Are cottagers eligible for property insurance discounts due to COVID-19?

The Victoria Day long weekend has arrived but most cottagers continue to be unclear about whether they can click on their vacation home amid the pandemic. 

In recent months, Ontario Premier Doug Ford has urged cottagers to refrain from visiting their seasonal properties during lockdown, but when a journalist asked him at a recent press conference if cottage owners should still have to pay property taxes if they aren't being allowed to use their properties, Ford replied: “There's only such a long time you can restrain taxpayers from going to their cottages.”

While the home tax debate is not yet been settled, questions about home insurance premiums have also started to appear. If people aren't allowed to visit their cottages, can they expect some financial respite from their home insurance firms?

Concerns from cottagers

Connor Griffiths, who runs the vacation rental management company, Lifty Life, owns two vacation properties in British Columbia – one in Whistler, and also the other in Harrison Hot Springs. His insurance provider actually recently increased his premium at his Whistler property, “to 3 times of the items it used to be. I think insurance in Harrison will also go up,” he says.

He usually rents out both properties but all reservations have been cancelled due to COVID-19. “We are looking into options where we can reduce [on coverages],” he states, and it is still in talks with his home insurance provider to lessen premium costs given the pandemic.

Marcus Anwar, the co-founder of OhMy.ca, lives in London, Ont. and owns a riverfront getaway in Amherstburg, Ont., which he intentions of using once the restrictions are lifted. “We received a letter stating we've got a discount on our premium for the auto insurance since we are not commuting as much,” says Anwar. “Our premium on our vacation home ought to be reduced if we are not going to be using it this summer.”

Can cottagers get a discount on their home insurance right now?

“No,” says  Elektra Hilton, Director of Operations at HUB Customer Central. “However, insurance companies are offering relief by deferring payments when/if necessary.” She suggests contacting your insurance company if you require payment adjustments. But beware that deferral doesn't mean forgiveness.

“The insurance payment deferral moves exactly the same payment to a future date, likely increasing future payments,” says Hilton. “This option must only be looked at if absolutely necessary.”

Just because you aren't going to your cottage does not mean there aren't any risks present, so from that perspective, insurers are unlikely to budge.

“If you aren't there for extended periods, it actually boosts the risk that the loss might be more severe,” says Stefan Tirschler, Product and Underwriting Manager at Where you started Insurance. “There's less likelihood of someone being present there to see a problem and stop it from turning into a significant claim, unlike most of your home where you're present constantly.”

That said, for those who book their cottages but they are now unable to do so due to the coronavirus, there might be some discounts available.

“For individuals who rent out their cottages, their house is insured differently,” says Tirschler. “They'll have coverages within their policy specifically for the rental, for example lack of rental income, and extra living expenses. They've already an opportunity to change that if they no more need to carry coverage for loss of income.”

Do you'll still need cottage insurance during COVID-19?  

Despite the pandemic having altered plans for people wanting to use their cottages, paying your home insurance fees are still essential.

“When obtaining cottage insurance, the premium already takes into consideration it's only used seasonally,” explains Hilton. “Whether you use the cottage or not, you want to make sure that your building and any contents are insured for fire, lightning, and explosion.”

“Your cottage continues to be exposed to the same kind of loss,” adds Tirschler. “If you think about a seasonal home, they're often situated in a more province. . . and things like wildfire or windstorm or falling trees, that risk is still there, whether you're visiting the cottage.”

Other methods to reduce cottage insurance costs

The one thing most home insurance experts agree with is you should get in touch with your house insurance carrier to understand more about your options. 

For example, you can improve your deductible, purchase a monitored alarm system to bring your premiums down, or remove business insurance if you're no more renting out your property. Beyond that, just making sure your policy is up to date and reflects the present circumstances could help lower your costs.

“The best way to keep the premiums to a minimum would be to keep the risks to a minimum,” says Tirschler. “There's no harm in calling your home insurance carrier and asking the agent. . . 'is there something that I should learn about this current circumstance?' Things like the sump pump might help lessen the premium with a few providers,” he states. “If steps to reduce wildfires happen to be taken around your cottage's location, that can possess a positive impact on the premium.”

The good news is that it's relatively straightforward to make these changes to your policy. “Many cottagers are calling in to update their policies, and alter their coverages,” says Tirschler. “Or they're doing it on the internet.”