Protecting Your Vacation Property or Seasonal Cottage
Hundreds of thousands of Canadians own seasonal cottages and other types of vacation homes. They're a great escape for many and a source of income for
others. No wonder the number of owners is rising steadily.
Right now, some people may be closing them down for the winter, while others are readying them for the winter sports season. And yet others are looking to
make their first purchase.
But what a lot of owners don’t realize is that insuring a seasonal cottage -- also known as recreational property insurance -- has some significant
differences compared with regular homeowners insurance.
It's easy to see why. The risks can be quite different. Your cottage may remain empty for extended periods, it may be in an isolated location, and you may
loan it out to friends and family or rent it out to third parties.
A Trashed Home
And as an example of the risks associated with temporary rental, recall that incident here in Calgary in 2015 when a couple's home, which they rented out
through the online Airbnb service, was totally trashed, suffering damage estimated at $75,000.
We don’t wish that on anyone, but the incident does emphasize the hazards of the vacation rental businesses and the importance of having the correct
insurance in place.
It also underlines the reasons why you need to talk to a seasonal cottage or vacation home insurance expert. You can’t afford to get it wrong.
A look at some of the key points, highlighted by the Insurance Bureau of Canada (IBC) will explain why:
- Some insurers will only protect your vacation home if they also provide coverage for your primary home. But there are some who will provide a policy just
for your cottage.
- Some existing homeowner policies can be extended to provide additional cover for your vacation home,
- Because the cottage might be empty for extended periods of time, insuring against perils like vandalism or water damage can be more costly than with
conventional homeowners coverage.
- Some things that are covered in a standard home policy usually aren’t included in vacation home insurance. There aren’t many but these include things
like sewer backups and loss of food in a freezer. Recreational vehicles, campers and trailers also are not covered.
- The actual premium and scope of coverage will depend on how your vacation property is used and how often you use it yourself.
Different Types of Coverage
There are also several different types of seasonal cottage insurance. The two main types are:
, which, as its name implies, covers the building and its contents for most risks. Excluded risks are specified in the policy, so you always know what's
protected and what isn't.
This type of insurance protects you against only specific, named threats, typically fire and smoke damage.
You may also take out separate protection for risks such as:
As mentioned earlier, your contents will be covered in a comprehensive policy. Items that you move between your primary home and your vacation property are
usually covered on your homeowners policy. But, in either case, you can buy extra contents insurance if you need it.
Again, some policies include outbuildings, like sheds, boat house and garages, and others don't. But you can still obtain the protection you need via a
separate policy or endorsement.
, like power boats, sail boats and canoes.
There are also, of course, many ways in which seasonal home insurance protection is similar to a standard home police.
For instance, you can often select whether any compensation you received is partial (that is, it takes account of the depreciation in the
value of an item), or whether it provides full replacement cost protection.
If you rent out your home or part of it through organizations like Airbnb, you may need a policy specifically drawn up for this purpose.
However and whenever you use your vacation property it's always a good idea to try to find someone who'll regularly check on it while it's unoccupied. This
may be a permanent neighbour or you might be able to arrange a regular check with local police.
Today, also, with the advent of cheap Wi-Fi technology, it's possible to monitor your seasonal cottage remotely by setting up web cameras around the
That way you can enjoy peace of mind when you're not there.
But you can't watch all the time. That's why you need insurance and why you need to call in experts to arrange the coverage.
To find out how Del Fisher Insurance can provide precisely the protection you need, please get in touch with us for a no obligation chat.