What brokers should consider with seasonal properties during COVID

If any of your clients own cottages or seasonal properties with no one living there overnight permanently, you might want to find out if the COVID-19 pandemic has changed the way those properties are used.

Robertson Insurance Brokers Ltd. has clients who live in the United States and in Britain who own cottages in Canada who cannot get into Canada to their properties this summer, president Greg Robertson told Canadian Underwriter Thursday.

“So you have these buildings that are not vacant but unoccupied at a time of year they normally would be occupied. These issues are surfacing and they have to be dealt with,” said Robertson, who was asked whether there are any recent issues affecting seasonal, recreational or vacant properties.

Different insurers have different wordings and definitions when it comes to vacant and unoccupied property, said Robertson. So they have different expectations when they consider a property to be vacant or unoccupied.

For residential property insurers, any time a property is vacant and no one is living there — as opposed to the occupants being away for a weekend or on vacation — there is a greater risk for crime and damage because no one is at the property, said Pete Karageorgos, director of consumer and industry relations for Ontario at the Insurance Bureau of Canada.

“That is a concern and always has been a concern for underwriters,” said Karageorgos.

In the case of a cottage or seasonal property that the owner is not able to use because of the pandemic, this could in some cases constitute a material change in risk, said Robertson.

Whether or not it is a material change in risk depends on the insurer’s policy wording and also what the owner’s plan is.

“Do they have people using the property? We’ve got a few U.S. citizens who have family in Canada and the family are using it and that works perfectly fine. But we have others where nobody is using it and they are going to sit idle for the foreseeable future — six months or 12 months potentially,” said Robertson.  “Those are material changes that should be discussed with the underwriter to make sure that they are aware and see if they can make a concession based on measures that the property owner is taking.”

COVID-19 was declared a pandemic March 11 by the World Health Organizations, resulting in major travel and border-crossing restrictions.

“Most of the companies have been pretty good with COVID, with understanding it is outside the consumer’s ability to get here to use the property,” said Robertson. “For the most part, as long as they are displaying a plan of action to protect the property they are working with them.”

Feature image via iStock.com/benedek