Cottage insurance: what you need to know
Buying and owning a cottage has its benefits, but it also involves certain responsibilities that are not to be taken lightly. If you’re thinking of buying a secondary residence or renovating the one you already have, it’s best to avoid unpleasant surprises by choosing home insurance for your cottage that meets your needs.
Who doesn’t dream of having a pied-à-terre in the countryside or on a lake? While the idea sounds very charming, it can quickly turn into a nightmare when bad luck or inclement weather enter the picture. Cottage owners need to ask themselves several questions before taking out insurance so that they can figure out their needs.
Cottage insurance: for a seasonal or year-round cottage?
The type of insurance you choose for your cottage will depend on how you use it. Will you only go in the summer or in the winter? Will you want to go every weekend?
If you spend a lot of time at the cottage and it meets current construction standards, you could take out an owner-occupant insurance policy that will give you the same coverage as if it were your primary residence. Other elements will be taken into account by your insurer, such as proximity to a fire hydrant and a fire station.
If you use your cottage only a few times a year, you won’t be able to take out comprehensive (all-risks) insurance. In this case, insurers tend to offer seasonal home insurance with less coverage. The basic policy includes coverage against fire, hail, lightning and high winds, but doesn’t cover break-ins and vandalism, as well as damage caused by wild animals or water. If you own valuable goods, including boating and fishing equipment, you’ll need to add an endorsement to ensure proper coverage, or bring this equipment back to your home after each visit. In any case, take the time to speak with your insurer and read your insurance policy carefully to determine what is and is not covered.
Insurance for a rental cottage: be honest!
Do you own a rental cottage? Expect to pay more for your insurance premium. Since the risk is much greater for the insurer, they will charge more to cover you.
Insurance for rental cottages is more expensive, but it’s essential for anyone looking to make a profit off their secondary residence. Some insurers are reluctant to cover cottages, and require that their potential clients’ primary residence be covered with them before agreeing to insure their cottage.
If you use your cottage seasonally, take the time to prepare it properly for seasonal changes, both when you open it and close it. This crucial step could save you a lot of unpleasant surprises when it’s time to enjoy it.
GOOD TO KNOW! Tenants are covered by their own home insurance liability coverage when they stay in your rental cottage. This means that if your renters accidentally cause a fire, for example, it’s their liability coverage that will pay for the damage. It’s therefore a good idea for anyone renting your cottage to provide a copy of their home insurance policy; if they don’t have one, you may want to think twice before renting to them.