Cabin insurance isn’t exactly flying off the shelves. One of the largest challenges cabin owners often face is how to insure their property. Few insurance companies offer standalone policies to cover cabin owners when the structures are not by definition residential units. A local tax assessor will often list cabins as ‘structures’, ‘sheds’, or ‘storage facilities’. This is due to a few obvious reasons from the local perspective and from the insurance company.
But wait, why on earth do you need your property insured anyway? You are liable for pretty much any injury or accident that occurs in your cabin or just your land. Imagine your barren property with a snowmobiler who runs into a tree in the dead of winter. Individuals light cabins place on fire or break in causing damage. You in 99% of cases will not be covered by your insurance policy on your existing home or renters insurance. Cabin insurance is a totally different ball game. With many people opting for alternative lifestyles in tiny houses and vacation properties since saving for home ownership can take time.
Firstly, for those with truly bare-bones cabins, they don’t always have running water, electricity, phone lines, or a toilet. Once someone installs the amenities we’re used to in modern life, then you can bet your tax bill will be reassessed in a big way by your locality if your cabin is up to local housing code.
Secondly, it is hard for insurance companies to price the risk of these properties or locations. From their perspective, cabins are not directly purchased and are many times unlisted. For them, there is rarely enough data to properly assess how much to charge you for your little slice of Americana.
One core means around this issue is to buy liability insurance, often known as “Umbrella Insurance”. Umbrella policies are usually available through large insurers like Geico, StateFarm, and others. They offer protection into the millions of dollars for liabilities that may occur. This can include car accidents incurring personal harm, lawsuits, and more.
This type of policy usually depends on some sort of additional coverage from you. For instance, Gieco requires that you have an auto policy coverage as well so they can ensure they fill the gaps between your auto policy and any other liability.
Vacation Property Insurance
If your cabin is well out of the ‘shack’ classification, there are some policies that will cover your cabin as a vacation property. It may be hard to get coverage in certain instances and some people have reported policies being very high. For the insurance company, this makes sense as a non-primary residence may be more risky to take on. An insurer may not cover due to vacancy restrictions that the insurance company maintains their policies.
Personal Property Insurance
Cabin insurance may also fall into the bucket of Personal Property Insurance. This type of insurance will cover the value of goods put into building a cabin and the items inside of it. This coverage will not necessarily the value of the property were it sold or assessed for tax purposes. For those living well off the grid in their cabin, this may be a simple, yet small-coverage option.
Read The Fine Print
With any policy, and with the strange categorization of cabins and land, there is a serious need to review the policy details. Before committing to something that may not cover the types of incidents you expect, read up. Whether you plan to Airbnb out your place for some cash or even allow weddings on your property, having the correct coverage available is critical.
Things to Check
When owners rent out or allow third parties (family, hunting buddies, etc.) on your property, ensure third parties are covered. Just like driving a car, you may not be able to let third parties ‘take the wheel’ on your property without your presence.
Ensure you have other policies necessary for full coverage. Through Gieco, yours truly was able to secure an umbrella policy fie $129/yr. However, I did not have a car and needed to have a car policy for $49/mo with 0 cars covered. That is a $600/yr asterisk that I was completely unaware of and is more than the yearly taxes on my small property.
Check for notices you need to put up for your due diligence such as ‘No Trespassing’ at the entries and border of your property.
Every situation is different when it comes to cabin insurance so if you have the chance to shop around, do it. Here are a list of large insurers that can cover you in various ways based on your specific situation.
- Gieco’s Umbrella Policy
- Farmer’s Seasonal & Vacation Home Insuarance
- Land insurance (State dependent in the U.S.)
And for those renting out their cabin: