Is cottage insurance different from primary residence insurance?

Yes, very much so.

Unlike primary residences, cottages and secondary properties oftentimes have assets outside of the main structure itself (think: bunkies, boat houses, guest cottages, docks, water crafts and more). Your coverage plan will need to consider each of these assets, and there are providers who may be able to craft policies that take the property as whole - outbuildings and all - into one plan, but you also might need to look into getting separate coverage for assets that might be worth significantly more. For instance, a $5,000 simple motor boat for getting to and from the cottage can easily be wrapped into your main coverage. However, for a more expensive watercraft, something valued at over $100,000, you might want to consider a separate marine policy. 

Remember: Honesty is the best policy, and this couldn’t be more true when it comes to insurance coverage. You’ll want to be candid with your provider about these three things to get the best plan:

• How often the cottage is occupied
• How frequently it’s used (weekends throughout the year or just for the summer?)
• If you plan to rent it out

Terms you should familiarise yourself with:

• Named perils policy: Essentially, what’s covered in your policy is hazards or events named on the policy. For residences occupied part-time, this is the most common policy that insurers will offer, as opposed to comprehensive insurance, since there are more risks associated with places that you aren’t checking-up on as frequently.
• Third party liability coverage: This kind of coverage is required for most cottages, even if you don’t plan on renting out. It’ll provide coverage in the case that someone working on your home, either doing general maintenance or even renovations, hurts themselves at your place or if a fire at your cottage causes damage to one of the neighbour’s properties.

What can and can’t be covered at your cottage

There are some things that with part-time occupancy you might have a harder time getting coverage for, that’s just the nature of seasonal and secondary properties. But there are definitely certain assets at your cottage you’ll want to ensure with your provider are covered. 

Here’s a simple breakdown of what you can expect.

Most likely won’t be covered or will require custom plans with your provider

• Vandalism
• Water damage (burst pipes over the winter is a hard one to get coverage for!)
• Sewer backup/sewage related damage claims
• Damage from pests
• Outdoor plants/trees
• Fences and garden equipment

Most likely will (and should) be covered in your cottage policy

• Bunkies, guest houses and outbuildings
• Garages
• Boat houses, woodworking shops, recreational buildings
• Sheds
• Boats and any recreational water vehicles
• Docks and decks
• High-value items that are taken to and from the cottage
• Solar panels

Meet the expert

Insurance broker Greg Roberston, president of R. Robertson Insurance Brokers Ltd., has been heading up his brokerage out of southern Ontario for years, continuing a tradition that was started by his grandfather in 1943. A multi-generational cottager, he describes his family brokerage as having a unique understanding of the policies that cottagers are looking for and thus provides tailored plans for recreational residences, business/commercial lines, commercial marine and home and auto.

Don’t let the price tag lead to a poorer policy: Yes, insurance policies can quickly add to your overall cottage budget. But they’re important and it’s not an area where you want to nickel and dime. 

• “You got to look at the bigger picture and say: This is my asset. And if I have to pay another $150 a year or $200 a year on a $1,500 premium so that I can have certain coverages, you don't want to find out at claim time that you don't have it.”

Focus on your needs: You’ll want to build your policy based on the protection of your assets, and by that same logic, you’ll want to make sure that you’re looking at companies that provide protection for those specific assets.

• “For instance, say you’ve got a provider who offers septic backup but not sewer backup,” Robertson says. “The septic backup provider is cheaper, but your cottage is connected to the sewer system. If you go with the provider who doesn’t cover your needs, i.e. sewer backup, that's a bad decision.” 

Be as detailed as possible: Focus on the coverages and the unique natures of your property, making sure that you disclose exactly what you're using the cottage for. Do you have 100 acres of land? Do you plan to rent? Tell your broker.

• “A lot of people, they fail to tell the insurance company that they're renting, or they fail to tell their insurance companies in detail what's on their property. So I think that's one of the major issues that we run into.”

Be very mindful about how certain components can change your coverage: You might love the smell of wood stove burning as the morning dew dries on the leaves outside your door, but it’s also something “insurance companies get their knickers in a knot about '' cautions Roberston. Those unique qualities of your little abode in the woods can and will change your policy. If you’re looking at a spot that has something like this, something like geothermal heating, make sure to also look at insurance policies around these unique components.

• “I've seen it too many times where an insurance company is not made aware, because the broker didn't know to ask because it's not something they do every day. But make sure that those components are clearly defined so that an insurance company can't come back and say, Oh, we didn't know you had a wood stove in there. Yeah, we're not paying when there's a fire.”

Understand the value of your property: Do your research. Don’t just take your property’s value at the real estate listing price. Look into what reconstruction costs could be associated with your specific joint. For instance, Robertson cites a common example he’s seen with log cottages, particularly when they need replacements. 

• “A broker that's an expert in a cottage understands the value of logs, whereas clients, or brokers that are not experts, they don't understand the difference between round logs with chinking and square logs,” he notes, adding that some kinds of log homes, like a Pioneer Log Home, made of custom cedar logs, “are basically a piece of art”.
• “Understanding the values of these types of things will put you in a position where you're helping make sure that your property is properly insured. And in the event of a total loss, you're not in a situation where you have a shortfall.