When we hear the word “chalet,” we all think about going up to the chalet—the ultimate summer destination, right on the lake, accessible by winding dirt roads. We went with friends or family, and closed it at the end of the summer. Often, it was built by an older relative who wasn’t bad in construction. Chalet insurance is usually the last thing that comes to mind!
Today, like in many other areas, things have changed. Chalets have multiplied, are closer together, and are more refined. They are now, in some instances, homes that are at least as comfortable as primary residences. How can you insure it all? First, we need to understand what type of chalet you own, and then we can determine what kind of chalet insurance you need.
This is the type of chalet I described above. A relatively isolated chalet, that is more or less well heated, and that is occupied by its owners on a sporadic basis. An insurer will easily provide you with coverage, but it will be limited. If you want to be as prepared for contingencies as possible, through maintenance and foresight, you can fully preserve your chalet. The major risks covered for a seasonal residence are fire and wind damage. Damage due to bursting water pipes is also covered, but keep in mind that 1) such damage must have occurred suddenly and accidentally, and not over a long period, and 2) it is not covered in an unheated building or a heated building that has not been visited for a period of 4 to 7 days. Also note that this type of chalet does not usually have replacement value coverage, and coverage for theft and vandalism is quite costly.
A secondary residence is equivalent to a second insured home. It is a home that can be used during all four seasons, often each weekend, and for good reason: to fit the definition of a second home, the residence must not go unoccupied for more than 30 consecutive days (according to insurers). It must also be accessible year-round by a road on which it is suitable to drive. While these conditions are much more restrictive than those for a seasonal residence, they lead to much greater coverage.
In fact, an insurance policy for a second home generally has similar coverage to an insurance policy for a primary residence.
This is where things get complicated. Most insurance policies do not cover professional activities in residences. The definition of a professional activity is any activity that results in remuneration and is carried out continuously or regularly, including property rental.
As such, you would not be covered if you decided to rent your chalet. Some people choose not to notify their insurer, but needless to say, they would not be covered if a disaster occurs.
If you are in good standing with your insurer, it is possible that it may make an exception—on its terms. You also have the option of going with a specialized insurer—at its rates—or asking for a commercial insurance quote.
Finally, you should know that if you rent your chalet for short periods, the government is watching!
