Matt Hands, VP, Insurance and MoneySense
Vacation property insurance, also described as cottage 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.
Whatever the definition, if you have a vacation property, you 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.
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).
Step 1: Share some information
Tell us a little about yourself and your coverage needs
Step 2: Compare quotes
We instantly show you dozens of quotes side-by-side from top providers
Step 3: Save money
Choose your quote and secure your insurance rate online, or via one of our licensed brokers
Before purchasing insurance for your vacation property, secondary home, or holiday home, 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. In other words, 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 need and the cost of your premiums.
Is a credit check required?
No, but a good credit history can help lower the cost insurance for your property. A good credit score is associated with fewer claims.
What is the average cost of cottage insurance?
The price of cottage insurance can range from $800 to $3,000 per year. However, many factors influence cost including location, size, seasonal or year round, and roadway access.get a quote
Wear & tear
Insurance is not a maintenance policy. Before your roof collapses or leaks, get it repaired. A proactive approach is much better than reactionary spending.
If your heat source stops functioning, pipes could freeze and leak. Turn off the water if it's a seasonal property.
Damage from bats, skunks, squirrels, rats, mice, chipmunks, or raccoons – all looking for shelter may break in. Any damage isn't covered.
Septic or sewer backup
You can get additional protection for these risks, but without it, you'll be cleaning, or paying someone to do it, out-of-pocket.
Other people's stuff
If a guest or friend leaves or stores their stuff on your property, it's not covered. Be excplicit with anyone who stays at your vacation property.
Whether it's you or a family member, if anyone damages on purpose, there is no coverage to help you.
You can add extra insurance, but on a basic or broad policy, don't expect to have this coverage (unless you live in an area where the insurer mandates it).
A home insurance policy protects from damaged from a power outage/freezer failure. Not so with cottage insurance.
Trees, shrubs, and outdoor plants are typically excluded as is the equipment you use to prune and care for them.
better choices made
to Canada’s top financial institutions
If you rent your cottage, let your insurance broker know. While Airbnb, VRBO, or other home-sharing companies offer insurance, it may be secondary to your own. Your insurer can deny your claim or drop you as a customer if you haven't insured the extra risk.
When speaking with your insurance company, ask about rental income coverage. Essentially, if there is an insured loss (something that prevents you from renting) and you lose the rental and resulting income, this coverage will pay you the missing money.
ATVs, snowmobiles, and boat insurance will require their own policy. If you own a trailer that sits on a piece of land, discuss the details with your provider.
How do I save money on cottage insurance?
What are other cottage risks worth insuring
What should I ask my cottage insurance broker?
Matt Hands, Business Director of Insurance
With 6+ years of experience at Ratehub.ca, Matt’s focus has been on growing its newest business unit, Insurance. He is a thought leader and a valuable resource to respected publications across Canada. read full bio
Whether you need a mortgage, credit card, savings account, or insurance coverage, we help you find and compare the best financial products for your specific needs.
When it comes to mortgages, Ratehub.ca is more than just a place to research and compare the best rates. Our goal is to give Canadians the best mortgage experience from online search to close. This means offering Canadians the mortgage tools, information and articles to educate themselves, allowing them to get personalized rate quotes from multiple lenders to compare rates instantly, and providing them with the best online application and offline customer service to close their mortgage all in one place.
Ratehub.ca has been named Canada's Mortgage Brokerage of the Year for four years straight (2018-2021). With over 12 years of mortgage experience, and over $11 billion in mortgages funded, we deliver you the best mortgage experience in Canada.
How does Ratehub.ca make money?
Financial institutions pay us for connecting them with customers. This could be through advertisements, or when someone applies or is approved for a product. However, not all products we list are tied to compensation for us. Our industry-leading education centres and calculators are available 24/7, free of charge, and with no obligation to purchase. To learn more, visit our About us page.