What Are The Insurance Requirements Before Renting A Cottage In Summer?

Last year, when COVID 19 first forced us to practice hiding social distances, an overwhelming number of urban dwellers found loneliness in remote cottages. Many first-time homebuyers have learned directly how to insure their homes. Consider renting a villa or cottage and earning additional cash when not in use, as the blockage restrictions have been lifted, the economy has opened and vaccinations are in full swing for the summer of 2022. But how does your insurance cover it? Before discussing the impact of vacation rentals on vacation home insurance, it is important to understand how vacation home insurance differs from traditional home insurance.

Low accessibility and part-time occupancy mean higher cottage insurance premiums

Cottage insurance is usually more expensive than home mortgage insurance for several reasons. Most cottages are located in remote areas that are not easily accessible by firefighters and other emergency response personnel. This means that in the event of a fire, robbery, or other emergencies if emergency services do not arrive at the villa on time, there is an increased likelihood of excessive damage.

In addition, villas can be emptied for extended periods of time each year (depending on usage), increasing the risk of excessive damage as no one notices the damage in time or shortly after it occurs.

To qualify for home insurance, most insurance companies require you to take out home insurance first. In contrast to the fully comprehensive insurance available with home content insurance, home content insurance has only a so-called “named danger” policy. In other words, in order to protect the villa from these unexpected events, you need to list the specific dangers you want to compensate for, such as fire, lightning, smoke damage, vandalism, etc.

However, according to the Canadian Insurance Department, risks such as floods, sewer backwaters and earthquakes are usually not covered by cottage insurance. This has to do with the fact that most cottages are near the water. Therefore, the risk of flooding increases and the cottage is not occupied all year round.

What kind of insurance do I need if I rent a cottage in the summer?

Whether you want to rent a villa for the short or long term, you need to ensure the safety of your guests. If the villa is in a body of water, guests will want to practice water sports. This can lead to unexpected accidents.

Liability insurance for your holiday home insurance should cover any injuries that the tenant may suffer while staying in your property. If you do not have liability insurance for your vacation home insurance, you will need to do so before you can rent it. Even if you do not intend to rent a cottage, it is advisable to take out liability insurance to protect your friends and family in case of an accident during your stay at the cottage.

Cabin insurance covers the property's assets, but RVs such as ATVs, RVs and snowmobiles may not be part of this coverage. If boats or RVs are used by tenants, you may need to take out special insurance to cover them. And this camper insurance is not very popular among major insurance companies. If you rent a villa, your insurance against theft of your property or tenants will also expire. If you mainly rent a cottage, consider taking out landlord insurance instead of cottage insurance.

Landlord insurance provides protection against the dangers of vandalism, theft, fire, smoke, bad weather, your belongings, snowplows, lawnmowers, gardening tools and other equipment. Landlord Insurance also provides liability insurance in the event of accidental injury to you or the tenant of your property. Landlord insurance is expensive and only makes sense if you rent a villa all year round. For seasonal short-term rentals, you can consult your insurance company for short-term landlord insurance or take out additional liability and camper insurance.

How to reduce rental housing insurance premiums?

In addition to taking regular security measures such as installing fire alarms, security cameras, intrusion alarms, and emergency generators, you can reduce the risk of property damage by doing the following:

Keep boats and other RV vehicles away from tenants. In this way, you can avoid having special car insurance.
Buy a first aid kit that the lessor can use in case of minor injuries. If your property is next to a body of water, install a lifebuoy to avoid serious accidents. These life-saving facilities can reduce your liability in the event of an accident with a tenant.
If you plan to rent a villa through a housing company like Airbnb, make sure you offer cheaper insurance than other cottages and landlords.
Shop online to find the best vacation home insurance rates for short-term and long-term rentals.