. Best of luck!

Comment by Becky

Another thought is to try to get renters insurance just on contents and insure them heavily, to full replacement value at least, it would be something…check with professional org’s, fraternal ones, etc. a tie in might help you also to find insurance.

Comment by Becky

I guess there is a little bit of info missing in the thread… Is the ultimate goal only to refinance the property or do you really want some kind of homeowners insurance also? If the goal is just to refinance, then maybe you just treat it like a land loan – 20% equity will do the trick. As Pat in the above note mentions, a construction loan is also a good idea. I have a construction loan on my place in New Hampshire (since 2004!) and it has worked out great. I think after five years I was supposed to have a building with a certificate of occupancy, but since I dutifully pay my mortgage, the bank has never requested one.
A construction loan allows you to finance with less equity, a land loan will require more equity. Lastly (and this will be controversial…) all adjustable rate mortgages are not bad – the devil is in the details and it is possible to find an ARM with very favorable conditions – ARMs are common in construction loans. good luck and nice cabin!

Comment by Rod

Good point Rod- thanks for filling in some of the blanks…

Another question for Lawn- I’m not sure what it COST to build this place- but with the math, and money involved to insure- do you just NOT insure it- and take your chances? Again- I’m not verses in these matters. But, say, after ten years, something happens- that’d be ten years of NOT paying $1200.00 a year, or $12,000.00. Of course you have to worry about liability in this day and age, as anyone who gets a splinter in your home might want to take you for a ride. lol.

-Deek

Comment by Deek

Thanks everyone for your feedback! I’m still making phone calls and sending emails…

NOT having insurance would be nice–period. The goal is to refinance, however, which makes insurance a necessity.

Comment by Lawn Cameron

check with Geico and Progressive, they might possibly have ins. for a cabin too. My father put in some ‘security measures’ that were passive that might help you get better rates on our family cabin in the country. He put heavy wooden shutters that bolted on the inside to keep people from being able to easily force the windows. The doors were made out of very heavy wood, with double deadbolts, and the more vulnerable one had a wooden fall bolt. (2 by 4 almost size that fitted across holders on one door, not sure how else to describe it)Nothing valuable was left there, just in case.

Comment by Becky

Yeah, I’ve called them. So far, I’ve found one guy from Allstate who very much appreciates my cause and loves the concept. His best resource is a surplus lines (non-standard) insurance providing company that generally offers rates around $700 for the year… Then, he said another option is to take whatever offer that ins co comes back with now, but as a “work in progress” coverage, and then I could install this:

http://www.catfishsupply.net/ProductInfo.aspx?id=6547319

…which would take up wall space and cost another $100 to install, but would afford me a huge savings. Once it’s installed, I can change to a different policy that would bring my rate down to $170.

I think it may be my golden ticket option.

Comment by Lawn Cameron

I’d say it’s a golden ticket, huge savings…go for it;)We have used a wall gas heater and it will make your place toasty! You can go through the wall and place the tank outside for safety. We cheated and just had it inside…which wouldn’t pass insurance muster due to flammability. You can always disconnect and put the tank inside when you left if it’s outside, or build a lockable wooden surround with a door. Best to you!

Comment by Becky

Behold! An answer!! After fudging around with insurance companies for the past week, I found someone at Allstate who said there’s such a thing as a ‘construction in process’ policy. This news, combined with this oneofakind humdinger, the SR-10T:

(which, ps, is non-electric, propane fueled, can be attached to any size propane tank, AND has a thermostat) means that I will likely receive a quote by the end of the day in the $200/yr range, with only a $40-$50 difference between the construction in progress and standard dwelling (full coverage) policies. Once the heating system has been installed (~$350 for the unit and installation/tie in to my current setup for the cooktop), I show proof of occupancy (which is a letter from the town–I received this last summer), and since this was built within the last ten years, no inspection is required, and then I will be given the cheaper, standard dwelling policy.

Wow. That was so….much…..work. However, this also means that I can proceed with refinancing and just use of the ‘cash out’ money to install the system much sooner rather than later.

Thanks everyone!

Comment by Lawn Cameron

So glad you have an avenue/answer now- send us any updates when you get ’em. Thanks!
-Deek

Comment by Deek




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