Vacant Land Insurance - A Complete Guide
Vacant land insurance offers numerous benefits to property owners. Although it may not be a legal requirement for some property owners, it can significantly minimize personal liability and risks. Without it, your property has exposure to potentially costly claims.
Land insurance protects the property you own that does not have any human-made structures. The main benefit of maintaining this coverage is to reduce the risk of bodily injury or property damage claims made against you.
The Insurance Information Institute notes the average claim for bodily injury and property damage is over $26,870. That alone makes this type of coverage essential for all property owners.
In this article:
- How to Buy Vacant Land Insurance
- What Does Vacant Land Insurance Cover?
- Examples of Vacant Land Insurance Coverage
- What Does Vacant Land Insurance NOT Cover?
- How Much Does Vacant Land Insurance Cost
- Is Title Insurance Necessary for Vacant Land?
There are four (4) ways to purchase vacant land insurance. Each offers some specific opportunities for coverage and should have careful consideration by coverage type and cost.
- Include Your Vacant Land in Your Home Insurance Policy
- Buy a Specialty Land Insurance Policy
- Get Hunters Insurance for Hunting Liabilities
- Add Your Vacant Land to an Umbrella Policy
Protecting Vacant Land with your Homeowners Policy
Your homeowners insurance may be the first step. If you already have a home with a home insurance policy, you can contact your insurer to request vacant land coverage. Extending your homeowners insurance coverage is the easiest way to protect a parcel of land.
This provides protection only for vacant property. If you have an unoccupied home that is empty for 60 days or longer, or any kind of human-made structure like a boardwalk to a beach or lake, your insurer would automatically remove some of the insurance coverage you need.
If you have already purchased or void it altogether if it is discovered after you purchased your property, notes the International Risk Management Institute, Inc. For example, if you have inherited real estate with an empty home and land nearby, you may not be able to get a policy to cover both outright.
You must add the land to your declarations page and include all acreages in the policy. If you miss one acre, liability on that piece of land is not covered.
Specialty Vacant Land Insurance
Specialty Vacant land insurance is a separate insurance policy you purchase only to cover your vacant land with no structural properties. You do not need home insurance to obtain this policy.
It could be that plot of land you purchased with the plan of building your dream home in the years to come. It could be a vacant lot left to you from an inheritance. No matter what it is, this coverage tends to be affordable, and there are no deductibles on most policies (although differences apply from one carrier to the next).
Additional Hunting Land Insurance
If you have land that you plan to hunt on or allow others to hunt on, you will need to purchase hunting land insurance. With the increased risks on your property due to firearms or other weapons being in use on the property, your liability risks are much higher.
It is critical to share all risks with hunters if they are using your land, including areas where there are cliffs or higher risk regions. Even with hunting insurance, it is prudent to have them sign a liability waiver freeing you from lawsuits.
Be careful you trust those to whom you give permission, and even with permission, you should walk your land regularly to the extent possible. For example, if a stranger without permission builds a deer stand and is injured falling out of it, you are liable even if you did not know about the stand. Worse yet, the deer stand is considered a structure and could void your policy altogether.
Another opportunity for insuring vacant property is with umbrella insurance. Umbrella insurance is an overarching type of liability insurance that you can add to your homeowners policy or specialty vacant land insurance. It increases your liability coverage amount against claims beyond that which you have in your primary policies. It can be an option for covering vacant land, and you might be able to buy it as a separate policy for your land if you do not have homeowners, auto, or other insurance policies.
Vacant land insurance coverage is a general liability policy that protects vacant land without any human-made structures. It protects you if someone sues you for damage done to their property or if they sustain bodily injury while on your property. It covers:
Property Damage to Someone Else's Property
Vacant land insurance offers coverage for property damage caused to other people's property. If a group of people access the land and start a fire, and that fire spreads to a nearby property and burns another person's home, fence, or other property, the policy can cover that damage.
If a fence on the vacant property topples over and strikes another person's property – such as a car – the policy can cover damage to that vehicle, assuming the person did not hit the fence and cause it to fall.
Bodily Injury to Someone Else
Liability coverage is the most significant component. Specifically, it covers accidents or incidents in which someone else using your property suffers bodily injury. Accidents may occur from:
- All-terrain vehicles
- Swimming (lakes, ponds, rivers)
- Cliff diving
- Kids playing
- Hide and seek
Bodily injury claims are prevalent. A person accessing the property who steps on a broken board with a nail in it, causing extensive injury to the person's foot, may be able to file a claim for that loss. A person walking down a sidewalk on the vacant property who slips and falls due to ice on that sidewalk may file a claim for the damages they suffer.
3. Examples of Vacant Land Insurance Coverage
Hazardous Cliffs and Falling Rocks
Hazards, such as cliffs or areas of falling rock, may apply to bodily injury claims. These hazards may include any type of risk on the property that causes someone else a loss due to a fall or other injury. If a person walking on your property has presumed safety, for any reason, and suffers an injury, they may file a claim against your vacant property insurance.
Trees and Plants
A falling tree branch or poisonous plant can cause injury to others. Vacant land coverage helps minimize those risks.
