Cottage Insurance

Many people have cottages or trailers for their recreation and relaxation.  To ensure that you can continue to relax, you should ensure that you have proper insurance in place for your situation.

If you have a boat, make sure that you are insured for liability.  Period.  You can’t afford to deal with the lawsuit that will arise from a boating accident.

Pay close attention to your boat insurance.  For example, make sure that everyone who drives the boat has a boater’s licence.  No exceptions unless it is an emergency.  Similarly, if you have a Sea-Doo type watercraft, don’t let people under 16 use it.  Period.  If you don’t follow those rules and there is a situation where you have a claim, and the insurer finds out you have been violating the terms of the policy, you could have your policy cancelled and find yourself uninsured for the claim and uninsurable going forward.

As for the cottage or trailer itself, you need to recognize that many cottage policies do not cover vandalism (or you may have to pay a lot more for it).  If your cottage is more of a traditional “camp”, in that it is furnished with hand-me-downs from friends and family, you might consider whether you need coverage for theft, if you can get it at all.

Be prepared to pay a lot for fire coverage.  If your cottage is water access only, you will pay a LOT for fire coverage, as the local fire department likely does not have fire boats waiting nearby!  Simply put, if those camps burn, they burn down.  I keep about a dozen fire extinguishers at my camp, along with an extra water pump, fire hoses and a fire nozzle.  If I can save part of my camp, I will try.

Cottage policies are often not as comprehensive as home policies.  Some are “all risks”, which means that they cover whatever is not specifically excluded.  Other policies are “named risks”, which means that they only cover the risks specifically named.

Your home policy is usually for “replacement value”, meaning that the insurance company will pay to replace the house and contents, up to the policy limits.  Cottage policies are often “actual cash value”, which means that they only pay what your cottage and contents are actually worth.  So, what is the cottage and contents actually worth?

As for your contents, used furniture, dishes, clothes, etc. are virtually worthless.  Regarding the cottage, the actual cash value of the building is often much less than the replacement value.  Your cottage property might be worth $250,000, but the lot alone might be worth $125,000.  That means that the building is only worth $125,000.  If it costs you twice that to rebuild, then you are underinsured. 

Make sure that you have adequate, replacement cost coverage for the major risks like fire. 

It’s OK not to have vandalism or theft coverage, as long as you are prepared to absorb the loss if one was to occur.  If you are not prepared to do so, you might want to pay the additional premium to get the coverage that you want.

Ian Johncox, Civil Litigation/Employment Lawyer/Mediator

Ian Johncox, Civil Litigation/Employment Lawyer/Mediator

Ian practices in the areas of employment law, occupier liability defence, franchise litigation and contract litigation. Ian is a trained mediator and conducts mediations in a wide range of civil (non-family) cases. His employment law practice includes acting for employers and employees, which gives him a balanced perspective to his clients’ issues.

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