What is the Importance of Seasonal Property Insurance?

With the summer season right around the corner, you're likely getting ready to clean up your seasonal property. Doing this minimizes the chances of your property or belongings getting damaged over the coming months, which can help you avoid dealing with thousands of dollars worth of repair bills.

However, have you ever wondered what you would do if something happened to your precious vacation home? You're not alone; that's why many Canadians opt for a type of coverage called seasonal property insurance (also known as cottage insurance).

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If you're not familiar with seasonal property coverage, be sure to continue reading.

What is seasonal home insurance?

According to Alison Daniels, the Surex Manager, East Distribution, the definition of a "seasonal property" is, "any dwelling occupied for a portion of the year only and it is not registered as the home address with the Canada Revenue Agency.  In general terms, the place you go to get away from it all!  Your cottage, your cabin in the woods, your retreat."

Seasonal home coverage is a type of insurance that protects vacation homes and secondary properties, (along with the contents of said properties) that you visit or live in part-time.

Seasonal home coverage is not related to your current home or renters insurance policy due to the fact that the properties are separate from each other.

Where can you get seasonal home coverage?

There are several ways that you can obtain seasonal home coverage for your vacation property, but the easiest method is reaching out to one of our insurance advisors online.

Our insurance advisors can provide you with a cornucopia of affordable, personalized quotes from the most respected providers in Canada. Reaching out to an experienced insurance advisor makes it nearly effortless to find the perfect seasonal home insurance policy for your vacation property.

Is seasonal property coverage required by law in Canada?

"No," says Daniels, "there is no law that states any property owner requires insurance.  However, if there is a mortgage on the property, most financers require it to be insured. And as a property owner, best practice is to have insurance to make sure the property, assets and liability interests are protected."

We highly recommend that you purchase some form of seasonal coverage for your vacation property. Doing this will give you peace of mind, as you know that you'll be financially covered if an unforeseen event occurs.

What types of properties qualify for seasonal property coverage?

"Property that is only occupied for a portion of the year, whether that be a few months during the summer, or two or three seasons," states Daniels. "A property where the length of time between visits is greater than every 30 days."

Some common examples of these properties include:

• Cottages
• Cabins
• Hunting shacks
• Lake houses
• Beach homes
• Chalets
• Miscellaneous seasonal properties

This leads to the question, "what types of properties aren't covered by seasonal property insurance?".

Daniels responds, "seasonal properties have almost the same coverages as a homeowners policy.  Standard property policies are broken down into three divisions: comprehensive, broad and named perils.  Most primary home policies are on comprehensive forms — meaning almost every peril is covered." 

"Seasonal properties are typically sold on broad forms, which means all risk coverage on the building, and named perils coverage on the contents.  In other words, less peril coverage for the contents," added Daniels. 

Regarding liability coverage, Daniels noted, "many companies limit the liability coverage for seasonal homes to premises only, whereas a homeowners policy offers worldwide comprehensive personal liability. Other things that are not covered are items that would generally be covered under a main homeowners form.  Items like extended family coverage (seniors in a nursing home), students liability and property away from home, ID theft, cyber, or roomers or boarders coverage,".

What are the different types of seasonal property coverage in Canada?

There are three types of seasonal property coverage that Canadians can use to protect their vacation homes: comprehensive, named perils and optional coverage.

Comprehensive coverage

Comprehensive coverage (also occasionally referred to as all risks coverage) is a type of insurance that covers a wide variety of risks and perils that cause damage to your property. 

Common examples of these incidents include:

• Fire and smoke damage
• Wind
• Ice or hail

It's worth mentioning that comprehensive coverage doesn't just protect the vacation home — it also covers unattached structures and the majority of your belongings.

Most comprehensive seasonal property policies also offer liability insurance, which financially covers the policy owners if they get sued for an injury or death that took place on their property.

Named perils coverage

As the name implies, named perils coverage protects homeowners in the event of an incident that is listed on their policy.

For instance, if your seasonal property coverage policy states that you're covered in the event of a fire, you can expect payment if said incident occurs. But, if your policy doesn't cover fire-related damage, you'll have to pay for the repair bill out of pocket.

Optional coverage

Buying optional coverage gives you the ability to protect your property from risks and perils that aren't listed in standard seasonal coverage policies.

One of the most common examples is overland water coverage, which safeguards property owners from flood-related damage. Overland water coverage is beneficial if your vacation home is near a lake, pond or large river, as you're more likely to experience flooding than someone who has a hunting shack in a remote forest.

With this in mind, you can see why some seasonal property owners may feel the need to purchase additional coverage.

If you're not sure which type of coverage you need for your vacation home, don't hesitate to reach out to your insurance advisor. Your insurance advisor can provide you with essential details about each type of seasonal property coverage they offer. 

However, Daniels urges policyholders to remember that insurance companies offer different coverages in regards to seasonal properties. 

"Some will offer comprehensive coverage — all risk coverage for the building and contents.  Others will only offer a broad form or named perils coverage - broad equalling all risk coverage on the building and named perils on the contents. These two policies will cover everything except a few listed exclusions. A named perils policy is a very basic policy where the perils are listed, and if it's not listed, it's not covered.  Some carriers prefer to only offer this form,".

Why is seasonal property coverage essential for vacation home owners?

Your vacation home is your private slice of paradise. Many Canadian families spend thousands of dollars to ensure that their property remains in good condition. Furthermore, it's not uncommon for seasonal property owners to spend a sizeable amount of cash on upgrades or new gadgets for their vacation homes.

If an unavoidable disaster, like fire or severe windstorm, were to occur, all of the time and money that you've put into your vacation home could go to waste.

Thankfully, if you have the right seasonal property coverage, you don't have to worry about a cottage-sized repair bill falling into your lap.

Are AirBnb and Vrbo included in seasonal property insurance?

"With most carriers these coverages are not automatically included, but some offer endorsements that can be added onto the policy to extend liability and coverage while being rented," state Daniels. "Some insurers will not allow for vacation rentals at all,".

Are seasonal properties expensive to insure in Canada?

This is a common question that Daniels receives.

"Typically," stated Daniels, "vacation homes are less expensive to insure because there is less exposure to risk, as the homes are not occupied as often.  However, pricing is dependent on a number of factors, including location, accessibility, fire protection, coverages and the building value itself. If you were comparing a primary home and a 'seasonal dwelling' that were side by side on the same street with all the same rating factors, the seasonal home would be less to insure."

Tips for finding the right seasonal property coverage for your vacation home

Here's a quick list of tips that can help you find the perfect policy for you:

Use an online insurance advisor to find quotes

As mentioned earlier, using an online insurance advisor is by far the best way to track down the cheapest quotes.

Our advisors can provide you with the best plans from the most respected insurance advisors in the country. This means we can find you a plan that you love, from a name you trust.

Assess the area for risks

Each vacation home is different in some way, shape or form. Some are close to large bodies of water, while others are built near steep cliffs.

The next time you visit your vacation home, take a moment to review your surroundings. Be sure to consider things like:

• Nearby water
• Large hills
• Nearby trees
• The severity of local weather (particularly during the winter)
• Likelihood of forest fire

Be upfront with your advisor

Although you may feel tempted to stretch the truth, you should always be honest with your insurance advisor. Being upfront about any changes or potential issues will help you avoid speed bumps in the event of a severe accident.