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What To Know About Cottage Insurance When Buying Your Vacation Home

What To Know About Cottage Insurance When Buying Your Vacation Home

April, 04 2022

Buying your first cottage is exciting! Having an escape from the city or a vacation spot to relax in with your children is a great way to spend your downtime. Cottages are common throughout Ontario, so you are certain to find the ideal one for your family.

But once you have located your dream cottage and are ready to buy, you have to make sure your cottage insurance needs are met. Do not neglect this important aspect of cottage ownership.

Read on to learn more about what you should know when it comes to cottage ownership and insurance, then contact the experts at Duliban Insurance for more guidance.

Seasonal Cottages Need Insurance Coverage

Like any expensive asset or purchase you make, your seasonal cottage should be protected by an insurance policy. If you take out a mortgage or finance your purchase, your lender may require insurance. But even if not, having a cottage insurance policy is the best way to protect your investment.

Sometimes people think they have sufficient insurance coverage for their seasonal cottage when they have a homeowner’s policy for their primary home. But your cottage and primary home,  while they are both residences, have critical differences that are important to your insurance company — and for the premium you will pay. Below are some points to keep in mind:

  • Your seasonal cottage is not occupied year-round like your primary home is. This makes it more vulnerable to perils like theft. But it also makes it more likely that a small loss could become a major one. Think of a pipe that bursts while you are home. While it is messy and you will have water damage, you are home to shut the water main off and stop further damage. This is not the case with a home you occupy only occasionally, which means a minor issue can easily become a significant and expensive claim.
  • Seasonal cottages are often located in rural areas. This is part of their appeal, as you want to get away from the crowds and enjoy nature in its beauty. But the rural location can also mean it is more difficult for emergency services to reach your cottage. Hence, risks like fires become more dangerous because it will take longer for the fire service to reach your cottage if they can get there at all. Some roads are inaccessible in the winter months, leaving you on your own if an emergency happens. This raises the risk of a claim and the probability that a claim will be more severe if one happens.
  • Many people rent their vacation cottages to tourists or allow family members or friends to stay in them temporarily. When others are using your cottage, your risks increase. They could be injured, hurt someone else, or cause damage to your property. This presents a greater risk for your insurance company than hosting guests at your primary residence while you are also home.

What Is Cottage Insurance?

Cottage insurance is similar to your homeowner’s insurance policy and can protect it from many of the same perils. Every policy is different, so check with your agent to compare your coverage options for your Ontario cottage insurance. You can purchase coverage to protect you from perils like fire, wind, hail, theft, and more.

If you plan to rent your vacation cottage to tourists for a profit, you will need additional coverage. You should also plan to purchase liability coverage as part of your cottage insurance. Liability coverage is important for any property you own, especially if you will be renting out your seasonal cottage.

Liability coverage will help protect you if someone is injured while at your cottage or if you cause damage to neighboring properties. For example, say you are spending the weekend at your seasonal cottage and invite your neighbors to come over for an afternoon drink. A neighbor trips while walking down your stairs and gets hurt. Or say you rent your cottage out and your guests damage your neighbor’s property when riding snowmobiles. Your liability coverage may apply in these situations.

Just like your other insurance policies, there are some exclusions to every cottage insurance policy. Review your policy or ask your agent to understand what is not covered by your particular policy.

Is Cottage Insurance Expensive?

Seasonal insurance is usually more expensive than a homeowner’s policy at your primary residence. This is because of the additional risks your insurance company faces with extended vacant periods, its remote location, and the rental risks.

We can help you find the best rate possible for your Ontario cottage insurance. Check out our free online quote tool to get started. Comparing rates is the most efficient way to get the best rate, and we work with all the major cottage insurance companies in Ontario.

Additional Cottage Insurance Options

Just as you can customize your homeowner’s or auto insurance policy to best meet your needs, you can also add additional coverages to your cottage insurance policy if you have more coverage needs. Some other, optional coverages you can consider include:

  • Wet Boathouse Coverage
  • Watercraft Coverage
  • Septic & Sump Pit Back-Up Coverage
  • Rental Coverage & Income Protection
  • Detached Structures Coverage

You can also choose to add a replacement cost with many cottage insurance policies. Replacement cost coverage means your items will be replaced or repaired without a deduction for depreciation. This can make a significant difference in the amount you could recover if you had to file a claim.

Ask us how to add these important add-on coverages to your cottage insurance policy today! And if you are just purchasing your seasonal cottage now, we can review it with you to help you understand what coverage you will need. Duliban Insurance is your partner in managing risks.

How Do I Learn More?

To learn more about cottage insurance, contact the experts at Duliban Insurance. Our licensed experts will be happy to answer any questions you have.

External Links:

  1. Financial Consumer Agency Canada
  2. IRMI
  3. IBC

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