Now, many decades later, the homes in town and cottages around the lake have been remodeled, rebuilt and expanded. Many of these properties have been passed down through the family or have grown to be jointly owned by many relatives. As back in the early years families are renting their homes or cottages to visitors on a short term basis.
What does this history lesson have to do with insurance? It's the intro to a scary insurance issue that is hiding just below the surface of Northern Michigan. The insurance polices that these families have to protect their properties actually provides no protection for rental!!
Most homes or cottages in Northern Michigan are protected by a homeowners policy. These insurance contracts are specifically designed for owner occupied homes. In the event of a major claim, such as a fatal fire, the fact that the home is occupied by a short-term renter would most likely negate the policy coverage in full! Not only would there be no coverage to repair or rebuild the home but there would be no liability coverage to protect the owners from a lawsuit over the fatality in their home.
A scenario such as this could destroy an individual family financially, permanently fracture the extended family and end in the loss of and extremely valuable and cherished family asset.
Don't allow your family history to be put in jeopardy. If you ever rent out your home or cottage you need to discuss this fact with your agent immediately and put into place coverage specifically designed to protect your family. Your ancestors had the foresight to put down roots here, be sure this generation has the foresight to strengthen those roots rather then to allow them to disappear.
Author: Andrew Johnson, Frankfort Insurance