What vacationers can overlook when it comes to seasonal insurance
With the May long weekend fast approaching, many Canadians will be packing their bags and heading to the cottage, but a post-pandemic surge in demand may mean lots of cottage rentals and some important coverage spots – such as exclusions for damage caused by renters — can easily go unnoticed.
Following the surge in demand for seasonal properties last year, the rush to book summer vacation homes has increased further in 2022. Vrbo reports on the vacation rental market this summer already exceeds last summer by nearly 15%.
“Some of the most popular summer vacation destinations such as Huntsville and Prince Edward County in Ontario, and Parksville, British Columbia on Vancouver Island, have less than 30% of properties available for booking. for July,” read a Vrbo press release.
“The pandemic has really kind of changed not just the demand, but also the supply of vacation rentals,” says Gavin Brown-Jowett, vice president of personal lines and underwriting transformation at Gore Mutual. “A lot of people are buying new cabins, new seasonal homes. Demand skyrocketed and prices soared.
“A lot of people, even to be able to afford these houses, have to rent them part-time.”
But if a tenant causes damage, the chalet owner may find that this is excluded in their policy.
“Many insurance policies specifically exclude Airbnb and Vrbo, and say no rentals are allowed on a cottage, or there is no coverage,” says Brown-Jowett.
Brown-Jowett says Gore offers seasonal rental coverage for up to 50% of the time the property is open.
However, those looking to buy a cottage outside of Canada may also struggle to find coverage in the wider market, says Brown-Jowett.
“Some carriers don’t want to deal with out-of-province or overseas owners just from a premium collection perspective. There could be issues with board regulators, things of that nature,” he explains.
“We accept that residents from outside the province and the United States can own property in Ontario,” he adds. « Brokers [who] this need comes up quite frequently, and it’s actually something we introduced quite recently to fill a small gap that brokers were saying they had.
Also, as many cottages are left unoccupied for most of the year, theft is an often underestimated danger for cabin owners.
“Some people will leave their electronics, they’ll leave a full bar, they’ll leave valuables in their cabins during the winter months when they’re not visiting,” says Brown-Jowett. “In a lot of these cottage communities, people know it’s cottages and you’ll have rows of five or six houses that have absolutely no supervision.
“It’s very easy for people to break a window, get in and raid the bar or steal your flat screen TV.”
Many cabins are subject to inclement weather or the environmental fallout of heavy storms, which may not be an overlooked hazard, but a hazard nonetheless..
“If you’re not home in the winter months, there are always things like snow load, the weight of the snow on the house could bring down something or trees,” says Brown-Jowett. “Trees are a big factor for many cabin owners where you have trees around your house, you have a big windstorm, one of them is down on the house.”
Water is considered “the new fire” across the country for the most part, but not in cottage country, where fire follows water and flood as number 1 natural hazard.
“You never really want to have this situation where your basement is flooded, or you have water leaks, or your house is burning down, but those are unique perils,” he adds.
Featured image by iStock.com/LesPalenik