As Canadians head to their cottages and seasonal properties this summer, the Insurance Bureau of Canada is urging property owners to review their coverage before they go - and the context behind that advice is more pressing than it might appear.
Seasonal and vacation property insurance covers properties used for part of the year, including cottages, cabins, trailers and some recreational vehicles. Because these properties may sit unoccupied for extended periods and are often far from emergency services, they carry higher risk profiles than primary residences. Policies can be structured as a standalone product or as an add-on to a primary home insurance policy, but coverage is typically more limited, often restricted to named perils such as fire, wind, smoke, explosion and some forms of sudden accidental damage.
That restricted coverage scope matters more than ever given what has happened to Canadian weather-related losses in recent years. In 2024, severe weather-related insured losses in Canada reached $8.5 billion, the highest ever recorded, nearly triple the 2023 total and 12 times the annual average of $701 million recorded between 2001 and 2010, according to the Insurance Bureau of Canada and Catastrophe Indices and Quantification Inc.
The single most destructive event was a Calgary hailstorm in August that caused $3 billion in insured losses in just over an hour. Severe weather-related losses exceeded $2.4 billion in 2025, and the IBC has noted that annual costs exceeding $1 billion have now become the norm.
Seasonal properties, often located in lakeside, forested or remote areas with limited access to emergency services, sit directly in the path of the weather events driving those numbers. Frozen pipes, flooding, fire and storm damage are among the most common risks - and among the most common exclusions when properties are left unoccupied without proper winterization or maintenance.
A significant and growing coverage gap has emerged around short-term rentals. The rise of platforms such as Airbnb and VRBO has led large numbers of cottage and cabin owners to list their properties for rental income, often without realizing that their existing policy does not cover commercial activity. Standard home insurance policies in Canada typically do not cover short-term rentals, and insurers generally treat home-sharing as a commercial activity, meaning policies can be voided entirely if rental activity is not disclosed, according to SmartWealth Financial.
According to Statistics Canada data compiled by Zensurance, there were an estimated 204,859 active Airbnb listings in Canada as of early 2025, with total short-term rental units exceeding 350,000, an increase of more than 60% between 2017 and 2023.
A significant proportion of those listings will be seasonal properties whose owners may not have updated their insurance to reflect rental activity. For brokers with cottage and vacation property clients, confirming disclosure and coverage adequacy at renewal is increasingly important work.
Optional coverage for short-term rentals is available from several Canadian insurers as an endorsement, but its existence is not always proactively raised during the placement process, a gap that creates real liability exposure for both policyholders and the brokers who placed their cover.
The IBC guidance identified several factors that shape both the availability and cost of seasonal property coverage: the property's location, distance from emergency services, road access, construction type, age and condition, and heating system. Insurers also consider occupancy frequency, security measures, maintenance history, winterization practices, claims history and deductible level.
That list represents a detailed underwriting conversation that can meaningfully affect both the adequacy of cover and the premium a client pays. Properties in remote areas with poor road access or no nearby fire station can face significantly higher premiums or restricted coverage terms.
The commercial case for getting that conversation right is growing. Seasonal and cottage properties are forecast to be the fastest-growing segment of the Canadian home insurance market, with a projected compound annual growth rate of 4.9% through 2031, driven by climate migration and remote-work flexibility, according to Mordor Intelligence.
That growth trajectory makes the segment one of the more commercially interesting areas of the personal lines market - and one where the gap between what policyholders assume is covered and what policies actually protect remains stubbornly wide.
