Insurance is like a seat belt, you don’t really appreciate it until it saves your life, and then you’re really glad you have it.  Like most people, I tend not to read my policy’s fine print until it’s time for renewal, or I need to make a claim.  But after last weekend, I realized it was time to go back and take a closer look.

Why?  The housing boom, and all the increased construction costs associated with it, have resulted in higher materials and labour costs.  While we are not planning on building a new cottage any time soon, if we had to replace our existing cabin, our current policy would build us a nice new boat house, but we’d be sleeping in a tent.  It is important to make sure your policy reflects the current market conditions, and you are not left out in the cold.

Another reason to check you policy is liability or third party coverage.  Last year we had a friend crack three ribs while riding on our inner tube.  Arguably, if he’d listen to his four and six year old children, and hung onto the handles rather than straddling the inner tube’s side, he might not have injured himself.  Risk of injury is greater at the lake, especially where power boats and novices are concerned.

Amanda Parsons, an insurance representative with The Personal Insurance Company, states that one million dollars is the standard amount of liability insurance that most people carry.  “It’s very rare to go above two million dollars; this is not the states, people cannot sue the way they can in the US,” she declared.  But is a million dollars really enough?

I decided to seek outside counsel.  Dave Smart, a Vancouver lawyer who specializes in litigation, recommends the more insurance you have the better.  “It’s amazing how many people cheat and scrimp when it comes to their insurance,” Smart contends.  “It tends to be pretty cheap when you weigh the cost versus benefit,” adding,  “The chance of a catastrophic event happening at the cabin is rare,” but he continues, “A permanent disability injury for a young person, where they suffer loss of income or require permanent care, will result in a settlement well over a million dollars, there is no upper limit.” 

Accidents can happen anywhere.  When it comes to the cottage, it pays to get the extra coverage.  If you rent out your property, check with your insurer to understand how renting affects your policy.  Some insurers do not provide rental insurance; it becomes a commercial property and requires commercial insurance.

I wish everyone a safe and happy summer, and make sure you’re covered.

Cheers,

Julie 

This entry was posted on Wednesday, June 20th, 2007 at 9:30 am and is filed under Fix It. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.