4 factors that impact your seasonal insurance premiums

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You recently purchased your dream cottage on Lake Muskoka, Lake of Bays, or any of the thousands of picturesque lakes in Ontario. You’re now looking forward to relax, sit on the dock, and crack open a cold beverage. But before you do, you start shopping around for insurance quotes to ensure that your property and assets are protected.

As your shopping around for the best quote for your seasonal property insurance, it’s important to understand the key factors that will impact your premiums. Read this helpful list and keep these four factors in mind next time you chat with your insurance broker:

#1 – Proximity to fire services

Not all cottages are located close to a fire service. All things equal, the closer you are to a fire service, the lower your premiums. By fire service, we mean both a fire hydrant and fire station. If we think logically about it, the further away your cottage from a fire service, the longer it will take the fire service to respond, thus more damage can occur in the event of a fire. Insurers will consider this risk and increase your premiums accordingly.

#2 – Heating methods

If you have a four-season cottage, how is it heated in the winter? All things equal, oil heating generally carries a higher insurance premium compared to electric, gas, or propane. The reason being that oil heating can lead to oil leakage.

Also keep in mind, if you have a wood burning stove as your primary heating method, this will also increase your premium, and even has the risk of making your cottage uninsurable given the increased risk of fire. If you do have a wood burning stove, it should be Wood Energy Technology Transfer (WETT) certified.

#3 – Building materials

Generally, log homes are more expensive to insurance compared to cottages built using other material as they are more expensive to repair if damage was to occur.

#4 – Payout type in the event of loss or damage

In the event of a loss or damage, you can choose to be reimbursed for the replacement cost of your cottage (the amount it would cost to completely rebuild your cottage from the ground up) or the actual cash value of your cottage (the market value of the cottage if it wasn’t destroyed). Let’s assume your cottage is completely destroyed and has to be written-off, which type of payout would you prefer?

You should put some thought in whether a replacement cost or actual cash value payout is best for you. This will depend on the type of cottage and its location. Think about a remote cottage located far into the wilderness, far from many services. It may not have a large market value ($100,000) but if it was destroyed, it can cost a lot ($200,000+) in today’s dollars to rebuild given that all the materials must be shipped to the site. In this case, replacement cost would provide more coverage than actual cash value, but this will also increase your premiums. Talk to your licensed insurance broker who can provide advice on how the different payouts will impact your premiums.

Lastly, it is good to idea to have an annual maintenance plan to ensure that your avoid the most common claims (ensure that you drain your pipes during the winter to avoid bursting!). More insurance companies offer discounts to those customers who remain claims-free!

Are you currently shopping for insurance for your seasonal property or summer cottage? Contact a licensed insurance broker who can advise you on the coverage you need!

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