As much as cottages are an escape from everyday life and the backdrop of many core memories, the risks that come with owning one are not insignificant. After all, cottages are often left vacant for long periods, situated in remote areas, exposed to harsh weather, and host to recreational activities that can increase the likelihood of accidents involving guests, for which you’re liable.
It is for this reason that cottage insurance exists.
But how exactly is cottage insurance different from home insurance? What does it cover? In this article, you’ll find the answers to these questions, as well as a general explanation of why cottage insurance can be expensive and what you can do to make the cost more manageable, all while making your cottage safer and more secure at the same time.
What is cottage insurance?
Cottage insurance is a specialized type of property insurance designed to protect a seasonal property against risks like weather damage, theft, and liability. Whether you call it a cottage, cabin, lodge, or chalet, these seasonal properties or vacation homes require insurance that accounts for their unique risks. So while it is similar to standard home insurance, it is not exactly the same.
What does cottage insurance cover?
Cottage insurance covers the physical structure of your cottage, the personal property inside it, and your personal liability. While these coverages may be similar to those in a standard home insurance policy, they are tailored to the unique risks of seasonal properties.
- Dwelling coverage: Covers the costs of repairing or rebuilding the physical structure of the cottage if it is damaged by a covered peril.
- Personal property coverage: Covers the repair or replacement of your belongings (ex. clothing, furniture, electronics) if they are damaged, stolen, or destroyed by a covered peril.
- Personal liability coverage: Covers legal and medical costs if you accidentally cause injury to others or damage their property. As cottages often host guests, the risk of guest-related accidents is heightened, making this coverage all the more important.
As with any insurance policy, terms, conditions, and exclusions apply. However, cottage insurance often has stricter limitations than a standard home insurance policy due to the increased risks associated with seasonal properties. Here are a few examples of what cottage insurance typically does not cover:
- Damage caused by natural disasters (ex. floods, earthquakes), particularly in high-risk areas
- Damage caused by short-term rental guests (ex. Airbnb or Vrbo)
- Damage caused by pests, rodents, wildlife, or insects
- Damage caused by neglect or lack of proper maintenance
- Damage due to wear and tear or gradual deterioration
Why cottage insurance can be expensive
There are a lot of costs associated with owning a cottage, and one of the arguably most important is insurance. The fact is, however, that cottage insurance can be expensive. Here are some of the most common reasons why that is:
- Extended periods of unoccupancy
- Remote location
- Increased liability risk
- Susceptibility to weather-related damage
Extended periods of unoccupancy
Unlike your primary home, which you may only leave vacant for a few weeks at a time, your cottage may remain unoccupied for months, especially during the off-season. During these periods, issues like burst pipes, theft, or wildlife damage can go unnoticed, leading to more extensive damage over time. As a result, insurers of cottages will often charge higher premiums to account for this added risk.
Remote location
While homes in a city or suburb are often within a few kilometres of fire and police stations, cottages are often situated in more remote locations. As a result, it can take emergency services significantly longer to reach you in case of an emergency. During the off-season or in severe weather conditions, access to your cottage may even be limited or completely cut off. To account for the potential delay and the damage that can occur in the meantime, insurers may charge higher premiums to account for this added risk.
Increased liability risk
Recreational amenities like docks, fire pits, boats, ATVs, snowmobiles, and hot tubs are common features of cottages. However, these amenities can increase the likelihood of accidents or injuries – incidents for which you, as the owner, could be held financially responsible. Since these activities and amenities are not typically found in most primary residences, they can contribute to the price difference between cottage and home insurance premiums.
Susceptibility to weather-related damage
One of the reasons you bought your cottage may be its proximity to the water, mountains, or other scenic natural features. Unfortunately, these locations may be exposed to more severe weather events, such as heavy rainfall, snowstorms, or high winds. This is especially concerning during the off-season when your cottage may be unoccupied for months at a time. During these periods, weather-related damage can worsen without being noticed, potentially leading to more expensive repairs when you return.
How to get cheaper cottage insurance
While you can’t completely eliminate the risks that insurers associate with owning a cottage, there are steps you can take to reduce them. By enhancing the safety and security of your property, you not only protect your investment but may also be able to bring down the cost of cottage insurance.
- Install a monitored fire and security system, including alarms, cameras, and motion detectors
- If your cottage is in an area prone to wildfires, add firebreaks and maintain them regularly, particularly during peak wildfire season
- Improve emergency access by maintaining clear roads or paths, especially in the winter or bad weather
- Elevate your electrical system to protect your wiring, outlets, and appliances from water damage, and reduce the chance of short circuits and fires
- Install sump pumps to help prevent water damage
- Keep electronics, jewelry, and other valuables to a minimum and move them to your primary residence (or at least lock them up) during the off-season
- Renovate using durable materials, such as storm-resistant windows or roofing
