Vacation Property (Cottage) Insurance

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Do you happen to own a vacation property? These type of properties can definitely be fun, but don’t overlook the need to have proper insurance coverage for your retreat.


What is vacation (cottage) property insurance? Do I need it?

Vacation property insurance refers to a policy covering a property that’s not your primary residence. In Canada, the most common kinds of vacation properties are cottages but something like a ski chalet would also qualify. If you have a vacation property, you’ll need to insure it.

This kind of insurance has many of the same characteristics as primary home insurance. Typical policies come with the following coverage:

  • Property and contents If your property or contents are damaged, lost, or destroyed because of specified factors, this part of your policy will cover you. You’ll usually be covered in case there’s a fire, damage due to falling objects, or vandalism, among other risks.
  • Liability coverage If you’re responsible for damage or injury to someone else or their property, liability coverage protects you. For example, if you have guests at your cottage and one of them falls down the stairs and suffers a serious injury, your policy will cover you against a lawsuit (up to a specified amount).

Things I need to know as a vacation property owner

Before purchasing insurance for your vacation property, there are some things you need to know:

  • You can have your vacation property included in your primary home’s insurance policy. This is known as seasonal or secondary property insurance.
  • You can choose to buy a separate policy. Keep in mind, however, that most insurance companies will insist that you insure both properties with them (i.e., you have to insure the primary residence with the company in order to qualify for vacation property insurance).
  • Whereas primary home insurance policies often cover “all perils” (i.e., all risks), vacation property insurance typically only insures “named perils.” If a peril isn’t mentioned in your insurance agreement, it’s not covered.
  • Some kinds of risks can be more expensive to insure. Certain risks are more expensive to insure for a vacation property. For example, the risk of theft is higher in cottage country because the property may be unoccupied for long periods of time. This raises the likelihood of a claim. Similarly, if a pipe bursts, it may cause more damage if the owner isn’t living there.
  • Make sure any detached structures are covered: You may have a boathouse or guesthouse on your property. If you do, make sure it’s also covered.
  • Have a sense of how often you usually visit your vacation property and whether you ever intend to rent it out. This can affect the kind of coverage you’ll get and what your premiums will be.

Do insurers require a credit check?

A credit check isn’t required in order to get vacation property insurance but it can be helpful. For example, if you have a solid credit history, it’s in your interest to grant the insurance company permission to run a credit check on you. Insurance companies associate good credit ratings with people who don’t make many claims. This can help lower the cost of your vacation property insurance.


Where am I not covered with my insurance?

Some risks aren’t usually covered by vacation property insurance. The following perils are typically excluded from coverage:

  • Sewer back-up coverage
  • Fences and gardening equipment
  • Trees, shrubs, and outdoor plants
  • Food stored in a freezer

In addition to these special exclusions, the same things not covered by your primary home insurance policy also aren’t included in your vacation insurance, such as:

  • Personal liability resulting from running a business out of your home
  • Damage as a result of pipes or indoor plumbing freezing
  • General wear and tear
  • Damage caused by rodents, insects, or termites
  • Damage caused by earth movements such as landslides
  • Any damage or destruction due to an intentional or criminal act