If you have a seasonal home or a cottage, you’ve likely wondered what kind of property insurance is needed to protect your investment. While vacation property insurance may be the general term for cottage insurance, you’ll want to learn more about getting a policy to protect a home that isn’t your primary residence.
Seasonal properties and cottages are a slightly more unusual insurance class since you may spend less time at the property. You’ll want to create memories at that cottage when you host a Canada Day celebration or have relatives visiting for a milestone without worrying about the possible liability issues.
We will examine what Canadian homeowners need to know about getting protection for properties like cottages, campers, etc. Let’s look at what you need to know about vacation property insurance.
What is Cottage Insurance/Seasonal Property Insurance?
As the name suggests, seasonal property insurance is a type of home insurance coverage for your cottage, cabin, or camper. It’s also referred to as vacation rental property insurance since the assumption is that you don’t spend as much time in this unit as you do in your primary residence.
Your vacation property insurance will likely cover damages to the structure, protection for your personal belongings, and provide you with personal liability if a guest were to get injured on your property. Chances are that you’ll be hosting friends and family at this seasonal home, so you don’t want to be stuck with legal fees if someone falls off the deck or slips on ice while visiting you.
The kind of vacation rental property insurance you obtain will depend on various factors, which we will examine in the next section.
What Type of Insurance Coverage Do You Need For a Vacation Property?
Before you apply for a vacation home insurance quote, you should determine whether the place is a seasonal property or a second home. This distinction will impact how the insurance provider decides your premium.
Secondary Property Characteristics
Secondary property characteristics are the details of the home that determine whether your insurance provider would consider it a secondary home. For example, these conditions include:
- Occupied by you or a family member
- You spend two to eight weeks per year at this place
- The unit has insulation and year-round access
- Insured for 80% of the replacement cost of the items
Seasonal Property Features
To consider a home as a seasonal property, it must meet certain conditions, including:
- You occupy this unit
- It’s used during a season and can’t be accessed year-round (either because it’s restricted by boat access or the roads aren’t plowed during winter months).
- Insured at less than 80% of the cost to rebuild it.
Your insurance provider can help you determine what kind of coverage you need based on the information you provide.
Vacation Property Insurance Considerations
Here are a few other points to consider about your seasonal property insurance coverage:
- Do you need vacation property rental insurance? You’ll want adequate protection if you rent this place out for income. Some providers even offer rental income protection if your unit becomes unavailable due to a covered loss. If you plan to list your home on Airbnb or any other platform, you need to have this protection. Hosting people and treating the property as a business can lead to liability issues, which makes this protection necessary.
- How often will you visit this vacation property? The frequency of your visits will impact your insurance premium, as the provider will consider this a higher risk due to the increased chances of theft, damage, or burglary if you’re not there often.
Type of Vacation Property Insurance You Should Get
With some insurance providers, your secondary property would be eligible for “All Risks,” which would cover you and your belongings against all types of possible losses or damages. Seasonal property insurance would be eligible for “Named Perils,” which includes protection for common issues like fire and water damage. Above all, you should work with your insurance provider to customize your cottage insurance policy based on personal factors.
Similar to home insurance, you can go with two main options for cottage insurance:
- Comprehensive coverage – This coverage would protect your property and everything it includes year-round.
- Broad or basic coverage – This policy would only cover the specific risks outlined in your policy.
What’s Covered Under Cottage Insurance?
What exactly is covered under your cottage insurance policy? It’s essential to note that the coverage you receive will depend on your policy, but here’s what is typically covered.
- Personal contents – If your personal items are damaged, lost, or stolen based on circumstances outlined in your policy, you’ll have coverage up until your limit. You’ll want to review your coverage here since some of your personal items may already be covered under your home insurance policy.
- Property damage – Depending on your coverage amount, your property will be protected due to a covered loss or damage.
- Liability – While you don’t want to imagine the worst-case scenario, you want to protect yourself from lawsuits or legal issues if someone were injured while visiting you. Personal liability is critical for cottage insurance because you don’t want that unlucky summer weekend getaway to become an expensive nightmare.
- Boats – If you have a lakeside cottage with a boat, you’ll want to ensure that your boat, jet skis, and any other motor vehicles are covered under an All Risks policy in the event of theft or damage.
Cottage Insurance Inclusions and Exclusions
We should emphasize that while your home insurance policy will often include “all risks,” a seasonal property insurance policy will usually insure only “named perils,” which are the items that you specifically outline. Some risks will also be more expensive than insurance with a secondary home since you’re not there as often. Because of that, you’re more likely to become a victim of theft or to have an issue go unnoticed for months.
Make sure to review your vacation property insurance policy to identify any exclusions or uncovered items. Some plans won’t offer protection for issues related to:
- Septic tanks
- Sewage backup
- Rodent damage
- Gardening issues
- Other people’s personal contents
- Damages from bears and other animals
- Damages to buildings used for farming
You’ll want to work with your insurance provider to inform them of any other buildings and structures (boathouse, garage, shed, etc.) you have on the property. You could also spend some extra money on enhanced water damage protection and guaranteed replacement for coverage if you had to rebuild the entire home.
How to Get Quotes For Cottage Insurance
If you already have home insurance coverage, you’ll want to start with this for a vacation property insurance quote. However, some home insurance providers won’t provide vacation property insurance if your main home isn’t insured by them as well.
You’ll want to inquire with your insurance company about the differences between “seasonal property insurance, “cottage insurance,” and “cabin insurance,” as they may seem similar but can come with varying costs. Make sure you obtain adequate coverage for your specific situation to avoid discovering that your insurance policy doesn’t cover your garage or boathouse.
How Much Does it Cost to Insure a Seasonal Property?
How much is cottage insurance? According to Ratehub, the premium for a cottage insurance policy ranges from $800 to $3,000 annually. However, the cost will depend on the location, size, how often the policy is used, and the roadway access.
Here are some factors that impact the cost of cottage insurance:
- The specific features of your cottage, like a fire pit or a hot tub
- The type of road access your cottage has
- If there’s year-round access to your cottage
- The type of heating that you use
- Access to medical emergency services like fire halls, hydrants, and hospitals
- Fire alarms, security systems, and any other protection
- The electric wiring of the property
- If you rent this property out
- The amount of time you spend occupying the place
Certainly, we must stress that cottage insurance will depend on various factors, from your personal claims history to the property’s location. Depending on your property, you’ll also want to customize your coverage.
The Final Word
Cabin insurance may initially seem unnecessary for that seasonal property you occasionally visit for a weekend getaway. Still, you never know what can happen since you’re not at this place year-round. You don’t want to arrive at your summer home to discover that your insistence on saving money on vacation property insurance has left you stranded because a flood or a fire has damaged your home.
You’ll want to speak with an insurance broker to determine if you need seasonal property insurance or a secondary property insurance package based on your usage of this home. Above all, you want to protect this investment as you likely spent significant money on it.
