Navigators Insurance Brokers has the knowledge and experience to help you find a cottage insurance policy that fits your lifestyle and budget. The first thing you may discover is that cottage insurance can be more costly than your homeowner policy. The reason is simple: risk. There is a higher percentage of risk involved with insuring a cottage mainly because it is generally uninhabited most of the year. This means that if a problem occurs on your vacation property, you may not discover it for months, leading to even more damage and cost.
In fact, you may also discover that insurers are extremely wary when it comes to offering cottage insurance to applicants. Navigators works closely with underwriters in order to bring the best deal possible to its clients. After all, this is a major investment that is at risk and it is your obligation to insure it.
Is Cottage Insurance Mandatory?
Yes and no. While it is not mandatory to carry insurance for your home or “second home,” mortgage lenders may make it a requirement. But even if you have your cottage insured, the levels may not be set at a sufficient amount to adequately provide protection. A cottage owner may have an old policy that carries a $40,000 limit, but the structure itself is worth 10 times that amount. So being under-insured is a huge mistake. This is why it’s important to look at new or existing policies to make sure replacement costs are assumed.
Specific wording with named perils is highly advisable too. If a family of racoons moves into your vacation spot over the winter, the damage can be tremendous: even worse than flood or fire. If you have named this peril in your policy, then you’ll be covered. Talk to a broker today to find out what other perils that can and should be addressed.
Factors The Affect Cottage Insurance Premiums
Here are only a few of the factors that insurers consider when issuing a cottage insurance policy. In order to better understand the risk involved assumed by insurers, take a look at what they’re going to ask.
- How often someone is on the property. If it’s uninhabited for most of the year a burst pipe due to freezing can thaw in the Spring and remain running until discovered. Without a custodian of some sort, small events can lead to enormous damages.
- Whether you are sole or part owner. If you are the sole owner, this is looked on favourable by insurers. Cottage insurance policies that deal with groups of people can get complicated. Many disputes can arise between the partners as to who is responsible for paying which deductible, etc. You may find it difficult to convince an insurer to take on the risk of dealing with your group.
- The value of the dwelling itself. Like the value of your primary home, cottage insurance premiums are reflections of the value of the home (and property).
- The value of the contents within. Fixtures, furnishing, cabinets, fabrics all contribute to overall value and should be reflected in your cottage insurance policy. It’s always a good idea to create an inventory of the items inside your cottage. Information that is helpful to your insurance company can be: receipts proving ownership and value of damaged items, serial number, make and model info of items.
- The location of the cottage and condition of surrounding forest. Because certain areas are more prone to flooding, and windstorms, the risk may be greater. If your cottage is located near to a tree line, there is a greater risk of a tree falling, causing damage. In fact, it would be advised to contact a professional arborist to determine the risk that surrounding trees pose. By simply removing certain trees, you can greatly reduce the risk of damage and this can impact on your cottage insurance premiums.
The Main Concerns Addressed by Cottage Insurance
The main threat to your vacation home is windstorms causing falling trees. Beyond that, is the risk that your plumbing will fail, causing flood damage to structures and the surrounding property.
Do You Need Cottage Insurance If You Rent It Out?
If you are engaged in a business activity, then yes, you will need to have specific wording in your policy. However, if you are renting your unit out in a friendly fashion, then your existing coverage may be enough protection. Be aware, however, that being under-insured can be catastrophic. Your personal liability limits must be able to include accidents on your property to you, your family and your guests. This is especially important if you allow others to enjoy your property while you’re not there.