Often seasonal properties are located in rural, remote and unprotected locations, unlike your typical homeowners property.
Cottage insurance policies are designed to cover these risk that are located in these remote locations, also factoring in additional buildings such as bunkies and boathouses.
Should you already have your home and automobile insurance in place.
You may be aware that discounts are often applicable if you purchase both home and car insurance together. Cottage insurance can also be purchased at that same time, provided that your insurance provider has a seasonal property market.
A few things to point out when looking at insuring a recreational property, are as follows:
Secondary versus Seasonal
A secondary homeowners is often available to those risks that are winterized and used all four season. The dwelling would have to be occupied at least every 30 to 60 days, and be on a year round maintained road, some exceptions will apply.
A seasonal property is typically only used for 3 seasons, Spring, Summer and Fall and not occupied at all during the winter months. This can also be for locations that are not on a year round maintained road.
Keep in mind that the insurance value versus the real estate value are two totally separate limits. The insurance providers are looking to insure the dwelling and outbuilding amounts, not factoring in the cost of the land.
Your broker would perform what is often referred to as a cost valuator guide to determine what the replacement value of the dwelling would be in today’s market.
This factors in things such as the year built, construction material, square footage, number of bathrooms, decks, porches etc.
Depending on the occupancy of the cottage as well as the building information it will determine what package you may qualify for.
For the Secondary locations you are more than likely going to qualify for a Comprehensive Package versus the Named Perils or Fire and Extended Coverage most seasonal locations would qualify for.
It is for this reason you should reach out to a Cottage Specialist to help determine your specific needs.
Comprehensive versus Named Perils Form
With a Comprehensive Package, this is providing an All Risk Package unless otherwise excluded.
With a Named Perils Form only those perils listed are covered, so for example things like collapse due to snow load would not be covered.
Also typically with a Comprehensive package coverages such as Guaranteed Replacement Cost Coverage and Single Limit will apply.
There are some exclusions for example a log constructed dwelling may qualify for a comprehensive form but would not qualify for the guaranteed replacement cost coverage.
Sewer Backup Coverage
Many insurers cover optional sewer backup coverage for homes, while with cottage insurers this option may not be available.
Whether it be for your primary residence or your secondary or seasonal residence, this coverage is not automatically included and has to be purchased by way of an endorsement.
Additional premiums will apply. Depending on your location this coverage may not be available with certain carriers.
Overland Water Coverage
In Canada, insurance companies for the past few years have been offering Overland Water as an optional coverage.
This coverage is not automatically included and must be purchased by way of endorsement.
Additional premiums will apply. Many cottages are situated next to rivers, lakes, or bodies of water, which increases the risk of overland water flooding.
Therefore, the option to purchase the Overland Water endorsement may not be available in some instances.
Short-term Cottage Rentals
Many insurance companies will offer rental packages for dwellings rented on a long-term annual basis.
With respects to recreational properties not all carriers will provide the option for the dwelling to be rented on a short-term basis.
It is best to reach out to a Cottage Specialist should you wish to rent out your secondary/seasonal location.
Provided you are renting your property through a valid rental platform, some carriers will allow up to a 180 days of short-term rental, depending on the number of weeks rented additional surcharges will apply.
Hutcheson, Reynolds & Caswell Ltd.
Not only are we here to help you with your home and automobile insurance. Our brokerage has dedicated staff, to assist you with your Secondary and Seasonal cottage needs.