Cottages are special places. They’re getaways from daily city hustle and bustle, which you can visit and relax.
But beyond the fishing and the downtime, cottages also pose special insurance risks. Although they’re look like homes, they are quite a different insurance proposition – and many cottage owners are underinsuring their holiday properties.
Ray Faust, cottage program manager at Rice Inc. in Kitchener, Ontario, said oftentimes potential customers will come to him and, when asked, simply do not understand what their former policy even entails.
Search and compare product listings for insurance against Property Damage from specialty market providers here
“The scariest thing we see, when someone calls here and they’re looking for a quote, and I ask them what they currently have for insurance, they have no idea. Like, no idea,” he said. “It’s insured, that’s all they know.”
But cottages are not one-size-fits-all. Some are seasonal homes, some are secondary homes, some are used year round. Some cottages have plumbing and others do not. Some are rental properties.
For some reason, though, many are underinsured, despite how much they might mean to generations of a family.
Faust said people with 1,200-square-foot island cottages have come to him with policies insuring their cottage for $100,000.
“There’s just no way [that’s sufficient],” he explained. “They say, I’m not too worried about it, $100,000 would put up a nice cottage. But they don’t get into things like co-insurance penalties, or even what perils are they covered for.
“I think in some cases [the reason for this] is just incomplete advice. So usually when we have conversations with a client about what’s actually involved, they’re interested in increasing it.”
Claims for cottages are not actually very common, Faust said. You do get the odd case of a bear breaking in and trashing a house, he said, but often for maintenance activities – like roofing – the clients are in a position to cover those costs themselves. However, brokers should be reviewing policies with clients regularly, he said. Because the risks associated with cottages can change often.
“You definitely want to review on a regular basis. If you pick up a small boat, do I need to add that to the policy, or is it automatically covered? What’s the limit if it is stolen or damaged? I’m doing a renovation … if you have a claim during construction, that could be iffy, depending on what the claim is,” he said.
“You need to make sure everything is meeting the conditions of the policy. It’s just a constant contact thing, to make sure everybody is on the same page.”
Related stories:
Closing time – a client checklist to button-up the cottage
Flooded cottage owners ineligible for disaster relief
