More and more people are tending towards alternative living conditions, such as tiny houses and floating homes. This is awesome but it makes insuring their options a bit more arduous. Finding carriers to take on these as a risk is daunting. In this article we will take a deeper look at insuring a floating home.
A floating home does not necessarily mean houseboat although people do tend to use the terms interchangeably and they are often confused for each other. A floating home is not prepared for the ocean, but it is merely what it is described as; a house that floats primarily on a dock. The formal definition that is given is “one that is permanently moored and cannot move under its own power, unlike a houseboat”.
Insuring a Floating Home
Having purchased a floating home, you would already be aware of how incredibly difficult it is to obtain home insurance for this type of house, not to mention expensive. This is a problem that is widespread. There are few carriers that want to take on the risks associated with owning one of these homes. In fact, there are merely three carriers that are listed on the net that provide property insurance for floating homes.
- Red Shield. This carrier will provide a much broader range of coverage, however, they do so at a vastly higher premium. They offer a “Perils of the Sea” coverage which is a major endorsement protection that no other provider offers for floating homes. This basically states that Red Shield will reimburse for damages inclusive of the sinking of your home due to losses that relate to perils of the sea. This has all been written out in a one-package policy for the insureds and provides personal liability as well.
- California Fair Plan. This plan was developed specifically so that homes that were located in high-risk areas could be provided with basic home insurance. Floating homes, they claim, are not necessarily high risk but they are certainly not typical of insuring the homes that are securely locked into place on land. The traditional insurance carries don’t feel comfortable with what they consider to be a floating home’s risk factor. The FAIR plan doesn’t have agents but offers many licensed brokers that aid policyholders in obtaining one of their plans. These plans don’t include liability coverage which would need to be taken out in a separate policy with a different insurance agency. You will need to have this for most any marina that you are docked on.
- Lloyd’s of London. Lloyd’s is the newest of the carriers to offer floating home insurance. They offer personal liability with a more traditional-type of homeowners policy. They seem to be a bit vague as to what limitations and exclusions that they do and don’t cover but it is said that they have particular homes that they lean towards and they do not protect against ‘Perils of the Sea’. There is an option that may be coming available and you should check with them to see what that may be.
With each of the insurers, the structures are covered as are the contents and you are provided with liability (except with FAIR–liability is a separate purchase with a different insurer) for all perils that are typically covered under traditional standard homeowner’s insurance policies (except with FAIR, they don’t cover theft). Damage from a watercraft is only included with Red Shield. Earthquake coverage is an option for all three carriers. It is most likely possible as with any homeinsurance carrier where there are exclusions to have endorsements or riders added to your policy in order to have it custom-fit just for you.
With living on the marina, there are requirements that you need to maintain per their guidelines and having liability coverage is one of them. FAIR does not offer this in their package. This is a consideration you need to think about when you’re signing on for coverage. There may be other mandates that you need to follow as a floating homeowner in order to satisfy any rules that the marina may have. When you purchase your floating home, speak with the marina’s rental office to find out all of the rules and regulations prior to signing on with your insurance carrier so you know exactly what kind of insurance plan you’re going to need.
If you are going to rent out your floating home, it’s imperative that you let your insurance carrier know your intentions prior to your actually doing it. The floating home may not be covered as a traditional rental property or with liability in this instance. There is a possibility for coverage to be available with your provider, but you need to get it checked through your agent before taking any action or you could be left with no protection at all.
Taking on your dream home is worth all of the hassles and red tape that you need to go through so long as in the end it’s protected from any disasters that may come along.
