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A smaller-than-average home not only puts off some mortgage lenders, but also some home insurers. We have in the past had renters and car insurance with Allstate Canada, but when we contacted them for homeowners insurance, they told us that they didn’t insure houses under 800 square feet. (As with some mortgage lenders, the basement doesn’t count; had we 700 square feet at ground level and 100 below, we still wouldn’t be eligible.) We are baffled by this and wonder how a small house can be too big a risk to cover. On the one hand, were our tiny house to catch fire, it could be argued that it would burn to the ground sooner and therefore cost the insurance company more to restore. On the other, being small puts it at a lower risk than the larger, taller houses around us of being struck by lightning, meteorites, or other fiery phenomena and therefore of igniting in the first place…

We eventually found a number of companies who would cover our tiny house, and chose State Farm Canada. Unlike Allstate, they took the trouble to send one of their agents to look at the house before quoting. With respect to his competitor’s decision, the State Farm agent could only suggest that if our house did burn down, it would be extremely difficult to rebuild because of the narrowness of the lot. That, of course, has to do with lot size, not house size. We suspect our house just wasn’t big enough business for Allstate, who couldn’t explain their decision. Given that we also drive a very small car, we’ll be taking that little bit of business to a competitor too.

© 2014 Penelope Radley and Tiny House Toronto. All rights reserved.

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