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Insuring Your Seasonal Location

Published on July 7, 2020   Tips Seasonal Insurance

How Is Your Cottage Used?

Like your home, your cottage is one of your most valuable assets. How much time do you spend there? Do you use it year-round? Do you rent it out at some point during the year? The answers to these questions are important when you are considering what type of insurance coverage to buy for your cottage.

Insurers take into consideration how frequently your property is used, how often it is occupied and if it is rented to others. Most insurance companies will consider insuring your cottage only if they insure your primary residence. 

A cottage can be listed on your home insurance as a secondary or seasonal location. You also have the option of separate, stand-alone policy for your seasonal location. 


Cottage Insurance Options to Consider

There are multiple coverage options available from Fire and Extended coverage (named perils) with actual cash value to a Seasonal homeowners package with guaranteed replacement cost. Theft and vandalism, as well as replacement cost, may not be covered with your current coverage. It is best to verify with your broker for specific coverage details.

With named perils, you have insurance coverage for specific risks such as fire, explosion or smoke damage. Other coverages may be available subject to an additional premium, such as water damage, vandalism and theft. For example, if a water pipe bursts or if vandals break in while your cottage is vacant, the damage is likely to be more severe because it takes longer for damage to be discovered.

Another item to consider is the limits of insurance. If you are underinsured, you can be subject to a co-insurance penalty on a partial loss.


Be Aware of What is Not Covered

For cottage insurance policies, common exclusions include coverage for septic backup and flooding, fuel oil release, earth movement (e.g., Earthquake) and damage to, or loss of:

• Motorized vehicles

• Campers or trailers

• Buildings used for business or farming purposes.


Additional Coverages to Consider

Contents. Some insurance packages automatically include contents up to a certain limit. This coverage applies to contents permanently kept at the vacation home. Anything you take back and forth – such as clothing – is covered by your primary home insurance policy. If this coverage is inadequate, additional coverage may be purchased.

Detached private structures. Some insurance packages include limited coverage for outbuildings such as boathouses, garages or sheds. If this coverage is inadequate, additional coverage may be purchased.

Watercraft. Coverage for recreational properties often limits coverage watercraft. It is recommended that these be insured on a stand-alone specialized policy. 

Short Term or long term rentals must be reported to your broker.

If you aren’t sure if you have adequate coverage on seasonal property, call your local branch and speak to one of our insurance professionals.

Insurance Bureau of Canada ...

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