In this three-part series, Inman News examines floating homes, the lifestyle, the structures themselves, what’s different and what’s the same about living in these peculiar dwellings. The unique lifestyle aboard water-bound homes has been glamorized in Hollywood films and also stigmatized as radical and non-conformist. Today, floating-home communities have emerged as luxurious retreats from crowded cities and bland subdivisions while maintaining a tight-knit, bohemian crew of residents. (See Part 1: Waterfront real estate to the extreme and Part 2: The art of the floating home sale.)

They sink, they tip over, they float into the next state – and that’s just the beginning. Insuring conventional homes is tricky, but that’s nothing compared to floating homes, according to an insurance industry professional.

Asked what is the biggest drawback of insuring floating homes, Chris Jones, division manager of Portland, Ore.-based Red Shield Insurance Co., had a two-word answer: “They sink.”

Elaborating, he said,  “The main concern is stability. Do they get too much weight in them, do they tip over, do they get a leak that fills them up with water, are there storms or surges that would cause them to run aground, damaging the hull?”

Sounds like a boatload of headaches for any company that insures the homes, which Red Shield has been doing since 1986. The company currently insures about 2,000 such homes in Oregon, Washington, northern California and Idaho.

Though floating homes undergo a much different insurance and financing process, owners say they enjoy the unique lifestyle of living on water. Worries about tipping over or sinking to the bottom of the river aren’t enough to keep these people at bay.

Insuring unconventional entities is nothing new for Red Shield, which covers Christmas tree lots, forest fire fighters and ice cream parlors, among others.

Despite the added risks of insuring floating homes, the company has been successful doing so. According to Jones, his company is probably the largest underwriter of floating homes on the West Coast.

The company began insuring floating homes when a new manager came on board in 1986, bringing his portfolio of floating home products with him, Jones said.

The most unique exposure, or risk, for a floating home is probably having it live up to its name a bit too thoroughly and drift off into another location, according to Jones.

“A number of years back after a storm, one of our homes totally disappeared. With a conventional home, if it’s destroyed in a storm, at least you can see the remnants. But this one was gone,” Jones said.

It turned out that the home, originally in Oregon, had floated over the state line into Washington, he said.

Floating homes are at risk for all the disasters that can affect conventional homes, such as storm damage, flooding and fires, but some elements of floating homes can worsen the risk, Jones said.

“The issue with fire is that these (structures) are all built very close together,” Jones said. “With a standard home, you might have on the low side 10 feet between houses, and lots of houses have 30 feet between them. With floating homes, there might be as little as 4 feet between two structures. Hence, if one catches on fire, it’s more likely its neighbor will do so, Jones said.

“Unfortunately, when the home burns to the water line, you’re left with salvage of what was there and potential pollution problems,” the division manager said.

“There are not many people who do this type of insurance,” said Jones. Considering the small number of such properties and the large number of things that can go wrong, this is not too surprising. “Others have tried it and gotten out of it. We seem to have stuck with it.”

Though he wouldn’t give specifics, Jones said the fee schedule is “slightly higher” for floating homes than for conventional homes. A lot of the cost depends on the value of the home and its location. “Like anything else, there’s differences,” Jones said. “Suffice it to say that this insurance is more expensive than traditional homeowner’s insurance.”

Because floating home communities are so close-knit, Jones said, there’s no need for his company to advertise. Owners of floating homes learn about the services through word of mouth.

Despite all the things that can go wrong, owning a floating home is a joy for most people, Jones said. “The people who live in these homes like the camaraderie and the close-knit community that develops. Beyond insurance and its cost, people who live in these communities very much enjoy them.”

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Send tips or a Letter to the Editor to janis@inman.com or call (510) 658-9252, ext. 140.

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