A Guide to Protecting your Cottage & Boats, and Other Georgian Bay Insurance Issues
This information provides advice and guidance on insurance issues related to your cottage and boats for Canadian, US or overseas residents, and insurance coverage for associations. BrokerLink can provide discounts for members of GBA associations and has provided the details below on different products. For Canadian residents, BrokerLink offers preferred discounts on your home and car insurance. The potential savings could exceed your association dues, which includes GBA dues.
Contact BrokerLink for details at: 1.833.998.3798 or visit BrokerLink.ca/GeorgianBay
Insurance can be a very complicated and confusing topic for anyone but when you get into unique situations like ownership of a seasonal property, property in a foreign country, rented properties or properties with multiple owners; you need to work with an insurance expert. GBA has partnered with BrokerLink to offer a group insurance program for its members, that provides insurance options and solutions for the often-unique scenarios that cottage owners may find themselves in when it comes to insurance.
CONTENTS – please click on the item below that you wish to review to go straight to that content:
- Cottage insurance, questions to ask yourself
- Insuring to Value
- Benefits of Bundling Policies
- Insurance for Renting Your Cottage
- Boat Coverage
- Water Damage Coverage
- Local Cottage Association Coverage Questions
1. Cottage insurance, questions to ask yourself
Some cottages are seasonal while others are year-round. Some with plumbing and others without. Every cottage is unique. How do you know if you have the right cottage insurance?
If you have a cottage or are thinking of purchasing a cottage, click the link to learn more about vacation property and cottage insurance. A review of your cottage insurance policy could mean a difference of thousands of dollars should your cottage or other structures be under insured when an insurance loss occurs.
2. Insuring to Value
Your insurance policy is a contract between you and your insurance company. The company will base the premium they charge on several factors including fire protection (the distance in kms from a fire hall), the type of construction of your cottage (brick, wood frame or custom log cabin) and the use of the property (is it rented to others, do you use it every month or is it vacant for many months at a time).
One of the factors that is important to remember is the replacement cost of the structures. To be clear, replacement cost is the actual cost to rebuild your cottage should it be partially or completely destroyed and not the market value of the property. The removal of the debris, the cost of moving all new building materials to and from your property (including the additional cost of barging if it’s an island or water access property) and then the cost of the actual rebuilding of your structure back to its original state are all factors in determining this value. If your policy has an insufficient amount of coverage to cover these costs, you may find yourself in a situation where you are financing a large portion of a claim. In the event of a partial loss, you may be even more severely penalized. There are a few ways of avoiding this situation.
- Always make sure to notify your Insurance Advisor if you have completed any major renovations to your property or if you have built a new structure such as a new boathouse or bunkie. These changes will greatly increase the costs required to rebuild. Failure to notify could result in cancellation of coverage due to a material change in risk or an insufficient amount of coverage.
- Another thing to monitor is the actual value that is stated on the policy. Has it remained unchanged for many years? If so, you should contact your Insurance Advisor to ensure the value is up to date and accurate.
The premium you pay for your policy is directly related to the replacement cost so increasing the amount of coverage may increase the premium but there are several ways to help offset these costs. There are plenty of options that can reduce your premiums. It’s important to speak with your Insurance Advisor to make sure you are receiving all discounts available to you.
3. Benefits of Bundling Policies
When purchasing insurance, it is usually to your benefit to bundle your various policies with the same broker, you may receive discounts and it can be easier only dealing with one broker vs. several different ones. Learn more about bundling your insurance here.
4. Insurance for Renting Your Cottage
Before renting your cottage out, make sure you will be covered by your seasonal property insurance policy. Read on what you need to know before you rent out your cottage here.
5. Boat Coverage
As you take your boat out onto the water, ask yourself, “Do I have the right boat insurance?”. Boat insurance is designed to help protect you, your boat and any passengers against potential risks that you might face. Read more on Boat Insurance.
6. Water Damage Coverage
In the spring water can easily enter your home and cause extensive damage. This can happen when your sewer backs up or when water enters your home from a sudden accumulation of water on the surface of the ground. Typically, this occurs after heavy rains or spring run-off and this could be catastrophic. Do you know if your insurance covers you for either? Learn more by reading what type of water damage is covered by homeowners insurance here.
7. Local Cottage Association Coverage Questions
Each local cottage association is a collection of individuals that are working together; usually as volunteers, to make their seasonal properties a better place. While these intentions are good, there are some liability exposures that should be addressed by insurance coverage. As with most lawsuits, you may not feel you are liable for what you have been accused of, but you may have the need to pay for a legal defense to prove it, and in most cases your liability coverage pays for that defense.
Directors & Officers Coverage
Directors & Officers coverage or D&O as it is often referred to, is coverage for the directors and officers of an entity from suits that may be brought against them personally. For example, if the Association files for a grant and it is determined that the application was inaccurate, the directors responsible could be held liable for damages, such as paying back the grant or offsetting the shortfalls. Another example would be if an insurance policy is purchased with insufficient limits. The directors making the decision on the limit may be held liable should that decision impact a third party.
Commercial General Liability
Commercial General Liability or CGL; as it is commonly known, is intended to cover suit brought against the Association for alleged damages to property or personal injuries to a third party due to the Association’s negligence. If your association owns a dock and someone slips and falls on it, the Association could be sued as a result. If your Association holds BBQs or Regattas, you need to have liability coverage in place as these events are prime situations for injuries to occur. If your Association chooses not to insure, then the Directors and Officers could find themselves being personally responsible for that decision.
Fire Pumps – Association & Private
Due to current changes to the environment, the frequency of large-scale forest fires in Ontario has increased. Other than removing dead trees from your property and making sure there is adequate distance (if possible) between your cottage and the tree line, purchasing a fire pump is a great option. Private fire pumps are relatively inexpensive and can be kept at your property to help fight any fires that may occur. These pumps, especially in remote or island locations, may be the only defense against a small fire turning into a total loss.
While fire pumps on your individual property make a lot of sense, Associations need to be aware of the possible liability exposures to them if they decide to operate community-based pumps. The first step is to always consult your broker to confirm that your policy will cover the operation and ownership of this style of pump by your Association. It is very possible that a claim could arise out of the improper use of the pump or its malfunction. Injuries to the operator, damage to property or lack of performance are all possible outcomes that could lead to a suit.
As with all liability suits, the claimant may not want to sue the Association but they may have financial demands of their own that they can’t meet as a result of their damages and a lawsuit is the only option they have.
Insurance is not a topic that most people enjoy thinking about and often important elements of their coverage are not brought to their attention until a claim has already happened. It is important to ask your insurance advisor questions about your insurance and be confident in the responses that they provide you. BrokerLink is one of Canada’s largest and most reliable insurance brokerages and are familiar with the unique challenges that water access properties can present.
If you would like to discuss your coverage or have your coverage quoted, contact BrokerLink:
Call 1.833.998.3798, or visit BrokerLink.ca/GeorgianBay