How does home insurance work for a seasonal property?
Do you own a seasonal property, such as a cottage? Then it’s important to make sure it’s properly insured. Cottages can be quite valuable. In some regions of Canada, like Muskoka, cottages are worth as much—sometimes even more—than homes in urban areas. That means it could represent a good portion of your net worth. Since you may be away a good portion of the time, you can to make sure it’s protected.
Home insurance on seasonable properties shares some similarities with home insurance on your principal residence, but there are also some key differences to be aware of. How often you visit your cottage and how you plan to use it will determine what type of insurance you’ll need.
How frequently will you be there?
Before shopping for a home insurance policy for a seasonal property, ask yourself how long you intend to be there. Do you plan to use it throughout the year? A lot of seasonal property owners rent their property out when they aren’t there. Be sure to consider this and more when shopping for home insurance.
Your options for home insurance may be limited. Some insurers will only consider insuring your seasonal property if they insure your principal residence. If you have an existing home insurance policy, your seasonal property can often be listed on it as a secondary or seasonal property. You also have the option of buying home insurance separately for your seasonal property.
What home insurance coverage is available?
When it comes to insuring a seasonal property (often referred to a “recreational property”), your home insurance choices may be limited. You may only be able to find a policy that protects your property against named perils, rather than a comprehensive home insurance policy.
In case you aren’t familiar with a named perils policy, it protects your seasonal property against risks outlined in your policy, such as fires and explosions. If it’s not named in your home insurance policy, then you aren’t protected.
Similar to home insurance on your principal residence, flooding and vandalism are typically excluded. If you’re able to obtain coverage for these risks, it could make your home insurance policy substantially more expensive.
That’s why it’s important to make sure your seasonal property is well taken care of when you aren’t there. It’s a good idea to let neighbours know when you aren’t going to be there for an extended period of time. You’ll also want to check in on your seasonal property periodically to make sure everything is ok. The last thing you’d want is for a water pipe to burst or for someone to break into it when you aren’t present.
If you’re going to have guests at your seasonal property, it’s important that you have third-party liability coverage. The last thing you’d want is for a guest to get hurt at your property. Not only would you feel bad, you could find yourself financially and legally responsible.