I bought land in a rural county, thinking I was safe. Six months later, Code Enforcement slapped an eviction notice on my door: “RV/Tiny Home living prohibited in this zone.” I tried to fight it in court, racking up $5,000 in lawyer fees. I called my insurance liability line. “We cover accidents,” the adjuster said. “We don’t cover you breaking zoning laws.”
Key Takeaways
- Insurance Follows the Law: Liability insurance covers negligence (accidents). It does NOT cover illegal acts. If living in a tiny home is illegal in your zone, your insurance might be voidable.
- Eviction is Not a Peril: Being kicked off your land is a financial loss, but it is not “Property Damage” or “Bodily Injury.” Therefore, standard insurance pays nothing.
- “Ordinance or Law” Coverage: This coverage typically pays for upgrades required to fix a damaged home to code. It does NOT pay for legal defense against zoning violations.
- The Loophole: If the city tries to sue you for “damages” (e.g., septic leaching), Liability might defend you. If they just want you gone, you are on your own.
The “Why” (The Trap)
The trap is “Permissible Use.”
Most insurance contracts have a clause regarding “Illegal Acts.” If you knowingly park a tiny home in a zone that prohibits it, you are intentionally violating the law.
Furthermore, if a fire happens and the fire marshal determines the structure was illegal, the insurance company can argue that the illegal nature of the dwelling contributed to the risk (e.g., unpermitted electrical hookup), and deny the fire claim entirely.
The Investigation (My Analysis of Coverage)
I looked for any policy that helps with the “Zoning War.”
Strategic Insurance
- The Insight: They are very clear: “We insure the asset against physical loss. We do not insure your right to live there.”
- The Advice: Check zoning before you buy.
LegalShield / Pre-Paid Legal
- The Alternative: This is not insurance, but a legal service subscription (~$30/month).
- The Value: They can write letters to the city or represent you in minor hearings. It’s cheaper than hiring a lawyer hourly.
[IMAGE: A red “Cease and Desist / Eviction Notice” taped to the front door of a tiny home]
Comparison Table
| Scenario | Liability Insurance | Legal Defense Fund | “Ordinance or Law” Rider |
| City Eviction Notice | $0 | Covered (Defense) | $0 |
| Fire destroys non-code house | Risk of Denial | N/A | Pays for Code Upgrades |
| Neighbor sues for nuisance | Covered (Defense) | Covered | $0 |
Step-by-Step Action Plan
- Don’t Ask, Don’t Tell (Risky): Many people fly under the radar. But if you are caught, don’t expect insurance to save you.
- Verify “Accessory Dwelling Unit” (ADU): The safest legal route is to park in a backyard where ADUs are legal. This legitimizes your insurance claim if a fire happens.
- Get a “Temporary Use Permit”: Some counties allow tiny homes if you have a permit (e.g., for “caregiver” use). Having a permit secures your insurance validity.
- Read the “Exclusions”: Search your policy for “Illegal acts” or “Violation of ordinance.” Know where you stand.
FAQ
If I am evicted, does “Loss of Use” pay for a hotel?
No. Loss of Use only kicks in if the home is damaged by a covered peril (fire/storm). It does not kick in for legal eviction.
Can the city sue my insurance company?
No. They sue you.
Is it better to be on wheels or foundation?
Insurance-wise, foundation (ADU) is safer. It falls under standard Homeowners insurance, which has stronger protections than RV/Tiny policies.