Like other kinds of property insurance, the type of cottage insurance you will need depends on the value of the property you insure, how you use it, and how frequently you are there. Because a cottage is considered to be occupied only part-time, there are additional risks for when the property is left vacant as damage might not be detected for some time and result in additional damage. For example, you may experience greater damage if a tree falls on your cottage and you are not aware, or can’t get there right away to alleviate the problem.
If you already have homeowners insurance in Edmonton, you may be able to get your cottage added on to your current policy or you may wish to obtain a separate stand-alone policy depending on its use. If you rent out your cottage, you should notify your insurer and inquire about supplementary insurance protection. Similarly, if you rent a cottage, you should find out if insurance is included with the cost, especially in the event of an accident or injury.
Adding a Cottage to Your Existing Homeowners Insurance Policy
If you add your cottage to a pre-existing home insurance policy as a secondary or seasonal location, then you need to be aware of what exactly you are insured for. With named perils, you have insurance coverage for specific risks only (such as damage to the cottage from fire, smoke, lightening, fallen tree) and not for unnamed risks. Damage from theft or vandalism can be more difficult or more costly to arrange if the property will be vacant for some time. As well, some policies will cover damage from critters and rodents while others do not, so it is important to speak to your insurance broker about your coverage before moving forward with a rental agreement.
You will want to review the total amount of third party liability, premises liability and contents coverage available. You don’t want to be underinsured if you have valuable contents that are permanently kept at the vacation home. Detached private structures, such as a boat house, garage or shed, are usually covered for a fixed amount.
Obtaining Separate Stand-Alone Cottage Insurance in Edmonton, Alberta
A separate cottage insurance policy is more comprehensive than adding your cottage to your existing home insurance, but some exclusions are common. Typical exclusions include losses from a septic backup, flooding, fuel oil release, and damage, or loss of motorized vehicles, campers, trailers, buildings used for business or farming purposes from lightening or earthquakes.
If you keep watercraft on your property, you may want to consider a separate boat insurance policy. A canoe, kayak or small sailboat may be covered, but a powerboat normally needs its own insurance.
Business and Vacation Rental Insurance
If you plan to rent out your cottage, protect yourself by notifying your insurer and be sure you obtain the appropriate insurance. Failing to do so will create headaches if something does happen, and could even lead to the cancellation of your policy.
Some insurers will allow a renter for a very short period (e.g., a week) and some will cover renters with specific conditions. Many policies exclude vacation rental activities, however, because they classify such activities as “business” activities. These exclusions make sense because the policy premium was not established with a view that you would be earning a regular income. As a result, there will be additional wear and tear on the property, and a greater risk of someone getting injured with more people on the property.
If you decide to rent out your cottage, consult with your insurance broker about your coverage. In order to be protected from any third party claim made while the cottage is being rented, you should ensure that you have adequate third party liability insurance. Also consider hiring a property manager for maintenance, especially to ensure that your property is safe for young children and elderly guests. Creating a rental agreement will further help to reduce your risks with renters. Here you should outline the number of guests permitted, whether smoking or pets are allowed, and the responsibilities of the owner and renter, among other terms.
Insuring Your Cottage Vacation
If you will be renting a cottage, check the rental contract to find out what insurance, if any, is included. Property damage is likely to be your responsibility in the contract. To protect you and your family, you may want to consider purchasing short-term travel insurance if you have no other insurance coverage, especially if the cottage is located out of province.
Prepare for Cottage Season with MBS Insurance in Edmonton
If you are looking to rent out your cottage, or are simply using it as a seasonal property, it’s important to obtain the proper insurance to protect both your family and your guests. If you don’t understand your coverage and are underinsured as result, you could find yourself having to pay out of pocket expenses if something were to happen.
Invest in the right type of homeowners insurance in Edmonton for your specific circumstances. At MBS Insurance Brokers Ltd, we have access to a wide range of companies that offer special packages and pricing options for different types of homes, including seasonal properties and cottages.
Contact us today online for a free quote, or at 780-436-7880.