Insurance Considerations for Renting Out Your Cottage

If you’re renting out your cottage to cover ongoing costs, you should make sure that your insurance is covering this use of your seasonal property. Traditional seasonal property policies do cover renting to others up to 2 weeks annual, or in some cases one month. It depends on the insurance company, and the type of cottage form that you are on. If you are thinking about renting it more than what is included, you must purchase additional but inexpensive rental endorsement to ensure the safety and proper coverage. Again this is dependant on the insurance company.

Why you need cottage rental insurance

If renters damage your property or are injured on your property in a way that incurs liability, your base seasonal property insurance will not cover the costs. Given the potential risk, it just makes sense to get extra coverage to protect yourself.

Conditions for cottage rental insurance

The insurance company we pick for your particular situation will depend on how you want to rent out your cottage. Some companies will allow for one month of rentals, while others will allow you to rent it out for six months, as long as you are using it for the other six months. You don’t need to worry about this, as we’re your broker and will find the right company for your situation.

The only thing that is common to all companies that you should be aware of is that they don’t allow daily rentals. If you are looking at listing your property on Air BnB, we have one insurer that offers coverage for it, but you do need to let us know if you plan on listing with Air BnB as some insurers do not cover it.

If you are looking for more than six months of rentals, or want to rent out under different terms, you would have to apply for a commercial insurance policy, but we’ll let you know if that is necessary when you contact us about it.

Owner involvement with cottage rentals

Again, we’ll find you the right policy based on your situation, but different insurers have different requirements. Some will allow for a rental agency to inspect the property either after each use or once every 60 days, while some will require that the owner is there at the inspection. If you are planning on spending the summer travelling instead of at your cottage, this may be impractical for you, so we’ll make sure you are placed with the right insurer.

One practice that is common to all policies is that a rental contract must be signed for each renter – if you haven’t already put this practice in place, we would recommend that you do so.

What isn’t covered under cottage rental insurance

Most policies have a cap of some sort for vandalism – one of our policies allows for up to $5000 of damage after the deductible. You should ensure that you are covered by getting a security deposit from renters when they book.

There is also no liability coverage for watercraft with these additional endorsements, and you will want this if you have renters using boats, jetskis, or other motorized water toys. Make sure you tell us that this is a requirement and we’ll arrange for it for you.

Costs for cottage rental insurance

The additional insurance for a seasonal property to cover renting it out is actually quite affordable. One of our insurers offers this endorsement for $100 per year. Protect yourself and your property by contacting us today – this insurance is much cheaper than you would think and can save you a world of hassle.