Lets end the insurance woes!

Let me begin by saying that I know NOTHING about insurance and yet I am about to rant about it. In truth I am tackling this subject despite the fear of seeming like a half-wit. It is my hope to getting some dialogue going. Maybe there are people wiser than I who have developed thoughts on this subject? I am hoping if I just put it out there to the universe… or at least to the readers of Tiny House Listings, that there will be some ideas and dare I say… solutions.

It is no secret! Tiny housers are in the cold in terms of insurance and this is clearly a bad state to be in for a lot of us. Proof of this was clear when one of our community lost her tiny home in a barn fire last year. Funds were collected but I am not sure how well this went, really. The truth is that it would be awesome if something formal were put in place to protect our modest lifestyle.

I sincerely believe that the time has come that there are enough of us, that we can do something to help ourselves. Moreover, we must do something to help ourselves.

Obviously insurance is not working for us, so the question is could we start a tiny house protection collective? Our own resource pool to help any among us who experience a total loss due to fire, flood, tornado or whatever else happens, is in my mind the solution that we seek.

For me, personally I also own a regular 900 square foot home. The value of my home and contents is about 4 times that of my tiny house. I carry insurance because I am worried about total loss. I believe that it is pointless to make a claim on insurance unless there us a devastating loss because it is not worth the spike that you will pay to your crooks… um insurance providers afterward.

In terms of my home, I pay roughly $800 for insurance a year for the house and contents. It stands to reason then that I would expect to pay $200 a year to insure THO because as it stands, it is roughly ¼ of the value.

Based on the $200 a year model I think an emergency resource pool would work. I am not speaking about a dent in the wall or other small and large damages. What I think could be covered is at least is something if there is 100% loss of your tiny house. If myself and 199 other Tiny Housers all agree that this is a fair amount of money and to invest into a devastation pool we would have 40,000. This in my estimation is enough money to rebuild 2 houses. True… 20K would not perhaps cover everything, but it would be a good start even for those who built very fancy houses. Certainly 20K, is a whole lot better than nothing, which is what many of us (including me) are now guaranteed.

If we were fortunate to have a year where there were no fires, no tornadoes and no whatever it is that can totally consume a house, then we would have a little pool wherein our resource pool would increase with the next input of funds. After a while, one can imagine that we ourselves could legalize in some way our own protection collective.

The drawbacks I can imagine are:
· The pool of coverage is, of course, fully dependent on the number of people who would be willing to put their funds forward.
· Trusting the administrator with your money

In terms of addressing the first drawback, I imagine that the worst thing that could happen is to be a singular member. If this happened based on the model put forward, you would invest $200 and if you had a total loss you would only get $100 back… but since I would also be interested in doing this, the moment that there is one other person to is interested I would also invest, so this would mean that you would get your $200 back. In the second year, you may wish to continue or not, if you do then you would be insured for $400 and so on… even with myself and one other person year after year our protection would grow, however it would only increase by the amount of your own investment. However, even with as few as five people who are willing to move forward, after five years (with no claims), the coverage would grow to $5000!

In terms of the second drawback, clearly, I could write here for hours about the qualifications and honesty, of (submit x administrator here) but I have the sense to realize that it does not matter what I put forward. The truth is, that trusting a stranger with your money requires a leap of faith.

With this said, it would be best, if this was taken on by a group of people who live in a community which has at least 10 tiny housers who would be interested in managing a project like this. With ten, investors there is already enough interest to make it worth while, am I right? Plus, requiring more than one signature on any outgoing money is a good way to protect us from being absconded of our funds.

What I am saying is that this article is a poll of sorts for the tiny house community. Question one: Would you be willing to pay $200 outright to have a tiny house protection collective?
Do you have a group of tiny housers who live close by who would be interested in managing a collective that would protect other tiny housers?
Please write to me at lauramoreland@tricolour.queensu.ca answer both questions and please include your name. If there are a few on board we may just have a true tiny house solution after all! One outside of the mcBox of course!

This plan might not be perfect, but in my mind the worst thing that could happen is to have no plan at all.

Laura Moreland is a contributing writer for Tiny House Listings.  She lives in a tiny woodland cottage near Kingston Ontario with a pack of dwarf dogs.  Her woodsman ensures that she never accept apples from old ladies.  You can learn more about Laura through her website “Tiny House Ontario” here.

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