Vacant Land Insurance – Do You Need It?

Do You Really Need Vacant Land Insurance? Very!

If you have vacant land it’s important to get it right and that can mean a lot of coverage or policies to make sure you’re adequately protected.

People often assume that their homeowner’s insurance policy will cover any vacant land they may own automatically, but that’s not the case. In each state, vacant land is treated separately and requires separate consideration.

With vacant lots, you must protect yourself from the risks that come with the potential for trespassing from strangers or juvenile delinquents. Intentionally or not, they can cause damage to your property or engage in harmful behavior that could lead to injury. Also, something catastrophic could happen to your property, such as a fire, which could cause damage to adjacent property further extending your liability.

Two Considerations When Securing Vacant Land Insurance

There are two important considerations to keep in mind when obtaining vacant land insurance:

  1. Has the vacant land been financed? Your lender may have special requirements when it comes to insuring your vacant lot. Also, if the land is being held for development or recreational purposes, there may be additional considerations, such as improvements in the ground or storage for equipment or vehicles.
  2. How do you plan to use the land? People buy land for many reasons – the site of a future dream home, hunting or fishing, raising animals like horses or cows, or riding a dirt bike or ATV. Each use may carry different insurance requirements.

What if there is an Empty House on the Property?

If the property you own also has vacant homes, then you may need vacant home and vacant land insurance. Vacant home insurance is specifically designed to cover any structures on your land that are not occupied, but not the land itself or other assets held there, such as boats or recreational vehicles. It may require separate coverage.

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The only exception is if you are in between a sale, the homeowner’s policy must cover the vacant home if it is sold in 60 days or less.

What Type of Insurance Do You Need for Vacant Land?

Since vacant land insurance is usually a direct liability policy, it is often combined with additional coverage to create full coverage coverage. Keep in mind that average bodily injury claims in 2018 over $26,500 per event and growing.

Vacant Land Insurance

Vacant land insurance is really a liability only policy. This type of insurance is insurance that offers coverage for any injuries that may occur on your land, but not for any damage to your property. That covers medical costs as well as legal bills if someone is injured on your property.

This can be a separate policy or can sometimes be added in addition to your landlord’s policy.

Hunting Land Insurance

If you plan to use the land for hunting either for yourself or for others, you will want to purchase a hunting land insurance policy. This type of policy accommodates the increased risk when firearms or weapons are used on the property.

To be very careful, it’s still a good idea to ask visitors to sign a well-crafted waiver before hunting on your property.

Furthermore, you must always maintain good property control. If visitors build hunting blinds without your knowledge, you are still liable if they fall out of it. In fact, the structure itself can cancel your policy.

Umbrella Insurance

You can also add vacant land coverage to an umbrella policy which is a comprehensive coverage that extends the liability coverage of your homeowners policy. Umbrella policies can also be purchased individually.

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What Can Cancel Your Vacant Land Insurance Coverage?

Always make frequent visits to your property to make sure everything is taken care of and the property is safe and well maintained. If you live far away from the property, hire someone to supervise, mow the lawn, remove snow, or whatever else is necessary to keep the property regulated. Both of these situations will negate your insurance coverage:

  1. Someone who lives on the property – ensure that no one lives on the property or has erected (or parked) a temporary or semi-permanent structure on the property. This will invalidate your vacant lot policy even if you don’t know the person or have not given your permission for them to be there. You are expected to have control over the property whether you live nearby or not.
  2. Keep your property safe and free of obstructions. If it is determined that you have an injury claim against your property, but it was caused by negligence or lack of care, your insurance company may cancel your policy.

To be safe, be sure to post warning signs that no infringement is permitted and take pictures of their placement if they are removed without your knowledge.

What Does Vacant Land Insurance Cover?

The following are some of the things that are excluded from the vacant land policy:

  • Commercial use of land, including agriculture, livestock, or lumber operations. It requires commercial grade insurance.
  • Area limitation. If you add additional properties, make sure your new total area doesn’t exceed the allowable limit set by the policy.
  • Every man-made structure from fences to telephone poles to roads.
  • Wells, mines, solar or wind energy structures, or mines.

Is Vacant Land Insurance Worth It?

you bet. This insurance is relatively inexpensive and costs between $150 and $300 per year for a $1 million policy. It deserves peace of mind alone.

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