Cottage insurance: What you need to know

Why insure a cottage?

Owning a cottage in the countryside or by a lake can seem idyllic. However, just like with a house, accidents or severe weather can happen at any time. The right cottage insurance helps protect your investment and gives you peace of mind in the long term.

Tip: Before purchasing cottage insurance, take the time to clearly identify your needs. Think about the pros and cons, replacement cost, how often you plan to use the property, and how you intend to enjoy it. Some insurance companies offer attractive savings when you bundle your coverage. Find out what works best for you!

Seasonal vs. year-round cottage: Which insurance should you choose?

The type of insurance you choose for your cottage will depend on how you use it. Will you stay there only in the summer or winter? Do you plan to visit every weekend with family members?

A) Frequent use for a cottage that meets current building standards:

• Your insurer may offer an owner-occupant insurance policy. It provides coverage comparable to that of a primary residence.
• Location will also influence coverage, including proximity to a fire hydrant or fire station.

B) Seasonal use:

Seasonal home insurance offers limited coverage options. The basic policy includes: fire, hail, lightning, and high winds. However, it does not include:

• Break-ins
• Vandalism
• Damage caused by wild animals
• Certain types of water damage

Do you own watercraft, fishing equipment, or other valuable belongings? Add an endorsement to cover these items, or bring them home after each visit.

C) In all cases:

Talk to your insurer to fully understand what is covered … and what isn’t. Prepare your questions ahead of time:

• What is the minimum occupancy frequency required for certain types of coverage?
• Which belongings are automatically covered?
• Do you need to provide an inventory or proof of purchase?
• How are exclusions applied?

Good to know: Some municipalities require proof of insurance before issuing a building permit, renovation permit, or short-term rental permit. Check local regulations to avoid unpleasant surprises.

Exclusions to consider in your cottage insurance

Certain exclusions can be covered through additional coverage:

• Theft and vandalism: These risks are generally not covered under basic seasonal home insurance policies.
• Water damage: Some water damage is covered under a basic policy (such as a burst washing machine hose). Water damage caused by flooding or seepage through the roof or windows may be covered under additional protection.

Speak with your insurance agent or broker, who can offer you the best coverage for your secondary residence based on your situation.

Insurance for a rental cottage: Be transparent!

If you rent out your cottage, expect to pay a higher insurance premium. Since the risk is greater for the insurer, they will charge higher fees to provide you with coverage.

Good to know: Some insurers are reluctant to cover rental cottages. It is not uncommon for them to require that your primary residence be insured before agreeing to insure your cottage.

Always inform your insurer of any change in how your cottage is used (switching to rental, major renovations, adding a hot tub, etc.). Failing to disclose changes could jeopardize your claim settlement if a problem arises.

What insurance covers your cottage renters?

Your cottage renters are covered by the liability coverage of their own home insurance policy. If your tenant accidentally causes a fire, for example, their personal liability coverage will compensate for the damages caused.

Tip: Ask for a copy of the home insurance policy of anyone renting your cottage. If they don’t have one, it may be worth reconsidering before renting to them.

Protecting your cottage through the seasons

Regular maintenance is key to avoiding certain risks and protecting your real estate investment. Proper upkeep helps prevent many problems, including pest infestations, which are excluded from most policies.

If you only use your cottage in the summer, make sure to prepare it properly before and after each season. Read these tips:

• Opening your cottage
• Closing your cottage

These crucial steps could save you from many unwanted surprises when you’re ready to enjoy your property.

Securing the premises

Install working smoke detectors, an alarm system, or real-time security cameras. This can not only reduce your risks, but may also entitle you to discounts on your insurance premium.