If a 1,000-year-old tree receives damage in a storm, the vacant property insurance may cover the cost of your loss. Property like this is not typically covered, so such a valuable commodity on the property must be noted on the policy when you purchase it, and it should assign a value to the tree. If you do not add the tree's value to your policy, the insurance company will assess the worth based on relevant factors such as expected value at the time directly before the incident.
All-Terrain Vehicles (ATV)
If you plan to use all-terrain vehicles on the property, that adds additional liability risk. Be sure your policy covers those risks specifically. According to Agmrc.org, there is an increase in the amount of rural public land being considered accessible for public recreational use. But trespassers will trespass, so even though there are many public parks for people, that does not mean you should go without liability coverage.
Generally, landowners are not legally liable for bodily injury or property damage of a trespasser. However, there are many exceptions, and in court, the answer lies with a judge or jury.
There are exceptions when landowners are held responsible, such as:
- Trespassing Hotspots. The land is widely known to have trespassers, e.g., it is the best hunting around, it is a shortcut to a National Park or local swimming hole, or it is great for photos. It is incumbent on the landowner to place hazard and no trespassing signs, which will help in a lawsuit, but signs do not guarantee relief of liability.
- Willful or Wanton Conduct. If you injure a trespasser accidentally while you are skeet shooting, you are liable. If you booby-trap an entrance to your land, you are responsible.
In some states, property owners must provide a warning of no trespassing allowed to be free from liability should a claim occur. A property owner should have such signs or statutes posted on his or her property to limit liability claims whenever possible. However, if such warnings are not displayed, and someone suffers an injury, the landowner is liable, and their vacant property insurance will likely cover the claim.
Arson, Vandalism, or other Intentional Acts
If arson, vandalism, or other intentional acts on a landowner's land are proven to be done by someone else, and that someone else gets hurt or others get hurt, or damage occurs on a neighboring property, as a result, is the landowner responsible? What if someone starts a fire and that fire becomes a blazing wildfire that spreads for miles across homes and city buildings?
In these types of cases, evidence of who is to blame is critical. The vacant property owner's policy may cover damage caused to third parties if the landowner is found liable. If it is not possible to place blame, based on a complete fire investigation, the landowner's insurer may limit claims on the injured party.
Forest and Wildfires
Sorting out the liability related to any forest fire – whether started by another person, an act of God, or a single strike of lightning – is a massive process often undertaken by federal investigators. Should a person's property be considered a higher risk of forest fires or wildfires, he or she may be held liable for the damages caused to others. If such a person is found responsible, the Federal government has statutes allowing them to recover 6-7 times the compensation that a private citizen could recover.
Vacant Land Insurance Excludes:
- Commercial use of land of any sort on which a landowner derives revenue including:
- Land leased to others or considered rental property
- Land used for farming, ranching, or lumbering operations of any type
- Landfills, strip mines, wells, dams, or quarries of any kind
- Acreage limitations. There may be limits on acreage by policy, but it may be specific to properties over 1000 acres or over 25 acres of lakes and ponds
- Land with any kind of human-made structure on the premise, such as:
- A surfaced road. If there is an old road on your property and a trespassing biker gets injured or damages their bike, you are liable
- Chains are blocking roads. If someone on an all-terrain vehicle gets decapitated from the chain, the landowner is responsible
- An old bunker or structure unknown to you. If a child playing falls from a treehouse and is injured, you are liable and your policy voids
- Fences, walls, telephone poles
Some states, like Maine, have statutory relief for landowners, but anyone can still sue, so having insurance is prudent.
Human-Made Structures on Your Vacant Land Will Void your Land Insurance Policy
If your insurer knows about human-made structures on your land, they will not include that land or structure in your land policy, but you can still get insured for your remaining raw vacant land.
If you, or someone else you know or do not know, adds a structure to your land after you have purchased your policy, your policy is void. If you are sued because of an accident involving that structure, you are not covered.
While it may seem obvious, a structure is not limited to an abandoned home or barn. It includes anything on that land, whether it was there when you bought your policy or structures that you or someone added after. Examples of structures include:
- An abandoned home or barn
- Sheds, bridges, boardwalks, or sculpture art
- Chains blocking trails
- Tree forts or hunting pulpits
- Gas, oil, solar or wind energy structures
- An old bunker or structure you did not know about
- Fences, walls, poles, and roads
Some states, like Maine, have statutory relief for landowners, but anyone can still sue, so having insurance is prudent.
Many factors play a role here. These factors include the property's size, location, land risks, the value of the property, and the type of insurance you choose. For example, if you select umbrella insurance, a $1 million policy will cost between $150 and $300 a year. Umbrella insurance is often far less expensive than homeowner insurance.
Yes, it protects the landowner from other claims made against it from previous owners, e.g., unpaid taxes or mortgages, forged documents, custody battles if a spouse claims ownership, and the seller did not disclose a spouse's ownership share, etc. Remember, you bought the land, but you may not have legal rights to it. Title insurance protects you from those harms.
We highly recommend land insurance coverage. As you can see, many circumstances cause a landowner tremendous financial hardship. Land insurance is not expensive on a homeowners policy or as a stand-alone policy. It is certainly worth the spend.
At your service,