Cottage Rental Insurance

Cottage Rental Insurance

Protect your vacation rental property with a comprehensive cottage rental liability insurance policy.

Zensurance - Cottage Rental Property Owner

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Cottage Property Owner

Insurance for cottage rental owners

From Annapolis Valley in Nova Scotia to Muskoka region, the Kawarthas, and Prince Edward County in Ontario to the Gulf Islands and Sunshine Coast in B.C., Canada is cottage country!

These and other popular regions are where Canadians flock to in the summertime to unwind and escape city life and submerge themselves in nature, often by renting a cottage or vacation home. The warmer months present a tremendous business opportunity for cottage property owners to rent their cottages, chalets, lodges, cabins, and summer homes. According to industry-wide statistics, annual revenue in vacation rentals in Canada is expected to reach $2.57 billion in 2023 and climb to $2.62 billion by 2027.

However, for property owners, renting their getaways to guests can pose significant financial risks. That’s because when a property owner rents their cottage or vacation home, it becomes a business. And homeowner’s insurance policies typically exclude coverage for commercial activities, including renting a cottage or seasonal property.

To adequately protect their properties and finances from damages and losses, cottage owners need liability insurance for cottage rentals.

Cottage rental insurance, or vacation rental insurance, provides coverage for property owners who rent out their vacation homes or cottages to guests. It is designed to protect your property and assets and provide liability coverage in case of accidents or damages caused by guests during their stay.

Cottage rental insurance is different from traditional homeowners insurance, which may not provide coverage for short-term rental activities. Property owners renting their cottages or vacation homes should obtain specific cottage rental insurance to protect them adequately against potential risks and losses.

A standard cottage rental insurance policy may include the following coverages:

  • Commercial Property Insurance: Commercial property insurance covers your cottage and its contents, such as furniture and electronics, from damage and loss because of fire, water damage, theft, vandalism, or extreme weather. It also covers expenses for damages caused by a guest to the property or your contents.
  • Business Interruption Insurance: If your cottage is damaged by a covered peril, such as a fire, but the property is uninhabitable until repairs are completed, you may be forced to cancel future guest reservations, resulting in a loss of income. Business interruption insurance can help offset those losses. It pays your overhead costs, including loss of income, mortgage payments, and monthly bills. You must have commercial property insurance to purchase business interruption coverage.
  • Commercial General Liability (CGL) Insurance: CGL, also called general liability, protects you from third-party bodily injury or property damage claims. For instance, if one of your guests trips, falls, and is injured while climbing the steps to the front entrance of your cottage, CGL is designed to pay their medical expenses and provide you with funds to defend yourself in court if you are sued.
  • Cyber Liability Insurance: Whether you use a home-sharing platform to rent your vacation digs or not, if you collect your guests’ information and payments digitally, it’s your responsibility to keep their confidential data safe. Cyber liability insurance covers the cost of damages if you suffer a cyber-attack or data breach that exposes your guests’ information. It’s designed to pay repair and restoration costs to your software and cover legal expenses, notification fees, crisis management services, and credit monitoring for your affected guests.

You may require additional coverages depending on your property and the amenities you provide. For example, if you include recreational equipment or a boat for guests to use, you may need to protect yourself from liabilities by allowing your visitors to use those items. Speak to a Zensurance broker if you have questions about the coverage your cottage rental property needs.

Insurance providers determine the price of your cottage rental property policy based on several factors, including:

  • The location of the property
  • The size, age, and construction type of the cottage
  • The type of heating and plumbing at the property
  • Whether the property is seasonal or a secondary property
  • Who you rent your cottage to, and how often
  • What the replacement cost of the cottage is if destroyed by fire, flood, or a natural disaster
  • Your annual and gross cottage rental revenue
  • Your insurance claim history

Getting insured is quick and easy!

Complete our 5-minute online application for a free cottage rental property insurance quote.

Common claims scenarios

house fire

Problem: A guest accidentally ignites a fire while using the stove in your cottage, significantly damaging the kitchen.

Outcome: Your commercial property insurance may pay to repair the damages to your kitchen and appliances.

guests renting a cottage

Problem: One of your guests slips and falls on a wet floor, suing you for damages.

Outcome: Your commercial general liability insurance may pay their medical expenses, your legal costs, and any damages awarded to the guest.

damaged cottage roof

Problem: A wind storm damages the roof of your cottage, inflicting significant damage. The repairs to the building will take up to two months to complete.

Outcome: Your commercial property insurance may pay the cost to repair the damaged roof, and your business interruption insurance may cover your loss of rental income while repairs are underway.

Frequently asked questions

Do I need cottage rental insurance if I only rent my property occasionally?

Yes. Even if you only rent your property occasionally, you need cottage rental insurance. Standard homeowner’s insurance policies typically do not cover commercial activities such as renting out a property and may exclude coverage for damages or liability claims arising from rental activities.

Does cottage rental insurance cover damage caused by a guest’s pet?

It depends. The coverage for damage caused by pets can vary depending on the policy and insurance provider. For example, some cottage rental insurance policies may exclude coverage for pet-related damages. In contrast, others may offer limited coverage or require an additional endorsement or rider to cover pet-related risks.

Can I cancel my cottage rental insurance policy if I no longer rent my property?

Yes. You can cancel your cottage rental insurance policy if you no longer rent your property. However, if a claim arises after the policy has been cancelled, there will be no coverage for that loss. Additionally, some insurance providers may charge a cancellation fee or require a notice period before cancelling the policy. Speak to a Zensurance broker if you have questions.

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Ready to start? Let’s get a quote!

Get the cottage rental insurance policy you need quickly and easily through Zensurance.

Fill out our online application for a free quote. Our friendly brokers will shop our partner network of over 50 insurance providers to get the low-cost policy you need.