Tag: insurance

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Cottage Life

Cottage Q&A: Liability insurance for a remote cabin

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Is it possible to get liability insurance only for a remote cabin? My concern is that a guest could get hurt, or when we aren’t there, someone could trespass (and get hurt). We are U.S. citizens, so we can’t add it onto our home policy. We aren’t concerned about fire and theft because we don’t leave anything of big value inside.—John Sterzick, via email

It’s possible. But it may not be easy. (Sorry.) Or cheap. (Double sorry.)

“It’s a challenge to get coverage for standalone liability,” admits Greg Robertson of R. Robertson Insurance Brokers in Toronto. “There are wholesalers that will provide liability only, but the cost could be more than insuring the cabin.”

Wholesale brokers don’t deal directly with the client, they communicate with the client’s broker. “It’s the client’s broker who will approach me for coverage,” says Bev Mitchell, a special risks underwriter—and a wholesaler—with Johnston Meier Insurance Agencies in Maple Ridge, B.C. “As a go-between, I have contracts with companies the broker can’t access.” 

Could installing cameras lower your insurance costs?

You’re probably going to need to shop around. Check with various local brokers who deal with cottage insurance: what’s the cost of insuring your place on a package that includes liability vs. the cost of a standalone liability policy? As an example, Peter Granata of Kennedy Insurance Brokers in North Bay, Ont., says that most premiums for full-coverage policies are between $1,000 and $5,000 per year. The minimum premium for a liability-only policy from one insurer that the brokers sourced was about $1,500 (plus tax) per year. And the maximum? It would be too difficult to ballpark. “I’m unaware of a maximum quote,” says Granata. “Factors such as property acreage and location would play a part in determining the annual premium.” 

Mitchell says that while getting a liability policy via wholesaler is generally very expensive, the fact that your cottage is remote could be a game-changer. “Many insurers either do not want to insure in remote areas or charge an extremely high rate for the building coverage,” says Mitchell. If that’s the case, going the wholesaler route might work out to be the lesser of two expensive evils. Good luck with your search!

This article was originally published in the Winter 2022 issue of Cottage Life.

Got a question for Cottage Q&A? Send it to answers@cottagelife.com.

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Timelines for repairing storm damage bleak as insurance and contractors grapple with surge in requests

Photo by Shutterstock/Paul McKinnon

The insurance industry is still calculating the cost of damage caused by the wind storm that ripped through Ontario on May 21, but adjusters are already saying it will be well over $30 million.

“Based on what we do know, it is a very significant event. This will be considered a catastrophe in insurance terms,” says Rob de Pruis, national director of consumer and industry relations with the Insurance Bureau of Canada (IBC). “An event that has $30 million or more in insured damages is formally tracked as a catastrophe.”

During the storm, tornadoes touched down in London and Uxbridge, winds snapped hydro poles and toppled transmission towers in Ottawa, and trees crashed through roofs in Peterborough. Insurers are working around the clock to process all of their customers’ claims, de Pruis says. But even with the extra effort, it could take weeks before an insurance adjuster is able to look at your claim.

“We’re dealing with not only homes, vehicles, and businesses, but also secondary residences like cottages, as well as aircraft and marine, and all these other areas that can be impacted,” de Pruis says.

Insurance companies have catastrophe response plans in place for major events, such as the May 21 storm. When the plans are implemented, the insurance companies sort their claims into a priority sequence. “People that have significant damage where they can’t live in their property would be put into a higher priority than someone who may have a vehicle that’s dented,” de Pruis says.

Other factors that can delay a claim’s processing is finding a contractor to do the necessary work. Kevin Stairs of Glenwood Construction out of Peterborough says he’s been swamped with calls, but due to project commitments booked before the storm, requests for work on major structural damage are being pushed into 2023. Some projects are being scheduled as far into the future as 2024, he says.

“If you go back even a few years, the Peterborough area had the 407 coming then the housing market started heating up, and then COVID, and catch up due to supply chain issues. So, most good contractors are booking months and months out,” he says.

When he can, Stairs is slotting in smaller projects that take a day or less, such as replacing a window that got broken during the storm. But the lack of availability of local contractors is forcing many people to hire contractors from out of town.

“I would advise anybody that calls us, if we can’t get to them right away, which in most cases we can’t, to do their research on the contractor they’re calling, especially if they’re from out of town,” Stairs says. “Don’t pay a deposit until you’re certain that the person is going to come back and actually perform the work.”

Before you have a contractor start working on your property, make sure you document the damage from the storm for your insurance claim. Once it’s safe to do so, de Pruis suggests taking pictures and videos of the damage and writing out a list of all the damaged and destroyed items.

