Your vacation property is your second home or your home away from home, so you need to protect it as you would your primary residence. Many insurance policies, however, treat vacation properties differently, so don’t assume that you’ll automatically get the same coverage for your cottage as your home.
If rent your vacation property you will need landlord’s insurance to protect your investment. There are several kinds of coverage to consider for your rental property.
What you should consider about coverage
You need to think about a few things to figure out what kind of policy terms you’ll need for proper coverage. How much time do you spend there-summer weekends, a month in the winter, or do you use all-year round? The amount of time you spend at your vacation property will help you to determine how much and what kind of coverage you need exactly.
What plans will typically cover
Most insurance plans will only offer coverage for named perils as opposed to comprehensive coverage, so only spelled out risks will be included such as fire, explosion, or smoke damage.
What policy exclusions should I be aware of?
What plans will typically NOT cover are sewer back-up, damage or loss pertaining to frozen food, fences, gardening equipment, outdoor plants/vegetation or greenery. They also typically don’t cover vandalism or water damage, primarily because the property is only occupied part-time, which increases the risk of something happening and someone not being there to address it quickly enough to stem the damage.
So what do I need to cover?
Insurance for your vacation property is similar to your home policy.
Contents coverage: Some vacation property plans cover a number of items that are permanently at the property up to a certain limit. Anything you regularly bring back home should be covered under your home owner’s policy rather than your secondary home policy. Your insurance broker can help you determine what is covered automatically by your policy and advise you on whether you need additional coverage.
Third-party liability coverage: This is to provide you with legal protection in case something happens on your property. Maybe you’re letting friends use the place, or some uninvited kids in the neighbourhood decide to hang out on your property. You may want to consider whether you intend to rent or loan your property to others. For more information on the unique considerations for landlord’s insurance, talk to your broker.
