When you invest in rural land, you want to think about the fun you’re going to have on that property – whether you purchased it for recreation, as an investment, to enlarge your farm or to serve as your future home-site. But you also need to think about protecting that investment so the right type of vacant land insurance policy is a must have.
Vacant pieces of land may seem like a good investment, but every investment also comes with different types of risk. This is why it is vital to protect your investment with insurance that will minimize your liability. So insuring land that you own would be an important decision.
First, If anything happens on your property, you are responsible for it. If someone has an accident on the land and breaks their leg, you are solely responsible. For example, if there is a hunter that accidentally slips and falls while hunting, you may be sued. If a driver crashes on a tree on your property, you might be sued. This may end up costing you so much more in the long run, which is why it is vital to keep you protected even when there are no structures built or erected.
Second, there are events that are out of our control such as natural disasters that may put your land and other properties at risk. If your property is not maintained and filled with weeds and grasses, there is a likely chance that a wildfire may occur from a lightning strike due to weather that affects other properties due to the fire, you are held liable.
Basically, your vacant land insurance works as your personal liability protection. It protects you against legal costs that may fall on your shoulder if an accident occurs on the insuring land. When you have vacant land that is used constantly, it is important to check the potential danger on the property and ensure a well maintained area.
Below are some of the basics of insuring vacant land that are important for property owners to understand:
Vacant land insurance protects your land – that’s not leased and has no development or construction activities – from lawsuits with rates as low as $27/mo. The Insurance Information Institute notes the average claim for bodily injury and property damage from 2014 to 2018 was over $26,870. That alone makes this type of coverage essential for all property owners.
Short answer: No. Should you have insurance on land? Yes. Why? Insurance from land isn’t spared from accidents. You’ve heard about wildfires or any other accidents for that matter so insurance on land you own is very important because you still hold responsibility for anything that happens within the premises.
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.
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.
To be clear, though, this would provide 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. Because of 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.
Once the property begins construction of a building, insurance for land will become null and void. The property owner should then apply for another form of insurance for land that is applicable to the property. If they are building a home, they should get a builder’s risk insurance for the duration of the construction process and a standard homeowners insurance policy. If in case they are erecting a commercial building, the owner should purchase separate insurance for the building.
If the land is going to be used for hunting, it is best to purchase insurance for land as hunting poses several risks. When hunting, hunters carry weapons and equipment that are rather dangerous. If a hunting accident occurs in the premise of your property, you may be sued and the legal fees may pile up. Hunters may also bring along guard dogs and they may accidentally bite someone, which can also be another potential liability for the owner.
It is good practice to inform hunters of known dangers on your property, like abandoned wells, marsh/swamp like areas, dangerous equipment and barbed wire fences.
Some hunters may ask to use all-terrain vehicles on your land, and you should realize that you will are taking on additional liability if you allow them to use the vehicles. If an accident happens on your property, there is a good chance you will be held responsible.
Insuring land that contains a body of water such as a pond or lake that is viable for fishing may provide a business opportunity for the owner. There are even owners that charge a fee for fishing on the vacant land. If the path towards the fishing area is slippery, the visitors may slip on the property and become injured. This may lead to another lawsuit filed by the injured parties, which will end up costing you more legal or liability fees than you can handle.
If a car crashes on a tree in your property, you should be prepared for a plateful of lawsuits coming your way. You won’t be charged for legal costs alone, but you might end up paying for their hospital bills, living expenses, and so much more. Insurance on vacant land is a must in these cases.
With nice weather upon us, it can be tempting to open land to recreationists. Even unarmed and on two legs, hikers pose a liability. If you know your land’s terrain is dangerous at parts, you lessen your liability by eliminating the hazard or bringing attention to it. An old, collapsed barn may look enticing to hikers wanting to explore, but it could mean a lawsuit for you when it collapses on the hiker. However, remember that vacant land insurance may not cover structures on your property.
If your land is close to other rural homes or near a town, it’s possible some people will use your land as a public route. Even without your permission and without street signs, you still hold an amount of liability. While you’re not required to make vacant land “safe,” you also can’t do any intentional harm to trespassers. Additionally, you may be responsible for damage trespassers caused if you can’t locate the source. For example, if someone flicks a cigarette, burning down 5 acres of planted pine trees, that’s your loss, but with insurance on vacant land, you could be protected against such damages.
Because it’s a form of liability protection, insuring land covers all of the following costs associated with accident or injury:
Vacant land insurance does not financially protect you against any injuries that were purposefully inflicted, nor will it protect you if a person suffered injuries while working for you. Lastly, because it’s liability, insurance for land does not protect you, your spouse, or any of your dependents from personal injury.
Vacant land insurance offers a substantial protection for an affordable monthly premium. If you or your friends regularly use your land for outdoor activities, this type of insurance can offer an extra layer of protection against unforeseen medical or legal costs. In the event of an unfortunate accident or injury, those on your property can receive the financial resources to get the best possible care.
Regulating Agency and References
Insurance Information Institute (III)
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