Cottages are your home away from home. They’re built with comfort and adventure in mind, capturing stunning style and the luxury of living on the water. The desire for cottages is increasing at a record pace, a trend in real estate partially linked to the rise in hybrid and remote work arrangements, not to mention the allure of escaping the city.1
The popularity of cottages means cottage insurance is an increasingly valuable and necessary product. Renting out cottages is also increasingly popular, especially among individuals and families who may own more than one. As a result, cottage rental insurance is rising in importance as well.
Cottage insurance is like home insurance, covering similar risk factors, including fire, theft, vandalism, and water damage. It can even cover animal damage, such as that caused by bears.
However, cottage insurance often distinguishes between “vacant” and “unoccupied” cottages. Cottages are typically considered unoccupied when there is the intent to return, such as closing a cottage for the winter and returning in the summer. Insurance policies can limit the length of this status because the longer an individual doesn’t visit their cottage, the higher the risk for a potential loss. For instance, initial damage from a winter storm can increase if an individual doesn’t visit their cottage and the damage goes unfixed.
If there is no intent to return, the cottage is considered vacant. There is also often a limit to how long a cottage can remain vacant before the insurance policy is no longer valid. Be sure to inform your broker of any changes in how you intend to use your cottage. They may be able to advise you on some best practices for mitigating risk while you aren’t there.
If you want to rent your cottage, even for short periods, you may require additional insurance coverage, as many regular cottage insurance policies will not cover the additional risks. Always speak to your broker before engaging in any rental activity with your cottage.
Renting out your cottage can expose you to additional risks than simply using your cottage as a secondary residence. Thus, you may wish to explore insurance for cottage rentals according to your unique needs and specific risk factors.
Umbrella insurance is a form of personal liability insurance that can be useful to add to cottage insurance, including cottage rentals. Umbrella coverage acts as an extension of your personal liability insurance. It offers additional protection if you’re liable for more than the limit on your underlying policy, such as home, cottage, automobile, and watercraft coverage.
This insurance coverage can be invaluable for high-risk activities, such as driving a boat or other personal watercraft, and where your cottage has potential hazards on site, such as water access. The more recreational vehicles and amenities your cottage contains, including ATVs, water trampolines, floating islands, and wakeboards, the higher your risk exposure. High-risk exposure at a cottage can overtake the typical personal liability limit, which is why umbrella coverage can help.
You may also consider purchasing income loss coverage to rent your cottage. This can help protect you against the financial impacts of an insured risk that causes lost rental income. For instance, this can include storm damage that renders the property unsafe for a few weeks until the damage is fixed, meaning you cannot rent it for that period.
If you have watercraft at your cottage that renters will have access to, you may also wish to have insurance to cover the use of any incidental watercraft, including a boat, during rental periods. These items carry a higher risk and often merit additional coverage.
Named perils coverage is a common element of cottage insurance, including for rentals. The only risks a claim would cover are those specifically named in the insurance policy. For instance, if animal damage, such as a damaged door due to a bear, is listed, this is an insured risk and would be covered. However, if detached structure protection wasn’t listed, such as for a boathouse, any damage to it is not an insured risk. If named perils coverage is selected, it is essential to consider what specific perils merit inclusion according to your situation.
When you own a cottage, especially when renting it out, you should consider taking several measures to maintain adequate insurance coverage when opening and closing your cottage for the season.
Basic maintenance tasks make up most of the recommended measures when closing your cottage:
It’s also important to visit your cottage promptly after significant weather events to assess and repair potential damage. Additionally, you may wish to enlist a service to monitor your property during the off-season and alert you of any issues.
When opening your cottage for the season, there are two main measures to take:
You should also check your cottage’s alarms, such as smoke and carbon monoxide, to ensure they function correctly.
To protect your cottage when you’re not present, consider installing a security system to help deter potential break-ins and protect your cottage amenities, such as recreational vehicles.
Other sensors that can be helpful, particularly in the off-season, include temperature and water sensors. These sensors can alert you to burst or freezing pipes, or even if the water is left running – and let you know to shut off the water, no matter where you are.
Heading to the cottage for the long weekend can be an incredible escape. Be sure you’re protected from financial losses by talking to an experienced insurance broker like Cowan Private Client.
At Cowan Private Client, we are dedicated to protecting what you are passionate about. Our expertise, personalized service, and commitment to excellence set us apart in the industry. Contact Cowan Private Client today for personalized recommendations on cottage insurance.