house_damageInsuring your lease land cottage begins with a decision to insure the cottage for your financial interest in the property, usually market value or what it would cost to rebuild it usually referred to the replacement cost or reconstruction cost of the building.

As the market value of recreational properties increase, the importance of insuring your lease land cottage for a limit that reflects the actual cost of rebuilding or partial reconstruction is good advise to protect your lease land investment properly.

Basic Coverage

The basic insurance policy is the Fire & Extended Perils Form.  It protects the building and contents against the perils of Fire, Lightning, Explosion, Smoke, Falling Objects, Impact by Vehicles or Aircraft, Riot, Water Damage, Windstorm or Hail.  Coverage for burglary and vandalism can be added for additional premium.



Public Liability of $1,000,000 minimum is required as part of the insurance condition in your lease land agreement.  Higher liability limits are available for additional premium.

Her Majesty the Queen

An additional condition in the lease land agreement is to include the lessor’s interest in the land represented by Her Majesty the Queen in Right of Canada.  This condition identifies both parties’ legal interest if required to defend a statement of claim or lawsuit by third parties that may be injured while on the premise.

Seasonal Homeowner’s Package

In addition to the perils provided by the basic policy, the Seasonal Homeowners Package provides coverage for additional perils such as: Vandalism, Burglary, Theft, Collapse of the Building due to Snow Load and Damage by Bears.  Broad Form or All Risks coverage is also available.

Replacement Cost coverage is provided for any damage to the cottage under this form on the condition that that the limit of insurance on the cottage reflects its actual rebuilding or reconstruction cost.  Replacement Cost on cottage contents is also available and is included in some packages.

Some insurance companies will offer a reduction in premium of approximately 10% for owners that arrange inspection of their property throughout the winter months such as cottage patrol.

Additional coverage can be added to either policy for various types of watercraft including liability.


Article submitted by              

Michael J. Hills CIP,
CAIB Hills Insurance Saugeen Shores Ltd.
(519) 797 3431