What do I need for my tiny house insurance in New Mexico?

Tiny house insurance in New Mexico is required for construction, towing, and parked tiny homes. Obtain RVIA certification to qualify for RV and auto insurance and receive collision, liability, and contents coverage.

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Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Sep 15, 2020

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Here's what you need to know...

  • A multitude of policies can provide your tiny home with the coverage it needs
  • Policies will be more readily available if your home is certified to need minimum safety requirements
  • New Mexico is one of the few states that has updated their laws to provide guidance on how tiny homes are appraised and taxed

Many Americans are looking for a way to live a more adventurous life on a smaller budget and many of them are turning to tiny homes. This new style of living faces new insurance challenges, however.

Tiny homes can be either semi-permanent or mobile while mixes coverage issues that apply to both homes and motor vehicles.

You will need to make sure your tiny home has coverage during construction, in transit, and once it’s parked. Make sure to compare coverage with our free quote tool above! 

Insuring a Tiny House on Wheels (THOW) in New Mexico

Insurers have been struggling to find ideal coverage options for tiny homes since the beginning of the tiny home industry.

It wasn’t difficult to get coverage for semi-permanent tiny homes used as residences, but a more mobile THOW provided coverage issues that a typical homeowner’s policy could never cover.

Over time insurance companies have developed several coverage options for your THOW.

Your first option is a tiny homeowner’s policy. This policy is ideal if you don’t intend to transport your THOW more than once or twice.

A tiny homeowner’s policy has coverage similar to a standard homeowner’s policy in that that it offers liability coverage, content coverage, and structural damage coverage. It doesn’t offer any coverage for your THOW while in transit.

Another option for your THOW that provides fairly extensive coverage is an RV policy. RV insurance policies are the same policies that cover recreational vehicles and offer the following coverages:

  • liability coverage
  • content coverage
  • structural damage coverage

This coverage also protects when you’re towing your THOW.

Insurance carriers have found creative ways to offer coverage in the past and the industries’ use of inland marine policies is no exception. Inland marine policies had previously only been used for vehicle and trailers transport tools or goods.

Recently, insurers have been offering inland marine policies for your THOW as well. These policies protect content and structural damage but don’t offer liability coverage.

Traditional auto policies are also used frequently. These policies are no different from those you use to insure your car. They don’t provide content coverage but they are a way to obtain liability coverage for your THOW.

Last but not least, if you’re looking for coverage for the contents of your tiny home a traditional renter’s policy will meet your needs. These policies don’t provide liability coverage or cover the THOW itself but do offer coverage on all the contents.

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Insurance during Construction

Everyone knows they need insurance coverage for a THOW when it’s being towed or parked and used as a residence.

But did you know it’s recommended to obtain coverage of your building materials during construction too? Your investment should be covered through every phase of construction and ownership.

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Building Your Own Tiny Home

DIY construction has been a popular part of the growth in tiny home living. Doing it yourself can cost significantly less and gives you a sense of achievement from building your own home.

Building your own THOW can lead to unique insurance coverage issues, however.

There are several steps you can take to make it easier to get your THOW insured. First, leave the electrical work to the experts.

Electrical work can be dangerous for inexperienced homebuilders. You’re also more likely to have insurers offer coverage if your electrical work is completed and certified by a licensed electrician.

Purchasing an insurance policy for your building materials is another good way to protect your investment during construction. Theft and fire damage can occur anywhere and an insurance policy is the best way to protect your investment and keep it within your budget.

The most important step in protecting your THOW is obtaining National Organization of Alternative Housing certification (NOAH).

NOAH Certification indicates your THOW complies with minimum construction and safety standards.

By complying with these standards, you put insurers at ease that they are insuring a safe, reliable THOW. That’s why NOAH certification leads to more options with insurers and can even give you access to parking locations nationwide.

Tiny Home Builders

If DIY projects aren’t for you the best bet is to hire a professional builder. A professionally built THOW will be more expensive but does come with some major advantages. First of all, it’s up to the builder to insure and protect your building materials.

They’re responsible in case anything happens during construction and will deal directly with the insurance company. The biggest advantage is the possibility of your THOW being certified by the Recreational Vehicle Industry Association (RVIA).

An RVIA certified homes will open doors with insurers that aren’t available to non-RVIA homes.

Coverage during Travel

Under New Mexico law the status of THOW changes depending on whether it is hooked up to a trailer or not. The moment your THOW is attached to a vehicle, it is treated as a trailer and not a home.

That affects you directly as your insurance policies will change. New Mexico categorizes a THOW as a vehicle which requires liability coverage under New Mexico law.

If your home is RVIA certified then obtaining comprehensive insurance coverage can be handled with a single policy.

Insurers will offer RV insurance policies to RVIA certified homes which cover liability coverage, content coverage, and structural damage.

Essentially the RV policy will cover every aspect of towing a THOW other than liability coverage for the towing vehicle. The premium rates on these policies vary depending on how you intend to use your THOW. There are two types of RV policies:

  • full-timer
  • recreation

Full-timer policies are used if you intend to live in your THOW full time. If your THOW isn’t your primary residence and is only used occasionally, then a recreation policy will be more appropriate. Full-timer policies are more expensive but provide much greater coverage.

There usually aren’t one size fits all policies for non-RVIA certified homes, however.

RV policies are not generally offered to non-RVIA certified homes, so you’ll have to bundle several policies to achieve the level of coverage an RV insurance policy offers.

First, you’ll need an auto policy to provide for liability coverage. Next, you’ll want a renter’s policy to protect the content of your THOW. Finally, an inland marine policy will cover any

Finally, an inland marine policy will cover any structural damage done to your THOW. Some auto insurance policies will also require a trip endorsement from your carrier any time you want to move your THOW.

With all of these requirements for your auto insurance, the best practice is to review three to four insurance policies before you select one. It’s the easiest way for you to balance the cost of the policies with your needs.

Coverage while Parked in New Mexico

New Mexico does not have any requirements regarding insuring a tiny home once it’s parked. Comprehensive coverage is your best option for protecting your investment. The best way to insure your tiny home is through a tiny homeowner’s policy.

These policies will provide your tiny home with liability, structural damage, and content coverage. Some carriers will require homeowners to make some concessions before issuing a policy.

For example, some policies will limit the number of times a THOW may be moved. Others may require you to make your tiny home more permanent by removing the wheels and installing a skirt.

New Mexico is one of the few states that has taken steps to fully integrate tiny houses into their laws. New Mexico law provides a process for tiny homes to pay an excise tax as a vehicle as well as be appraised as a home.

Outside of these taxation related requirements most tiny house regulations are handled by city and county ordinances.

Always check with your local municipality to determine what rules might apply to you before you park your tiny home. In some instances like Santa Fe, a lack of zoning requirements for tiny homes has made living in a THOW in the city difficult.

The zoning requirements in place have minimum square foot requirements that block tiny homes from being constructed inside city limits.

Determining your Best Coverage Options

The first step in living in your own THOW is to know exactly what you plan to use it for. It’s critical that you decide if the home will be semi-permanent or constantly moving.

You’ll want to square away if it will be your primary residence or more of a recreational vehicle. These decisions will impact what kind of coverage is available and what kind of coverage you need.

You should be upfront with your insurer even if it leads to a more expensive policy as a misunderstanding that leaves you uninsured for a major loss is a worst-case scenario.

Finally, as you consider your insurance options you should compare three to four policies the make sure you’re getting the right coverage at the right price. Don’t miss out on our free quote tool below! Just enter your zip code and start comparing rates now!

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