Cottage use is changing. Has your insurance coverage kept pace? Whether you call it a cottage, chalet, cabin or lodge, summer homes can range from simple structures with limited amenities to four season homes with all the luxuries of a primary residence.
With the popularity of home sharing on the rise, many people are choosing to rent out their cottage when they aren’t using it. It is a great way to earn some extra cash in the summer. However, it is important to ensure you are properly covered if you choose to rent yours. Some insurers will recognize that seasonal dwellings are being rented out and offer coverage but there may be limitations on how often they allow it. Coverage for certain types of losses may be excluded while rented. If the rental period exceeds what they allow, a different type of policy may be required. If you rent your cottage without notifying your insurance company, you may be at risk of voiding your coverage in the event of any damage.
If the occupancy of your summer home has changed, even if only for one week, call your broker.
Summer home or second home?
Wouldn’t it be great to be able to work from a lounge chair on a dock? With technology advancement and the ability to get online from almost anywhere, combined with flexible work conditions, people are spending more time at their cottage. Cottages are becoming more like a second home and folks are taking their jobs with them.
There is a difference between seasonal and secondary homes. Occupancy usually dictates what insurance coverage is available. If you are at your cottage year-round, you may qualify for better coverage. Secondary home policies usually offer much broader coverage and cost less than a standard seasonal property policy.
Other things to consider:
Do you have multiple structures on the property? Such as a bunkie, dock, shed or boathouse. Make sure your policy includes coverage for all detached structures.
If you have a boat, it is important to have sufficient coverage in place. Basic coverage may be available for small boats (typically under 26 feet and under 50 horsepower) as an add on to your cottage policy, but for more comprehensive coverage you should consider a separate watercraft policy that comes with coverage geared specifically for boats, trailers and personal watercraft.
Do you rent a boat with your cottage? Your boat insurance policy may prohibit this as it may be viewed as business use. There are also licensing, boating experience and liability exposures to consider.
How you heat your cottage matters. A wood stove will require certification confirming it meets certain standards when it comes to installation, clearance, distance from combustibles, maintenance, etc. A wood-burning appliance that does not pass inspection may result in an insurer declining to cover your property.
Not all insurance policies are the same. Always be sure to discuss your individual needs with your insurance broker to better understand what your policy covers. Your home away from home is a place to get away from everyday stress and just relax. Part of that is having the peace of mind knowing that you are properly insured.
Cottage use is changing. Has your insurance coverage kept pace?