I rented a spot in a nice lady’s backyard for my tiny home. $500/month. One day, my UPS driver tripped over my extension cord running across her lawn and broke his ankle. He sued her (the landowner) because it happened on her property. Her insurance company denied the claim and cancelled her policy because she was “running an undisclosed rental business.” She evicted me the next day.
Key Takeaways
- Business Activity Exclusion: Standard homeowners policies exclude “business pursuits.” Renting land to a tiny homer is a business. Without a specific endorsement, the homeowner has zero liability coverage.
- “Permitted Occupant”: The landowner needs to add the tiny home renter as a “Permitted Occupant” or buy a Landlord Policy (DP-3) that covers the land rental.
- The Renter’s Liability: The tiny homer needs their own liability policy (CPL) listing the landowner as an “Additional Insured.” This protects the landowner if the renter is at fault.
- The Eviction Risk: If the landowner gets scared by their insurance agent, you lose your parking spot. It happens constantly.
The “Why” (The Trap)
The trap is “Undisclosed Risk.”
Homeowners take cash under the table and don’t tell their insurer. But when a claim happens (dog bite, slip and fall, fire), the adjuster investigates. They see a second dwelling unit in the yard.
“Is this a relative?”
“No, a renter.”
“Claim denied. Policy cancelled.”
The Investigation (My Analysis of Solutions)
How to do it legally so nobody loses their house.
For the Landowner
- Action: Call insurer. Ask: “I am letting a friend park their RV in my driveway for a fee. Do I need a ‘Unit Rented to Others’ endorsement?”
- Cost: Usually +
50−50−100/year. - Alternative: If the carrier says no, switch to a carrier that allows ADUs/rentals.
For the Tiny Homer
- Action: Buy a “Tiny Home Liability” policy (CPL).
- Critical Step: Add the Landlord’s name as “Additional Interest” or “Additional Insured.”
- Result: If your dog bites someone, your insurance defends the Landlord. This gives them peace of mind.
[IMAGE: Diagram showing “Primary Liability” (Tiny Homer) defending “Additional Insured” (Landowner) in a lawsuit]
Comparison Table
| Scenario | Standard Homeowners | With “Rental” Endorsement | Tiny Homer’s Liability |
| Renter pays rent | Excluded (Business) | Covered | N/A |
| Guest trips on cord | Denied | Covered | Covered (if your cord) |
| Renter’s house burns down | Not Covered | Not Covered | Covered (their policy) |
Step-by-Step Action Plan
- Have “The Talk”: Before moving in, ask the host: “Does your insurance know I’m here?” If they say “Shhh,” you are at risk of sudden eviction.
- Draft a Lease: Even for a backyard, have a simple lease. It establishes you as a tenant, which gives you some legal rights (though zoning might override this).
- Provide Proof of Insurance: Hand your host a certificate of insurance showing $300,000 in liability with them listed on it. It makes you look professional and safe.
- Keep it Tidy: Most neighbor complaints (which trigger code enforcement) are about mess. Keep the site clean to avoid inspections.
FAQ
Does the landlord’s insurance cover my tiny home?
No. Never. They insure their house and land. You insure your structure.
What if I pay in labor (gardening) instead of cash?
It’s still an exchange of value. Liability is still a risk. Get it in writing.
Can I get Renters Insurance?
Standard Renters Insurance covers your stuff (contents), not the tiny home structure. You need a Tiny Home policy.