Cottage Insurance: 10 Questions You Need To Ask Before Choosing a Policy

Your cottage is your safe haven. Your peace and quiet. Your vacation! But without the right cottage insurance coverage, your home-away-from-home might actually become:

a) A safety risk and

b) A Financial liability.

Are you investing in a new cottage property this year? Maybe you already have a cottage and a policy but aren’t happy with the cost or coverages you’re getting.

Now is the time to start thinking about (or re-thinking) your cottage insurance policy.

After all, your cottage policy is what protects your vacation home in the event of:

• Fire
• Theft
• Explosions
• Vandalism
• Damage from falling objects
• Weather Damage

But not all cottage policies are the same.

Do you need help understanding cottage policies and how to choose the right one?

In this article, we explore some of the most important factors in choosing your cottage insurance policy. So you can make the best choice for your family, budget and investments!

Keep reading for 10 key questions you should ask BEFORE choosing your cottage insurance policy this year.

 

1. What are the policy differences between seasonal and year-round cottage insurance?

Do you have a seasonal cottage or a year-round cottage? This is a crucial detail for your insurance company to know. Especially if you’re looking to narrow down your coverage needs and reduce your insurance costs.

Seasonal Insurance

Seasonal cottages are not winterized and are only accessible for a part of the year.

Do you have a seasonal cottage? If so, our Mackay brokers recommend seasonal cottage insurance, also called basic coverage.

This basic insurance covers your seasonal cottage and belongings. But it does not automatically insure seasonal detached buildings (i.e. a boathouse). You can, however, add this coverage at an extra cost.

That’s why it’s considered a Named Perils Coverage plan. It only covers losses resulting from perils that are clearly identified in the policy.

Seasonal-use cottages are usually considered a higher risk because cottagers visit them less. Thus they are not maintained as regularly.

Year-Round (Second-Home) Insurance

If your year-round cottage is accessible 365 days of the year, your Mackay broker recommends broad coverage.

This policy includes protection for your cottage, detached buildings and belongings.

This form of coverage is commonly referred to as Second-Home Insurance. Why? It covers all risks associated with homeownership. Much like your Home Insurance policy does.

2. Does a cottage insurance policy cover a cottage located on an island or remote location?

While some cottagers choose a local, more public location for their vacation home, others prefer the off-grid lifestyle.

But will your insurance company still cover a cottage located on an island or other remote location?

That depends on which insurance company you work with.

While some Ontario insurance companies refuse to insure remote vacation homes, others specialize in it!

In this case, we recommend speaking with your insurance provider BEFORE purchasing your cottage. 

They may agree to ensure you, but pay close attention to the insurance premiums they offer you. A cottage not easily accessed makes it an extremely high risk.

And  many providers tend to increase insurance premiums for remote locations because they are not easily accessible by:

• Emergency Medical Services
• Fire Halls
• Fire Hydrants
• Hospitals…etc.

3. Does an off-grid small cabin still need insurance?

The simple answer is no.

Smaller cabins (600 square foot buildings) deep in the woods and without power don’t legally need insurance.

But while cottage insurance is not required, third-party liability coverage is always a good investment.

Protecting yourself while another individual is on your property is always crucial.

And while we are on the topic of guests…

4. Do you need liability protection for cottage guests?

If you own a cottage, chances are you host many family and friend get-togethers every summer. After all, who wouldn’t want to share such a gem of a location with their loved ones?

But if you don’t have liability insurance, these events become a big financial risk.

Here’s why:

As a cottage owner in Ontario, it is your legal responsibility to make your property as safe as possible. In fact, Ontario’s occupier’s Liability Act clearly states:

“An occupier of premises owes a duty to take such care as in all the circumstances of the case is reasonable to see that persons entering on the premises, and the property brought on the premises by those persons are reasonably safe while on the premises.”

This means you need to ensure all aspects of your cottage property are reasonably safe, including your:

• Cottage
• Docks
• Waterfront
• Boats
• Land
• Porch
• Dock…etc.

Liability insurance protects you in the unfortunate event of injuries resulting from a slip, fall, drowning, watercraft incident…etc. on your property.

5. Does a cottage insurance policy cover renters?

Planning on renting out your cottage? Be sure to tell your insurance company!

Some providers don’t allow cottage rentals on their policies. So you may need to look for a different insurance provider if you plan to rent out.

On its own, your cottage policy does not usually cover renters. But for companies that offer it, adjustments to accommodate rental situations are usually an option.

6. What structures ( i.e. dock, boathouse) does your cottage insurance policy cover?

As mentioned before, the structures covered on your cottage insurance policy depend on what type of policy you choose.

Seasonal cottage insurance offers Named Perils Coverage. This usually includes attached structures like the garage and deck. It does not, however, cover other outbuildings unless otherwise noted.

On the other hand…

All-season cottage insurance is an All Risk policy, much like your home insurance policy. So it does cover unattached, outdoor structures, including:

• Boathouses
• Sheds
• Detached Garages
• Bunkies

7. Are cottage toys (i.e. boats) covered by a cottage insurance policy?

Most cottage toys require additional or separate coverage. This can include your:

• Boat
• ATV
• Jet Ski
• Inflatable Dock
• Kayak
• Paddle Board
• Water Trampoline…etc.

These items are usually not included in your cottage insurance. However, you must check with your insurance company on what is and isn’t covered.

8. Does cottage insurance include Replacement Costs or Actual Cash Value?

Every insurance company is different. So understanding the financial reimbursement factor of your cottage insurance coverage is crucial. After all, replacement costs and cash value are two potentially very different amounts. And you want to ensure that you’re getting the most out of your policy.

Replacement Costs

If your insurance company promises replacement costs, you’ll receive the repair costs or item replacement in full. With zero depreciation.

Actual Cash Value:

If your insurance company promises actual cash value, you’ll receive the current, depreciated value of the building.

9. Do your home and cottage insurance have to be with the same company? 

Many insurance companies won’t insure your cottage unless you have existing home insurance with them. While others specifically specialize in vacation home insurance!

So before you start shopping for the best cottage insurance policy, be aware of your limitation. Ask your insurance company what their requirements are and proceed from there!

10. How do you keep a cottage insurance policy valid?

For your insurance policy to stay valid, there are usually a few requirements set out by your insurance provider.

For example:

Many companies insist their clients make regular visits to their seasonal cottage throughout the year.

Failure to make these regular visits could result in your policy becoming invalid.

If you’re unsure what your insurance company requires of you for a valid policy, ask your insurance broker! They will review your policy, or potential policy, with you to ensure you understand your role in the policy validation process.

 

Get The Right Cottage Insurance Coverage With Mackay!

Whether you have a cottage, a cabin, a lakehouse, a hunting camp or a chalet, we’ve got the insurance coverage you need!

Get in touch with your Mackay broker today to learn more about our cottage insurance options.

You can reach our Belleville office at 613-966-5740 or our Napanee office at 613-354-2555. You can even start your online application process for cottage insurance right away!

Happy Cottage Season!