After nearly a decade of ownership, Frank Lechlitner says Ontario’s longer, more intense wildfire seasons have changed the way he thinks about protecting his Lake Nipissing cottage.
His rustic three-bedroom island property is accessible only by boat. “We’ve always understood that a cottage on an island raises unique concerns when it comes to fire and emergency rescue,” says Lechlitner. “There have been times when the smoke is quite heavy from fires not too far away.”
As the province contends with what is shaping up to be its worst wildfire season on record, some cottage owners are taking a closer look at their insurance coverage.
“When you talk ‘wildfire’ from an insurance perspective, it’s just fire — fire is fire,” says Anne Marie Thomas, director of consumer and industry relations at the Insurance Bureau of Canada. “But it’s important for people, particularly in cottage country, to understand their coverage.”
Two cottages may share a lake — and yet be worlds apart when it comes to what it costs to protect them.
Home vs. cottage insurance
Unlike a typical homeowners policy, cottage policies take a highly tailored approach. The risks unique to cottage life — waterfront access, docks, uneven terrain, campfires, boats and visiting guests — mean these properties carry a substantially higher liability exposure than their urban counterparts.
With cottage policies, insurers assess factors like road access, emergency response times, construction materials and occupancy, says Chris Stirling, president and CEO of Stirco Insurance. “Many people assume that if they have insurance, every loss scenario will be covered. But policies contain specific terms, conditions, limits and exclusions that should be reviewed carefully before a loss occurs,” he says.
When you set up your policy, insurers will classify your cottage as either a seasonal or secondary property. They’ll ask about year-round road access, heating systems, occupancy, plumbing and winterization.
“If you use your property strictly as a seasonal residence — it’s summer-only, not winterized, closed up for the winter and has limited road access — insurance is typically written on a named perils policy,” Thomas says. “Meaning you’re only covered for perils specifically listed in the policy, like fire, lightning, wind or hail.”
Basic seasonal policies usually cover those named perils, including smoke and explosions. Using your cottage as a short-term rental can affect your insurance coverage, and some seasonal policies require the property to be occupied only by owners and invited guests.
A secondary home policy offers broader coverage, but requires year-round road access, a primary heat source and regular visits throughout the year, Thomas says.
Where owners discover cottage insurance gaps
One of the biggest surprises after a claim is discovering that features like docks, sheds, boathouses, bunkies and recreational equipment may have separate limits or coverage requirements depending on the policy, says Kristen Gill, a vice-president with TD Insurance.
“The one question I’d encourage every cottage owner to ask is: ‘Does my policy reflect how I actually use my cottage today, including everything on the property that I expect to be protected?’ ” Gill says.
Stirling recommends providing insurers with photo documentation, which can reveal exposures or features that may not come up in verbal discussions or on a standard application.
“For example, they may identify a wood stove in a bunkie, an additional detached structure, a dock that was not previously disclosed or other features that could impact coverage requirements,” he says. “They can also help ensure the property’s layout, characteristics and usage are accurately documented.”
Renovations and new toys also require a quick check-in with your broker. “As cottages evolve over time, owners may add structures, renovate existing buildings or purchase boats and recreational equipment without realizing these changes could affect their insurance needs,” says Stirling. Likewise, moving into a cottage full-time can change your coverage.
Then there’s the hidden threat: smoke damage. “In some cases, smoke, soot, ash and airborne contaminants can make a property temporarily uninhabitable or require significant cleaning and remediation,” Stirling says. “Whether coverage applies, and to what extent, depends on the specific policy wording and the circumstances of the loss.”
The cottage replacement cost trap
For cottage owners, the most financially dangerous assumption of all may be that their coverage is sufficient to rebuild.
Remote locations, island access, debris removal, site prep and transport fees drive up costs. Compounding this, labour and material costs have risen sharply across the province.
For Lechlitner, these costs are top of mind. “Every piece of siding, every two-by-four and every cinder block would have to be barged from the mainland to the island,” he says. “We have $300,000 in insurance. Would that be enough to cover the damage? I have no idea — but I kind of doubt it.”
It’s crucial to consider exactly what it would cost to rebuild your property today. Unlike primary residences, many seasonal homes don’t carry guaranteed replacement cost coverage. If you’re insured only for actual cash value or an outdated property limit based on what you paid to build it years ago, you could be left tens or even hundreds of thousands of dollars short.
Rising climate risks and your wallet
While Ontario’s current wildfires haven’t yet resulted in widespread insured losses, Canada’s extreme weather events are pushing up property insurance rates across the board, Thomas notes.
In Canada, the typical cost for cottage insurance is between $800 and $3,000 per year, according to RBC. As climate risks escalate, what you pay depends on key property details like location and access, the age and condition of plumbing systems, whether you rent it out on short-term platforms and your chosen coverage limits.
Wildfire concerns have yet to cast a shadow over Muskoka’s cottage market, according to realtor Ross Halloran — but climate risk is steadily altering the lens through which owners see their properties.
“Right now, we’re seeing the smoke, the air quality issues and the fire bans, but haven’t yet had the same direct experience with wildfire damage as other areas,” he says. “If wildfires continue moving south, that conversation will change.”
To manage risks, cottage owners should take proactive measures to protect their property. FireSmart Canada offers resources for home assessment, maintenance and renovations — including managing surrounding vegetation, ensuring clear emergency evacuation routes and using fire-resistant building materials.
Lechlitner says he now rarely has traditional campfires, relies on a propane fire table and participates in a local South Bay Cottage group that shares fire equipment in case of an emergency.
Wildfire preparedness is becoming a bigger part of conversations between Canadian insurers and cottage owners, Gill says. “People are asking practical questions about what would happen if their property was affected by fire damage, smoke or evacuation,” she says.
Insurers may now require certain protective measures to be installed before coverage begins or shortly after, Stirling notes. “These can include water-leak detection systems, battery backups for sump pumps, generators, security systems, monitored alarms, heat detectors and regular inspections of wood-burning appliances and chimneys,” he says, adding that many insurers now require initial property inspections.
The best preparation happens long before wildfire smoke arrives. Review your policy annually, keep a cloud-based inventory of photos and receipts, and make sure your coverage reflects what it would cost to rebuild your cottage today.
Despite rising premiums and fire risks, the pull of the lake hasn’t changed for Lechlitner. “It’s the most wonderful place to be in the summer,” he says. “I just hope we never have to test our policy.”
