There are several different types of holiday cottage insurance, and the selection of a policy depends on a number of factors and the jurisdiction in which the cottage stands. Owners of a vacation or holiday home may be able to add their cottage to their current homeowner's policy, while others may need or choose to procure a separate policy for their vacation home. Some insurers offer special types of holiday cottage insurance that address the particular needs and liabilities of a vacation cabin or cottage while also keeping a policy holder's costs down. Finally, those who rent a vacation home may be covered by their own homeowner's policy while residing in their rental accommodation or may need the additional protection of traveler's insurance.
For many people who own a second home that is used primarily for vacations, a separate holiday cottage insurance policy may not be needed. Instead, the owners may be able to add their second home to their primary homeowner's insurance policy. Typically, the insurance coverage will include both damage to the vacation home as well as liability protection in case a guest injures himself or herself while on the property. In some cases, however, owners may wish to procure a separate, specialized policy. This may be because the cottage does not qualify for standard insurance protection because of its construction or where it is located.
The specialized holiday cottage insurance policies typically offer damage protection that is a bit more limited and specific than standard homeowner's policies. For example, holiday cottage insurance may restrict coverage to certain events, such as a fire, but will not cover sewer backup or damage to outside areas. As many owners of vacation homes regularly lend or rent out their properties to others, there will also be special considerations given to liability when issuing a holiday cottage insurance policy. Cottage owners should speak to their insurance professional about plans to rent out or exchange their vacation home with other people. This is particularly important if the owner has previously not rented out his or her property and already has insurance, as the decision to rent the property may affect current insurance coverage.
Individuals who rent out a vacation home belonging to someone else should likewise check their own insurance coverage. Their own homeowner's insurance policy may cover inadvertent damage caused by themselves and their family members. Another option is to purchase traveler's insurance, which may cover expenses of unavoidable situations where a trip must be canceled at the last minute. Both types of policies are very different, so it may behoove a traveler to speak to an insurance professional before renting a vacation home.