If you are looking for answers to insurance questions for your Muskoka cottage, the best place to start is at a local insurance brokerage. We talked to Lori McCormack at AW Shier Insurance Brokers, now part of the Stan Darling Insurance group. Here are some answers to a few of the most common questions and concerns about waterfront cottage insurance:
Q/ Does it matter if the cottage is occupied year round or only seasonally (May-Oct)?
A/ Cottages that are used year round may qualify for a better price and more coverages than a cottage that is closed up for the winter. A cottage that sits unoccupied for several months is considered to be a higher risk for a loss that may go unnoticed for a longer period of time, which can increase the cost of repairs.
For example, a tree comes down on a cottage causing the interior of the cottage to be open to the elements. The cost to repair would be significantly higher if the loss was not discovered for several months. If you change the occupancy from seasonal to year round or vice versa it is important to advise your insurance broker.
Q/ Why is the distance from the cottage to the closest fire hall important?
A/ Most cottages do not have access to fire hydrants for the fire department to use in the case of a fire. The fire departments in cottage country are typically volunteer based and the distance to the fire hall will determine a rate category for the cottage, either fire hall protected or unprotected. The fire hall distances may vary across companies but typically higher rates are used for properties that are located over 13km from a fire hall, water access only/island, or properties that cannot be accessed during the winter months due to unploughed roads/laneways. Your property may be within the required distance to be rated fire hall protected but if your cottage road or laneway is not accessible during the winter months it will be considered an unprotected property for rating purposes, which means higher rates.
Q/ Why is my cottage insurance more expensive than the insurance for my home in the city?
A/ Here are a few factors that contribute to higher insurance rates for cottages:
The response time for fires is longer in cottage country due to volunteer based fire halls, rural roads, and larger territories. Typically, in cottage country, upon arriving at a fire, the responding fire department attempts to contain the fire from spreading to neighboring properties since the property damage is usually quite extensive. To the insurance company this means a fire at a cottage is usually a total loss.
Cottages are not occupied full time. Variable occupancy is viewed by insurance companies as a higher risk for certain claims such as break-ins, vandalism, and damage caused by animals entering the dwelling.
Q/ Am I covered if I rent out my cottage?
A/ Some insurance companies will not allow rentals, other insurance companies allow rentals with some stipulations. When you rent your cottage you are not only exposing your property to additional risk of loss or damage, you are also exposing yourself to potential expensive lawsuits. For example, you rent your cottage to a family and during the rental a member of their family sustains a permanent disability. If your insurance company was not aware of the cottage rentals, they may deny coverage which means that you would have to hire a lawyer to defend the lawsuit and potentially pay for a settlement as determined by the courts. Talk to your insurance broker about renting your cottage before you start renting. AW Shier Insurance and Stan Darling Insurance offer several cottage insurance packages that allow cottage rentals as well as a commercial package for property owners that are purchasing a cottage for the main purpose of generating rental income.
Q/ Are there optional coverages for cottages that I should consider?
A/ Yes, here are a few optional coverages that you should consider adding to your policy if you don’t already have them:
Vandalism, theft, and burglary – Some basic seasonal cottage packages do not include these coverages.
Building collapse – Providing coverage should the buildings on your property collapse due to the weight of snow.
Bears – Should one of these get into your cottage the damage can be extensive. Not all cottages policies automatically cover you for this type of claim.
Sewer Backup – Covers loss or damage caused by the sudden and accidental escape of sewage or water which enters your dwelling from:
(1) Sewer or septic system on your premises
(2) Drain, or sump pump located within your dwelling
Overland Water – Covers loss or damage caused directly or indirectly by overland water including sewer backup damage resulting from overland water. Overland water is defined as water that accumulates upon or submerges land which is usually dry resulting from:
(1) Unusual and rapid accumulation or runoff of surface waters from any source, including torrential rainfall
(2) The rising or breaking out or the overflow of any body of fresh water
Q/ Do you have any tips for preventing a claim at the cottage?
A/ Yes, we do.
(1) Install a monitored alarm system for theft, vandalism, and also changes in temperature and water pressure. Most insurance companies offer a discount for monitored alarm systems which may offset the cost.
(2) Hire a qualified contractor to check on your cottage regularly when it is left unoccupied. An interior and exterior perimeter check is a good idea.
(3) Install a generator for the sump pump and other necessary appliances for potential power outages
(4) Keep eavestroughs clean & install downspouts to direct water away from the foundation
5) Have wood stoves/fireplaces & chimneys checked and cleaned by a WETT certified contractor annually
6) Drain your pipes and water system when you are going to be away from the cottage for more than a few days during the heating season. If your heat source fails you, your pipes will freeze and split causing thousands of dollars in uninsured damage to your cottage.
Whenever I am asked to give one good piece of advice I always tell people, “Talk to your broker, be honest, and don’t leave anything out. As a broker, I can’t help you if I don’t have all the information.” Insurance brokers can find the best company to fit your insurance needs, and explain the coverages, exclusions, and conditions of your policy.
Thank you to Lori McCormack and the brokers at AW Shier Insurance and Stan Darling Insurance for their contributions to this article.
Stan Darling Insurance has offices in Sundridge & Burk’s Falls and affiliates in Bracebridge & Gravenhurst : www.standarlinginsurance.com
Sundridge Office: 1-800-267-8427 or 705-384-5361
Burk’s Falls Office: 1-800-267-1904 or 705-382-2902 AW Shier Insurance Brokers www.awshier.com
Bracebridge Office: 1-800-387-4437 or 705-645-8701 Gidley & Associates Insurance Brokers www.gidleyinsurance.com
Gravenhurst Office: 1-888-572-1996 or 705-687-7233