If you have receipts for any of the damaged items, make sure to collect those for the insurance adjuster. Even if you’ve documented the damaged item with a picture, don’t dispose of it until after the insurance adjuster has had a chance to fully assess your claim. They may want to see the damaged item in person.

Will the storm damage cause my insurance premiums to rise?

Some good news on the insurance front is that the damage from the storm shouldn’t increase your premiums. “Typically, no one single event leads to an automatic increase in insurance premiums. The insurance companies are well prepared and very well capitalized for these events. This is what they do. This is what they’re here for,” de Pruis says.

“The principle of insurance is the premiums of the many are paying for the losses of the few. The more you can spread out that risk over larger areas, the more stable premiums become so that particular communities are not significantly impacted or have significant changes in premiums because of one event.”

Since most insurers are global companies, a storm in Ontario won’t affect premiums. What will affect premiums, de Pruis says, is a steady increase in the frequency and severity of weather events.

“Between 1983 and 2008, the insurance industry was paying out on average about $422 million in severe weather-related losses across the country. Over the past decade, that number has increased to over $2.1 billion on average, annually. That’s more than a four-fold increase in the overall costs of severe weather damage,” de Pruis says.

Most home and recreational property insurance plans will cover severe weather, such as wind damage. But to make sure you’re covered, de Pruis advises reviewing your policy.

“A lot of this conversation is about preparedness. To make sure that people do have some type of a plan. Even something as simple as knowing what phone number to call if you do have a claim,” de Pruis says. “Having that information readily available so you can start the process can be very helpful.”

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Cottage Life

Cottage Q&A: Woodstove inspection alternatives

By Joshua Rainey Photography/Shutterstock

Do you have any suggestions for alternatives to Wood Energy Technology Transfer inspection of woodstoves for areas where qualified WETT inspectors are very hard to get? What do insurance companies suggest for such regions?—Phil Dean, via email

There certainly aren’t any alternative certifications. “WETT is the only program in Canada,” says Zigi Gadomski, the president of Wood Energy Technicians British Columbia. But, since “it’s not a government certification or mandated by the government, an insurance company can use anyone they want.”

They can. But they probably won’t. “All companies that I know of will now only accept a WETT certification on units such as free-standing woodstoves, pellet stoves, and steel fireplace inserts,” says Bob Dixon of Mason Insurance Brokers in Welland, Ont. “It’s just a fact these days.” The folks at the Insurance Bureau of Canada agree.

But everyone gets the problem when it comes to cottages: “Understandably, the more remote a town or area is, the less likely that there might be WETT inspectors available,” says Dixon. Plus, COVID has messed up woodstove inspections the same way that it has messed up every other part of our lives. “I’ve heard that getting an inspection has been tougher due to backups and restrictions.”

We assume that you’re not willing to remove your woodstove. We also assume that you’d like fire insurance. Unfortunately, even if you wanted to, you probably can’t get a property policy that excludes fire losses caused by a wood-burning unit, says Bev Mitchell of Johnston Meier Insurance Agencies Group in Maple Ridge, B.C. “A regular market carrier is not likely to agree to that as an option. As a special risks underwriter, I see a lot of homes and cottages with woodstoves, and if the information provided on the unit indicates that a WETT inspection is required, we will give the client time to deal with the request,” she says. “In the interim, we will approach it with an extremely high deductible—for example, $100,000—to discourage the use of the unit.” But this interim arrangement only works if the woodstove is “auxiliary use only,” says Mitchell—you need a different, approved main heat source, such as a furnace or baseboard heating. 

If it’s strictly remoteness, not inspector availability, that is the issue, consider forking over the cash to bring one to you. (And in case it expands the pool, keep in mind that some home inspectors also have their WETT certification.) 

“I was once approached by a client who owned a private fishing lodge in a very remote area,” says Mitchell. “The main source of heat was a woodstove, and as the only alternative would be to self-insure, the client had to fly in a WETT inspector—at some expense.” 

It’s not outside the realm of possibility that a company would insure you with no inspection. But is that really what you want? “WETT is the most extensive and correct form of inspection,” says Dixon. “This is not just all about the insurance company requirements. This is about the safety of your family and friends. To me, that is always more important.”   

Got a question for Cottage Q&A? Send it to answers@cottagelife.com.

This article was originally published in the May 2022 issue of Cottage Life magazine.

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Cottage Life

How to protect your cottage when renting it out

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When you rent out your cottage, the majority of guests you host will be a breeze. They’re responsible, and they play by the rules. They’re just looking to experience the beauty of cottage country too. But there is a small per cent that can slip through and cause trouble that you may want to protect yourself against.

