How does cottage insurance work in Canada?

By: Michelle Bates on April 30, 2025

This article has been updated from a previous version.

Cottage insurance, or recreational property insurance, is designed to protect your seasonal or secondary home by covering specific risks. It typically protects against ‘named perils’ such as fire, theft, and sudden water damage, while excluding others like gradual wear and tear, frozen pipes, or pest damage.

To tailor the policy to your needs, you can add optional coverages like flood insurance, coverage for detached structures, and extended liability. This is important to keep in mind as cottages, secondary homes, and recreational properties tend to have unique quirks that may differ from your primary home.

Here’s an overview of what is and isn’t covered by seasonal property insurance to help you decide.

What does recreational property insurance cover?

Recreational property insurance policies provide less coverage than a standard home insurance policy because they’re occupied less often. That's why it's common for a cottage to have named perils coverage. That includes specifically named risks like fire, explosion, smoke damage, sudden water damage, falling objects, and theft.

This coverage protects both the structure of your cottage and your belongings inside of it. However, you can choose to add more perils to your coverage list or extend coverage limits for certain items like watercrafts.

All risks or comprehensive coverage is less common for seasonal properties and may not be an option with some insurance providers.

Lastly, the third-party liability coverage on your primary residence extends to your secondary property. This protects you against claims for injuries that occur on your property or damage you may cause to someone else’s property.

What is not covered by seasonal or recreational property insurance?

Most seasonal property insurance policies exclude a range of different perils, including:

Losses caused by a backed-up sewer or septic tank
General wear and tear
Frozen pipes
Damage caused by rodents, animals, and pests
Damage to fences
Food in freezer due to a power outage
Garden equipment
Plants and greenery outside of your cottage
Gradual damage that was neglected
Earthquakes and landslides

Fortunately, many of these exclusions can be addressed with optional coverages. For example, you might consider adding protection for sewer backups, ATVs, snowmobiles, or food spoilage due to power outages. These options can be tailored to your specific needs.

When in doubt, explain to your insurer what you’d like covered or have them list all available add-ons so you can identify any potential gaps in your coverage.

How to set up recreational property or cottage insurance

Before you can fully protect your cottage, there are a few important details you need to share with your insurer.

You can set up this policy by informing your insurer of the following:

What months you occupy the dwelling
Whether you intend to rent it out
How many parties have ownership over the property.

These and other factors can affect your premium and coverage type. Anyone who co-owns the property within your family or social circle must also be listed on the cottage insurance policy to avoid a denied claim.

Aspects like the property’s location, size, age, building materials, features (think hot tubs, wood-burning stoves, and fire pits), and security systems) can all impact what insurance rate you pay and how much coverage is required.

Think about how much insurance you need for your cottage and what you can skip. For example, if you're okay with a policy that doesn't cover vandalism, you can save money.

Use our free online quote tool to estimate your cottage insurance costs.

How do extreme weather events affect cottage insurance?

Extreme weather events like storms, floods, wildfires, and even hail can cause significant damage to cottages, especially when the property is unoccupied for long periods. These events are becoming increasingly common, making it essential to understand how your cottage insurance policy can protect against such risks.

Most cottage insurance policies include coverage for named perils, such as fire, windstorms, and sudden water damage. However, not all weather-related damages are automatically covered.

For example, flood damage caused by rising water levels or overland flooding is typically not included in standard policies but can be added as an optional coverage. Similarly, wildfire and windstorm-related damages are often covered, but landslides or erosion caused by heavy rain may be excluded unless explicitly addressed in your policy.

Optional coverages to consider

To fully protect your cottage from extreme weather, consider adding these coverages:

Overland flood insurance: Protects against damage caused by water entering your cottage due to heavy rain or overflowing rivers and lakes.
Wildfire damage coverage: Ensures your property is covered if a wildfire in the area causes destruction.
Detached structure coverage: Safeguards additional structures like boathouses, gazebos, or storage sheds that might be damaged by storms or other weather events.
Extended contents insurance: Covers personal belongings that might be damaged by fire, flooding, or other weather-related events.

Discuss these options with your insurance provider to cover your property’s unique risks.

When should you opt for a different form of property insurance?

The kind of insurance you need depends on how you use your property. For example, if you can visit your second home throughout the year, you’ll likely need secondary property insurance. But if you only use it for a season or two, seasonal insurance is the better fit.

If you rent out your cottage, even for a short time, you may need a commercial policy instead of regular cottage insurance. This will ensure you have the right liability coverage in place for short- or long- term renters. Failing to disclose a cottage rental can completely void your cottage insurance policy because of misrepresentation.

Also, if your cottage becomes your main primary home, you must report it to your insurer. They will update your policy to reflect this change, which may affect your premium.

In any scenario, the best way to avoid issues is to be upfront with your insurance provider. Share all the details about how you use your property so they can match you with the right coverage and keep your protection active.