Why is Cottage Insurance often more expensive than home Insurance?
As a rule, a home insurance policy is comprehensive and will cover all risks, save for exemptions named in the policy. A year-round winterized cottage can be covered as a second home. Seasonal cottages, though, usually have a "named-perils" policy, which will cover only the risks you want covered.
As a result, cottage owners need to consider carefully what to insure themselves against. A top cause of loss? Windstorms. If a tree falls in the forest and no one is there, it may or may not make a sound when it crashes through your cottage roof.
The second major cause of loss is plumbing failure—and the damage can be extensive. If someone forgets to drain the plumbing and a pipe cracks when no one is there, the water will run continuously until the next visit. Theft and vandalism and fire round out the top reasons for cottage insurance claims.
Other key coverages to consider include building collapse by snow load, as well as smoke and animal damage. Cottagers may be more inclined to insure against bears than thieves. Raccoons can often do as much damage as bears, especially if they move in for an entire winter, and you may not be covered for raccoon damage. The bottom line: If you hold a named-perils policy, acquaint yourself with the details of your coverage.
In general, with seasonal cottages, the cost is higher because the risk is greater, and the risk is greater because you're not there. In the city, a broken window will be patched up overnight and replaced in the morning. At the lake, it could remain open to the elements for a week, a month, a winter.
Country damage tends to be more extensive than city damage, especially with fires. City homes are usually close to a hydrant and served by a professional firefighting force. Most cottages are more than 13 km from a fire hall, a distance the insurance industry uses as its standard for calculating premiums.
Another reason cottage insurance costs more is that many people have multiple buildings, from boathouses to bunkies, as well as boats. Most policies will cover all buildings and some boats (those less than 16 feet long or under 10 hp, for example). You can make your policy more affordable by excluding some boats and buildings, but you assume more personal risk. Another, more palatable way to control costs: If your cottage is stocked with hand-me-down kitchenware and garage-sale furniture, don't insure the contents.