“There’s the less likely, but big damage scenarios, and, of course, stolen credit cards, fake IDs, and parties,” says Roy Firestein, the CEO of Autohost, a guest screening company for rentals.

“Guests may not respect the person limit on your septic system, which can affect the lake. They may leave garbage out or feed wild animals, drawing them into populated areas. All of that affects your cottage neighbourhood.”

Renting out your cottage isn’t just a matter of handing over the keys. You should have precautions in place to protect against any unforeseen circumstances. Otherwise, you may end up with angry neighbours, bylaw fines, and stricter municipal restrictions around rentals. Here are a few suggestions on how you can be a responsible host:

Buy insurance

Most cottage owners will have some type of homeowner’s insurance to protect their property against acts of God, such as floods, fires, or trees falling on the building. But according to Firestein, if you’re renting your cottage out, that means you’re operating it as a business. A business that requires vacation rental insurance.

It’s a fairly new concept, but Firestein says there are providers out there who are offering specific policies for vacation rentals. These are written as business policies, meaning they cover your cottage’s contents, in case anything is stolen or damaged; they provide commercial business liability, so you’re covered in case one of your guests injures themselves while staying at your cottage; and they offer business income insurance, meaning that if your cottage is hit by some kind of disaster and you can’t rent it out, that loss of income is covered.

If you live at your cottage and are only renting it out on specific dates, it’s also a good idea to look for a vacation rental policy that includes personal liability insurance. That means you’re still covered against any incidents when you’re the one occupying the cottage.     

Vet your guests

When we say vet your guests, we don’t mean pick and choose who you want to host based on their age, ethnicity, or whether they look friendly. Firestein says the key to vetting a guest is looking through their booking information for red flags that could indicate trouble.

“Things you should look out for is relatively simple stuff—verify that the reservation information matches the billing information, and that matches the actual person who walks through the door,” he says.

What Firestein means is look for inconsistencies. If things don’t add up, there’s a chance someone else may be booking for them, meaning you don’t know who you’re hosting.

It’s okay to reach out to the guest and ask for more information. You may want to ask for the names and contact information of everyone who will be staying at your property. This protects you, keeps guest behaviour more accountable, and also will let you know that the guests are sticking to the maximum number of people you allow.

If you really want to drill down and look for signs of a risky reservation, Firestein advises looking at the guest’s booking details. Guests who book within 24 hours of their check-in time could be using a stolen credit card and are trying to use it before it gets cancelled. A one-night booking at your cottage, especially on a weekend, could be a sign of a party. Finally, guests booking a cottage that’s way too big for them—say, a couple booking a five-bedroom property—probably aren’t telling you everything.

These aren’t reasons to immediately cancel the reservation, but Firestein says you should reach out to the guest to gather more information about their plans.

Be transparent

These precautions are designed to protect you and your property, but you want to make sure they’re not scaring off guests. For instance, some property owners use noise sensors or doorbell cameras to monitor their cottages in real time. While this is a legal security measure, most guests don’t take kindly to being surveilled, especially if they’re unaware.

“Rule number one is always make sure that it’s very clear to guests that there are these types of devices on the property before they make the booking. That’s one way to set expectations,” Firestein says. “Because as soon as someone complains to a rental site that there’s a hidden camera, you’ll get blocked.”

To ensure a happy stay, you need to be transparent with your guests. Put any rules or security measures you have upfront in your property’s listing. This serves a dual purpose, Firestein says. Guests will be aware of expectations before they make the booking, plus is should scare off any guest who are looking to cause trouble.

“If the customer is aware that this is part of the process from the beginning, it just seems less suspicious and less awkward when it comes up,” he says.

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Cottage Life

Should you install de-icers at the lake?

By Mary Anne Love/Shutterstock

Ah, the “off-season” at the lake. The peace. The quiet. The wildlife crossing pristine ice—ah, yes, the ice. In 2019, winter ice damage and spring floods left cottagers scrambling to protect and repair shoreline structures. Katie Peet of R & J Machine in Lakefield, Ont., says that they fielded several calls from cottagers looking to install de-icers. “If they have a couple of feet of water, they can put one in to open up ice so it can’t be pushed and piled on the shoreline,” she says. “Some people use a chainsaw to open up the ice, but you may have to do that every day because it freezes over again at night.”

 

Winter is coming

Ice expands as it melts, until it turns to water. Cracks will form in lake ice in response to the different expansion rates caused by warmer temperatures at the top. An ice sheet gets bigger as water flows from underneath up into the cracks and then freezes. With successive freeze-thaw cycles, that ice moves toward shore, shoving up anything in its way—docks, boathouses—in a process called ice-heave or ice-jacking. Spring flooding can also drive thick ice into shoreline structures.

