Nothing says living in Ontario like the idea of “going to the cottage”. Whether it’s a lakeside retreat or a countryside property, it is part of the fabric of living in Ontario. These properties also evolve from a summertime getaway into full-time homes and part-time rental properties. But insuring a seasonal property isn’t the same as home insurance. So, what exactly is cottage insurance? Your insurance needs to be tailored to these seasonal structures, and in this article, we’ve gathered everything you need to know about cottage coverage in Ontario.
What Is Cottage Insurance?
To fully understand the importance of cottage insurance, we must first learn exactly what it is! Vacation property insurance, or cottage insurance, refers to a policy covering a property that is not your primary residence. This type of insurance shares some features with primary home insurance, but cottage insurance includes property, contents, and liability coverage. It’s the best way to protect yourself and your recreational property from perils. Without the proper cottage coverage, you will have to pay for the losses caused by circumstances such as fire, vandalism, or burglary yourself.
Cottage insurance applies to the following dwellings: Cottages, lake houses, chalets, cabins, lodges, seasonal properties, and vacation homes.
Who Needs Cottage Insurance In Ontario?
Whether you bought the cottage on your own, with family members or friends, anyone with their name on the property’s title should be included on the cottage insurance policy. Be sure that each person on the property deed is also named on the cottage policy.
Why Is Cottage Insurance Necessary?
Just as your primary home needs protection, your cottage does too. Seasonal homeowners should purchase a cottage policy to protect their investment. As an owner, you may spend only a limited amount of time there during the year. Cottage properties can face perils, such as vandalism and wildlife damage, that you may not be aware of until your next visit or until someone else checks on the property.
How Much Does Cottage Insurance Cost In Ontario?
Cottage insurance generally ranges from $800 to $3,000 annually. According to IBC.ca, insurers take into consideration:
- Location – proximity to hydrants or a fire station, as well as road access
- Size of the cottage
- Replacement cost(s)
- How frequently is your property used
- How often is it occupied (year-round or seasonally)
- If it’s rented to others
- Are contents kept on the premises?
- Security and monitoring systems
- Property features – Docks, shed, bunkies, garage
- Construction – Materials, age of roof, plumbing, and electrical systems
If your cottage is large and features many amenities, it will cost more to insure. If your cottage is small and simple, the insurance will be less. It’s important to note that most insurance companies will consider insuring your cottage only if they insure your primary residence.
What Is Covered With Cottage Insurance?
You can have your vacation property included in your primary home’s policy. This is known as seasonal or secondary property insurance. Bundling your coverage can help reduce your overall insurance costs. Additionally, you can choose a separate policy. However, many insurers will insist that you insure all properties with them. The items covered by your cottage insurance package depend primarily on whether you purchase a comprehensive form policy:
- Comprehensive cottage insurance covers your cottage building, outbuildings, and contents for all risks, except those specifically excluded in the cottage insurance policy.
- Named Perils (Broad Form) insurance provides comprehensive coverage on the big-ticket items, such as the building itself, and any named perils coverage on the contents.
It’s important to remember that certain risks are more expensive to insure for a vacation property. The risk of theft is higher in cottage country because properties may be unoccupied for long periods, increasing the likelihood of a claim. Similarly, if a pipe bursts, it may cause more damage if the owner isn’t living there, thereby preventing extensive water damage.
What Is Not Covered In A Cottage Insurance Policy?
For cottage insurance policies, common exclusions include:
- Coverage of faulty workmanship
- Freezing pipes during the heated season
- Rust or corrosion from extreme temperatures
- Mould and water damage
- Wear-and-tear
- Damage caused by animals
- Septic backup and flooding
- Damage to, or loss of, motorized vehicles, campers, or trailers
- Belongings of others left at the property
Do I Have Enough Coverage?
In addition to the policy coverage listed above, consider additional cottage insurance. Overland water coverage, bylaw coverage, and sewer or septic backup coverage will give you peace of mind, especially during months when you may not frequent your property. Depending on where your property is and the type of recreation you are involved in, other types of coverage considerations may include:
- Damage by wildlife
- Fire truck coverage
- Watercraft coverage
- ATV coverage
- Snowmobile coverage
- Trailer coverage
- Protection for docks, bunkies, and other structures
Are There Discounts Available?
Discounts are offered for steps taken by the cottage owner to reduce the risk of a loss. The outcome for you as a cottage owner means you can often reduce your insurance rate. There are several ways to save money on your cottage insurance, including discounts for:
- Bundled coverage. Combining your home, seasonal home, recreational vehicles, or car insurance with the same insurance company can save you up to 10% with some insurers.
- Claims-free, Loyalty, and Mature-age discounts.
- Warning systems. Alarms, power loss detectors, and centrally monitored burglar/heating alarms can translate into greater savings.
- Smart water devices. Purchasing leak detectors and smart shutoff valves to stop leaks before they destroy your property.
Always ask your insurance broker about available cottage insurance discounts you may qualify for.
It is important to keep in mind that you will pay less for your cottage or recreational property insurance if it is occupied instead of left vacant, even for short periods. This means that someone will be regularly on-site in case anything goes wrong. You will also pay less for your recreational property insurance if you are not renting it out to third parties.
What is Cottage Insurance: Conclusion
Anyone who owns a cottage knows it’s their pride and joy. Because of this, the best way to protect yourself and your investment is by purchasing cottage insurance! Remember, if you are in the market for car insurance or any other type of insurance, don’t hesitate to reach out to us at isure! Contact us or request a quote today!
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