Cottage Coverage – Insuring Your Vacation Home

Ah, Summer! The season of barbeques, beaches, boats…and kicking back at the cottage with a cool beverage. Before heading out for the weekend, be sure to review your insurance coverage to make sure your summer retreat doesn’t turn into a costly headache.

The Basics 

Since your vacation home is not considered your primary residence, the type of coverage you require depends on how you plan to use your second
home. Will you visit on weekends? Or will you live there, full time, for several months? Are you planning on renting it out when you aren’t using it?

Types of coverage available for your vacation residence include:

• Third Party (Personal) Liability – protects you in the event that someone is injured on your property. Liability Coverage will also protect you if a fire
  starts in your vacation home and spreads to other near-by properties.
• Contents Coverage – protects belongings that are kept at the seasonal property year-round. Remember to keep an updated inventory of items kept at your vacation residence and ensure they are written into your policy.
• Replacement Value Coverage – ‘Replacement Value’ refers to the exact cost to replace your home, without deduction or depreciation. Check with your broker to make sure you have ‘Replacement Value Coverage’ as opposed to ‘Actual Value Coverage’ which only covers the current market value of the property; and is typically much less than the cost of rebuilding.

It is important to note that you can have your seasonal residence added to your primary home insurance policy instead of listing it on a second policy. Whether or not this is the best option for you will depend on how you use your vacation home and the type of coverage required.

Is your cottage covered IF…?

Many people believe that the coverage on their primary residence carries over to their vacation home or cottage, but this is not always the case.

Here are some things that are NOT typically covered by your primary home policy, if they occur at a seasonal residence:

• Roof Damage and Collapse
• Break and Enter
• Sewer Back-up
• Outdoor Furniture and Fixtures
• Outdoor Buildings and Structures (Sheds, decks, docks, etc.)
• Renting Your Vacation Home

If any of these scenarios are a cause for concern, talk to your Excalibur broker about a customized coverage solution for your cottage or vacation home.