I inherited a Lake Muskoka island cottage, but as a resident of Alberta, I cannot find insurance. My parents lived in Toronto and always insured our family cottage as part of their home insurance. My insurance company’s Ontario branch refused to insure island property. I received an expensive quote from another company, but the long list of exclusions rendered it useless. The issue here seems to be that I do not have a full-time residence in Ontario. Any advice for me, short of moving?—Jane Hillard, Calgary, Alta.
Don’t worry, Jane. You won’t have to move to Ontario. Part of the difficulty that you’re facing? A lot of insurance brokers are only licensed to write policies in their own province. The other part, as you discovered, is that many companies are not keen on insuring an island cottage.
“Insurance, fundamentally, is about risk,” says Rob de Pruis, the Insurance Bureau of Canada’s national director of consumer and industry relations. And a remote cottage is risky because it’s far away from emergency services. (And, well, everything else. That’s kind of the point.) “It’s a fortunate thing to inherit an island cottage,” says de Pruis. But, “an insurer may not have an appetite for that risk.”
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A fire at a water-access cottage “is probably going to result in a total loss,” says Tonja Upshall, the manager of the cottage division of R. Robertson Insurance Brokers in Toronto. If it doesn’t, the repair costs will be about 20 per cent more expensive than they would be with a more accessible property. “Any materials would have to be barged over.”
Adding a cottage policy to your home policy may not be realistic in your case. You’re better off keeping your home policy with a company in Alberta and searching for a separate cottage policy with a broker in your cottage area, or with one that specializes in cottage policies. They do exist.
“We insure island cottages in Ontario all the time,” says Upshall. “And we have clients who live in the U.S. and in Europe.” Unfortunately, going this route, especially with an island cottage, will likely be expensive, she admits.
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Who insured the cottage before you inherited it, de Pruis wonders? “You could approach them. You could ask, ‘Is there an option to now insure it in my name?’ ” The fact that your family has a history with the insurer “could yield positive results.” Translation: it could get you what you want.
Good luck! Oh, and welcome to official cottage ownership.
Got a question for Cottage Q&A? Send it to answers@cottagelife.com.
This article was originally published in the September/October 2024 issue of Cottage Life.
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