Home Insurance for Cottages Event

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Home Insurance for Cottages

Your cottage is your home away from home. No doubt you’ve invested a lot to purchase and/or maintain your cottage over the years and you want to make sure that it is properly and adequately insured. Many homeowners believe that cottage insurance is similar to their regular home insurance and in some respects, it is. There are also however some important differences that you need to be aware of.

Higher risk means higher premiums

Cottage insurance – or seasonal home insurance – typically has a higher risk and therefore higher premiums than regular home insurance. This is because since you are not living in the dwelling year-round, problems that might otherwise be caught early and repaired can be left to worsen over time. Usually, cottage insurance policies come with a list of “named perils” – that is a list of specific perils for which you are covered such as fire or smoke damage.  Whereas on a yearly occupied property, coverages are typically broader and less expensive.

It is important to review your policy carefully to determine if you are adequately protected. Many seasonal residences are underwritten on an Actual Cash Value basis. This means that your insurer will deduct depreciation from any claim payout. You should discuss the possibility of adding Replacement Cost Coverage (no deduction for depreciation) to your coverage with your insurance broker.

Cottages without year-round access are more difficult to insure

While your idea of cottage paradise might be on an island or in some other remote area to truly get away from it all, you should be aware that this type of property will be more difficult to insure – with some insurers refusing to cover it at all. 

If there is an emergency such as a fire, it will be difficult for emergency responders to get to the property before it is a total loss. Furthermore, the cost to rebuild will be higher since it will be more challenging to get construction crews and materials to the site.

If you are considering building or purchasing a cottage in a remote area, it is a good idea to speak with your insurance provider first to make sure that you’ll be able to get the appropriate coverage.

Specific policy requirements

It would be devastating to suffer major damage to your cottage and then learn that you were not covered because you didn’t meet specific requirements within your insurance policy. Read your policy carefully and talk to your broker about what is expected. Most cottage policies require that the owner makes regular visits to the property each year to inspect it for any potential problems.

Renting your cottage on a part-time basis has become common practice.  Cottage owners can earn their annual costs of carrying their cottage by renting it out for just a few months of the year.  Renting your property for even just a few days can void your policy.  Many insurance companies restrict you from renting via the short-term rental market i.e. Airbnb. 

You should also inform your insurance company of any major renovations to ensure you are covered for any increased value you add to the property. Some renovations may even help to lower your premiums if they help to improve the safety or security of your cottage.

Insurance for outbuildings, docks, boats, ATVs, and other cottage toys

Depending on your policy, you may have limited coverage for outbuildings – these should be listed under “Detached Private Structures” in your policy. Items such as boats and ATVs usually require a separate policy. However, you should be able to save some money if you can bundle them with the same insurer.

Contact ICD Insurance today

If you would like to learn more or apply for cottage insurance, we can help. Contact ICD Insurance today to speak with one of our brokers.