What to Know About Cabin Insurance

If you are lucky enough to have a lakeside cottage or a cabin in the woods, you probably worry about it, at least a little, every time you close up for the season. Snowstorms, wildfires, fallen trees, hungry bears or law-breaking humans are just some of the risks to your vacation home when you’re not around.

Cottage or cabin insurance, usually referred to as seasonal home insurance, can provide peace of mind and keep you covered in the event of a natural or man-made disaster. Here we’ll discuss insurance for seasonal homes strictly for personal use, not Airbnb-type rental income properties.

What Is Seasonal Home Insurance?

Seasonal home insurance covers damage or loss to the home’s structure, and — depending on the policy — its contents. It’s only for homes not used year-round.

Baxter Insurance Group agent Bob Thorkelson, based in northern Minnesota’s “cabin country,” explains the distinction. “Maybe it doesn’t have a furnace, or the road to the cabin isn’t plowed in the winter,” he says. It may be unappealing in rainy season, or only used during hunting season. For whatever reason, the cabin or cottage is seasonal. That plays a large role in how your insurance policy coverage and price is determined.

Why Do You Need Seasonal Home Insurance?

If you’re asking if you need seasonal home insurance, you probably do. Here are a few possible reasons:

• Weather-related damage. A vacant, rural cabin is more susceptible to water damage from frozen pipes, fire damage — as we saw in the devastating wildfires in the western U.S. in 2020 — and other weather-related issues.
• Vandalism or theft. An unattended home is a magnet for vandals and thieves, even if there’s not much of value inside.
• Animal intruders. A hungry bear who breaks down the front door can do a lot of damage by the time he’s done.
• Liability. If you invite extended family members or friends to stay with you at the cabin, you’re creating a liability risk should someone be injured on the property.
• Collateral. “If there is a loan or mortgage on the dwelling,” Thorkelson says, “typically an insurance policy covering the seasonal home will be necessary.”

What’s Protected?

Like most homeowner’s policies, your degree of protection depends on how much coverage you opt for or your mortgage lender requires. Generally speaking, your policy will include the cabin (actual or replacement value, see more below) and some, but not all, of its contents.

Here’s what’s usually covered:

• Damage from weather events;
• Damage from vandalism or theft;
• Damage from animal invasions;
• Injury to non-family members occuring on-property.

Here’s what’s usually not covered, unless you add it to your policy:

• Weather-related damage from owner negligence. (You didn’t shut off the gas tank before you closed up the cabin, and the cabin burned down.)
• Vandalism or theft from owner negligence. (You left the cabin unlocked, someone walked in and trashed the place.)
• Animal damage from owner negligence. (You didn’t repair a hole in the roof, raccoons got in and fell through the rafters.)
• Watercraft like canoes and kayaks, plus all-terrain vehicles. These are all big liability risks, so it’s definitely worth mentioning to your agent when you discuss coverage limits.

Types of Cabin Insurance

The level of protection that comes with your cabin insurance, explains Thorkelson, depends if you insure the home at replacement cost (RC) or actual cash value (ACV).

Whether you inherited the property or bought it for a song, an RC policy determines how much it would cost to replace the cabin to its current state. “With RC, a Replacement Cost Estimate will be done on the dwelling,” Thorkelson says. “To be at RC, the home needs to be insured to 100 percent of the replacement cost based on the amount the replacement cost estimator comes in at.”

An ACV policy, however, would depreciate the home (in case of a loss) based on a formula using its age. “So depending on the age of the home, if you have a loss, you may only get 30 percent of what it might cost to replace it,” Thorkelson says. So an ACV policy, though less expensive, might not reimburse you enough to replace the cabin or even make repairs.

Average Cost Ranges of Cabin Insurance

Cabin insurance can cost from a few hundred to a few thousand dollars a year, depending on the coverage. Big factors, Thorkelson says, are the distance to the responding fire department, the age of the dwelling, previous claims and the presence of an alarm system.

Thorkelson says it’s important to describe the property thoroughly to the insurance agent. “Some cabins have no running water, heat or electricity,” he says. “If the cabin doesn’t have any of these, let your agent know, as discounts may be available.”

Also, he says, keep your agent informed when you make improvements. “If you replace a roof, furnace, all electrical or all plumbing, discounts may be available for this as well,” he says.