A Vacant Land Insurance Guide
Vacant land is a pretty low-maintenance property to own. There aren’t any structures on it, and most of the time you just need to make sure there are no hazards or any other problems that might harm a wandering child or animal. This is true, and while you might not have any electricity or water bills for a vacant property, there are a few things that still apply, like liability insurance.
This is a line item in every budget that requires some consideration because of how costly it can become. Homeowner’s insurance is one of the most expensive parts of owning a property. You might assume that if there are no structures on the property that the land doesn’t require insurance. This is a mistake, and insurance is indeed required for vacant land. Insurance for this kind of property is called vacant land insurance.
What is Considered Vacant Land?
Defining vacant land is an important first step if you want to go ahead with buying vacant land insurance. There are multiple definitions and names depending on whether it is a mortgage lender defining the property or an insurance broker. Additionally, it might be called vacant land, or a vacant lot.
To define vacant land, you must first start by defining the words and different meanings behind vacant land and vacant lot. A vacant lot is the most common kind of structureless area, with millions of Americans purchasing vacant lots every single year. Most vacant lots are meant for development, and typically have an area of less than one acre. Of course, it has to be completely free of any buildings to be considered vacant in the first place. Vacant land and vacant lot both refer to the same thing in this case, regardless of the size of the property.
There are a few elements that might disqualify a piece of land from being considered vacant land. If there is something on the property, even if it is not liveable it might take your property out of the vacant land category. Things like barns, sheds and even docks can disqualify your property from being considered vacant land. Older structures like the ones mentioned can also sometimes make it difficult to get insurance coverage. They are usually unsafe and broken, meaning they are more dangerous than a well-maintained home. Some mortgage lenders may require that you purchase liability coverage for your property, but if you have any of those features on the property, it could become difficult to find insurance for the property at all.
Fortunately, the American Landowner Alliance’s Vacant Land Liability program allows structures such as old barns, seldom used cabins, and/or tool sheds. Although the structures themselves (nor the contents) are not covered, any liability assigned to the landowner from their use is covered in the policy.
Which Vacant Land Will Need Liability Insurance?
Essentially, you should assess any empty piece of land without any structures that might include barns, homes, garages, or even boathouses as vacant land. This is land that is also typically uninhabited as there is no place to live on the property without camping outdoors, and this is a good rule of thumb for defining vacant land.
While most sources aren’t going to tell you clearly when you do and don’t need insurance for your vacant land, thankfully we have the answers for you. Much of your questions may revolve around whether the land is used for hunting, hiking, or any outdoor recreation occasionally. After all, part of the joy of owning land is sharing it with friends and family and having fun doing the things you love. If you have a piece of vacant land but want to use it, then you should be aware of the liability insurance you might need in the case of an accident or problem.
Allowing friends and family on your land to enjoy the space and nature for recreation is a great way to bring everyone together, as long as you have the right coverage in case something doesn’t go as planned.
Liability Insurance and Claims
Although the risk might seem low for a vacant piece of land that is mostly or completely unused. Although it might not be used regularly or just by people you know personally, it is still important to have liability insurance. If someone gets hurt or an accident happens on your land, a claim could lead to tens of thousands of dollars of losses for you or more! To protect against this happening, there are a few things you can do.
Although you might use your vacant land with friends and family, it is also possible that other people might wander onto your land by mistake or even intentionally. This is trespassing and is illegal, but more importantly, those people might have cause to sue for damages if something goes wrong. The best way to protect against this is to protect against trespassers by keeping your property maintained and have your neighbors keep an eye on your land when you are not present.
Putting up a fence and a sign that says “No Trespassing” is often not enough to deter people from walking onto vacant land. Particularly if it seems like there is no one around, people are more likely to enter anyway and take the risk. Now imagine that you are hunting or doing a little bit of target practice on your vacant land when someone wanders onto your property.
If you hit them by mistake or injure them in some way, you could be held liable even though they are trespassing on your property. For this reason and many more, it is important to have liability insurance.
Having someone watch your land, even just occasionally and casually is a good way to prevent issues like this as well. If your neighbor checks on your land every once in a while, then it is more likely they might catch someone who isn’t supposed to be there. Maybe ask them to give you a call.
Doing things like this can prevent problems from happening and avoid the need for liability insurance, but you always have vacant land insurance anyway.
Vacant Land Insurance Policies
Owning vacant land is generally a low-maintenance endeavor, and most people never have an issue. However, vacant land insurance is needed to keep your land safe and your family or yourself safe from any third-party claims, malicious or otherwise.
Vacant land insurance is liability insurance that would match what your homeowner’s insurance does for your house. This liability policy protects you against any accidents or injuries on your vacant land and even protects you from liability if someone damages their property while on your vacant land.
If you do own vacant land, you don’t need to allow hunting to buy a vacant land insurance policy. However, you should always check with your insurance provider to make sure and then move forward with the policy that you need.
Homeowners Insurance vs. Vacant Land Insurance
Sometimes, your homeowner’s insurance may be able to cover your vacant land insurance. How it works is your homeowner’s insurance can be extended to your vacant land so that you can take advantage of the strong coverage and cost savings.
A good rule of thumb in these cases is that if your property is in the same location as where you live, then your homeowner’s insurance should cover the whole tract of land. This is particularly true if your land is directly connected.
However convenient all of this might sound (and it is), it should also be noted that the insurance broker or provider that you got your homeowner’s insurance policy with may not be well-versed in vacant land insurance. While it is tempting to go with the solution that requires less time, often with someone that you already know, it is always best to hire a specialist and a professional in this particular kind of land insurance.
The main issue is that traditional homeowner’s insurance providers typically don’t know as much about outdoor recreation coverages, and this can leave you out of the expert knowledge you need to get the best coverage.
What Will This Cost?
To get vacant land insurance, you won’t have to pay through the nose. Most policies are incredibly affordable, and begin at only $225 for up to 750 acres of vacant land! You can have a massive property and not worry about paying huge sums for vacant land insurance.
$1-2 million policies cover most issues and liability, and even those range from $27 to $50 per month. It should be noted that the cost of your vacant land insurance may vary greatly depending on the type of property and the acreage involved. This means that only an expert like the American Landowner Alliance would be able to give you the most accurate quote for the most comprehensive vacant land insurance policy.
Your Life, Your Land
At the end of the day, this is your land and your decision. However, it’s best to trust experts like the AHLA when making these important life-changing decisions about your favorite tract of land. Keep you and your family protected from liability with a strong policy, and good practices of keeping people off your land, and you will be able to enjoy it for years to come.