Bottom line Winter ice is a natural fact of cottage life, but, unfortunately, the damage it causes is a standard exclusion to most insurance policies. “People seem not to be aware of that,” says Allison Bryce, with insurance brokerage The Magnes Group. She advises clients to install de-icing systems to protect a shoreline investment that can be worth hundreds of thousands of dollars.

 

Keeping the ice away

A properly installed de-icer will create as small an opening as possible while still keeping structures free of ice. The systems come in two forms: impellers and bubblers. Impeller de-icers, such as the Kasco and Arbrux systems, combine a motor with a propeller enclosed in a cage that is suspended by ropes or a bracket from a dock or float. The angle of the unit can be adjusted, and which size motor you choose depends on the temperature and the depth of the water (you may need more than one device).

Bubbler de-icers, like Canadian Pond’s Thawline linear system, use a compressor on shore to feed air through submerged tubing. Brent Statten, of DeiceAir in Huntsville, Ont., which installs both Kasko and Thawline systems, is a fan of aeration. “It’s like a tailored suit,” he says, “custom fit to snake around docks and open up only the minimum amount of water necessary.” Bubbler systems use less power than impellers, with no electricity in the water or moving parts to get clogged with sticks, debris, or even ice. And bubblers can be left in place all year (as can impellers, but they’re unsightly).

Bottom line Get advice from companies that sell the systems, even if you plan a DIY installation. Often people wait until the last minute to install them, Statten says, rather than planning their site out and taking time with the installation. Do it before it gets cold, he advises, “and obviously before the ice sets in.”

 

This one’s on you

Though not highly regulated by municipalities, de-icers are prohibited on some waterways, such as some administered by Parks Canada. At the very least, bubblers are controversial in cottage country. Chris Collings, a bylaw enforcement officer for the Township of Lake of Bays, Ont., says that he often gets complaints about installations that create open water near snowmobile routes or about hazard lights that bother other property owners. But while your municipality may not control the use of de-icers, Section 263 (1) of Canada’s Criminal Code says,  “Every one who makes or causes to be made an opening in ice…is under a legal duty to guard it in a manner that is adequate to prevent persons from falling in by accident and is adequate to warn them that the opening exists.” If you fail to do that, and a death occurs as a result, you could be charged with manslaughter. But what’s “adequate” is not specified. The experts we consulted recommend marking any opening with signs (in all directions), reflective tape, and flashing amber lights (not red, which could be mistaken for the tail lights of a snowmobile).

Check with your local municipality before installing a system. Even if there isn’t a de-icer regulation, there may be other restrictions. Lake of Bays, for example, has a dark-skies bylaw that requires all outdoor lights to be shielded and facing downward, so flashing lights may be non-compliant. But Collings says you can install a downward-facing spotlight that illuminates a warning sign.

Bottom line As the Criminal Code makes clear, alerting lake users to the dangers of open water is serious business. So channel your inner Scout and be prepared. As Brent Statten says, “No one wants to think that winter is coming, but it does every year.”

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Cottage Life

Cottage Q&A: Buying boat insurance

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I need to insure my powerboat, and my current company will not insure craft over 55 hp. Are there companies that will do this?—Mark Wakefield, Apsley, Ont.

Yes. Some seasonal-home insurers offer boat policies as a separate product. And some companies are marine specialists and insure nothing but boats and PWCs. 

It’s normal for home or seasonal dwelling policies to have limitations with respect to watercraft, says Bev Mitchell, a special risks underwriter with Johnston Meier Insurance Agencies Group in Maple Ridge, B.C. Length and horsepower restrictions are very common. “It makes sense if you think about it,” says Mitchell. “You’re more likely to injure a third party if you run into them in the water with a motorized boat than if you run into them with a kayak.”   

Cottage Q&A: Fire insurance for woodstoves

“A lot of companies will say, ‘No, we’re not going to touch that,’ ” says Jared Chartrand of Northstar Marine Insurance in Barrie, Ont. “They’ll say, ‘We’d be doing you a disservice.’ ” But for a company that deals in boats, it should be no problem. Fifty-five horsepower “is not a lot of horsepower,” says Chartrand. “We’ve insured boats that are 1,000 hp.” 

  Even if you have only small, motorized boats that fall under your cottage policy, it may be worth paying for a stand-alone marine policy—you’ll get more robust coverage. “The primary reason that you take out a policy to cover your cottage is to cover the building and its contents,” says Mitchell. “Not to insure your boat.”

Cottage Q&A: Cameras and reducing insurance costs

This article was originally published in the October 2018 issue of Cottage Life magazine.

Got a question for Cottage Q&A? Send it to answers@cottagelife.com.