It is Summertime in Northern Michigan, and soon we will be surrounded by more than sunshine and lake days. Traverse City experiences a major surge of visitors, short term rentals, and seasonal homeowners opening up their cottages and vacation properties for the busiest time of the year.
Whether you own a lakefront cabin near Torch Lake, a vacation condo in Traverse City, or a short term rental in Leelanau County, it is important to understand that your insurance needs are very different from those of a traditional primary residence.
Many property owners are surprised to learn that a standard homeowners policy does NOT fully protect them once a property is rented out or left vacant for extended periods of time.
Here are a few important things every Northern Michigan vacation homeowner should know before peak season arrives.
Standard Home Insurance Does Not Cover Short Term Rentals
One of the most common misconceptions is that a standard homeowners policy automatically covers Airbnb or VRBO activity.
It does not.
Once a property is used as a short term rental, insurance companies view the exposure differently because there is increased liability and more frequent guest turnover. Some policies contain exclusions or limitations related to business activity or rental use.
This can create coverage gaps for things like:
- Guest injuries
- Property damage caused by renters
- Theft or vandalism of your personal property
- Loss of rental income after a covered claim
- Liability claims related to docks, watercraft, or recreational equipment
Even occasional rentals during the summer could impact how coverage applies.
Seasonal Homes Face Unique Risks in Northern Michigan
Vacation homes often sit vacant for portions of the year, especially during the winter months. That creates additional risks that many homeowners overlook.
Some of the most common seasonal property claims in Northern Michigan include:
- Frozen pipes
- Ice dam damage
- Wind and storm losses
- Water damage that goes unnoticed for weeks
- Power outages during winter weather
This is why truly vacant properties face different policy restrictions or inspection requirements depending on how long the home is unoccupied.
If your property is seasonal or only used part time, it is important to make sure your policy reflects how the home is actually being used.
Liability Exposure Increases Around the Water
Lakefront living is one of the best parts of Northern Michigan, but it can also create additional liability concerns.
Properties with docks, boats, jet skis, fire pits, hot tubs, or recreational equipment carry higher risks, especially when guests or renters are involved.
Many homeowners are unaware that:
- Certain watercraft may require separate policies
- Umbrella coverage may be recommended
- Liability limits on older policies may no longer be sufficient
As property values and lawsuit settlements continue to rise, reviewing liability protection has become increasingly important for vacation homeowners.
A Quick Insurance Review Can Prevent Costly Surprises
Insurance should evolve as your property usage changes.
If you recently started renting your home, purchased a second property, renovated your cottage, or increased your rental activity, now is a great time to review your coverage before the busiest part of the season begins.
A simple conversation can help ensure you have:
- Proper dwelling coverage
- Appropriate liability protection
- Coverage for short term rental activity
- Protection for detached structures, docks, and recreational items
- The right deductibles and policy endorsements
Northern Michigan properties are unique, and your insurance coverage should reflect that.
Whether you rent your property occasionally or throughout the summer, reviewing your coverage before peak season can help prevent costly surprises later.
As always, we are your family owned local insurance agency that is here to help. Don’t hesitate to reach out if we can assist you with your home insurance needs.
Cardinal Insurance Group Trusted Guidance. Personalized Service Written by Linda M. Fisher, AAI, CIC, CPRIA, CPRM, LIC, Agency Founder & Owner