Home insurance with secondary or seasonal property coverage

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Peculiar_Investor
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Home insurance with secondary or seasonal property coverage

Post by Peculiar_Investor »

My parents have their principle residence in Ontario and also own a summer use cottage in Ontario. The cottage is opened on the May long weekend and closed on the Thanksgiving weekend. During the summer my parents spend most of their time at the cottage. The cottage is never rented out. During the winter, we have locals occasionally visit and clear snow of the boathouse roof as necessary. The cottage is very rustic and was built in the 1920's (or possibly earlier). We own a 19' boat that we keep at the cottage and maintain our own separate policy on the boat.

Over the past year my parents have been reviewing their existing insurance policies (Allstate and State Farm) and have been reducing their costs by using a broker and other insurers. So far so good.

The last policy to be reviewed/replaced is a standalone policy for the cottage. Their broker has recommended consolidating the cottage coverage on their home policy. I had never heard of such a thing, so have been researching it and the coverage is called 'seasonal or secondary property'. The Insurance Bureau of Canada covers Recreational Properties and has a brochure, Protecting Your HOME AWAY FROM HOME that covers the high level details.
Insurance Bureau of Canada brochure wrote:You can include your vacation property on your home insurance as a “secondary” or “seasonal” location, or you can insure it separately
Neither gets into too much detail about the pros/cons of consolidated versus stand-alone policies, instead they suggest talking to the broker. Duh! Clearly consolidation should provide some cost savings as things like third-party liability coverage would be shared rather than duplicated on each policy.

Based on the broker's recommendation and from my quick read/review of the materials we are considering consolidating the cottage coverage on the house insurance policy, but I'm left to wonder if there are any significant downsides to this approach. If coverages are separate, then I would assume a claim on one policy wouldn't impact the future rates of the other policy. With consolidated coverage, it isn't clear if this still is the case.

Does anyone have any experience with adding a seasonal or secondary property to their house insurance policy and are there any reasons not to consolidate with this coverage?

Thanks in advance.
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SQRT
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Re: Home insurance with secondary or seasonal property coverage

Post by SQRT »

We insure our cottage together with our condo in Toronto. Not aware of any reason not to do this. By far the biggest risk is the cottage. A wooden structure, far from the nearest fire station, perhaps more subject to water damage, quite isolated, makes for relatively expensive insurance.
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Re: Home insurance with secondary or seasonal property coverage

Post by northbynorthwest »

Can the OP or others advise on what they pay to insure the cottage?
I pay $2,200 a year for half a duplex (with my neighbours we pay $4,400 for the whole building) in a popular resort area. This strikes me as pricy. But my experience with home insurance is rather limited. Existing policy is a legacy from before I inherited the vacation property.
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Re: Home insurance with secondary or seasonal property coverage

Post by SQRT »

northbynorthwest wrote: 01 Oct 2019 01:08 Can the OP or others advise on what they pay to insure the cottage?
I pay $2,200 a year for half a duplex (with my neighbours we pay $4,400 for the whole building) in a popular resort area. This strikes me as pricy. But my experience with home insurance is rather limited. Existing policy is a legacy from before I inherited the vacation property.
Really depends on the type/value/location of the seasonal property. We have a stand-alone wooden cottage, fairly isolated, worth into 7 figures. We pay close to $10k as I recall. Agree this is expensive.
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