INSURING VACANT PROPERT

[Brushhogger]

What about if the vacant land is held by a subchapter-S corporation. We have vacant land that was added to our homeowner's insurance which cost about $25 per year extra. There are about 137 acres in 3 lots. We transferred this land to the subchapter S corp. which also owns a small office building which is rented out to a professional. We put these 4 properties on one policy last year and paid just under $3,000. The renewal this year is $7,000. The company claims they made a mistake last year and we got a break. The increase was almost entirely due to a change to a per acre cost on the vacant land. There is absolutely no change in the use of the land, mostly woods, some fields which are brushhogged. The land is posted. Any ideas for more reasonable insurance liability coverage for the land?

 

[8561]

I believe most have given very good advice, with the exception of not worrying about it. I have adjusters who work for me who defend baseless liability claims all day (as well as some very legitimate liability claims). Defending a baseless lawsuit is a 5 figure proposition. Insurance will cover it, assuming you have coverage in place. One quick word to those of you with vacant land, be careful of how you define vacant. Vacant is generally termed to be a property without any structure of any kind. Stone walls built 100 years ago are structures, fences are structures, etc. There really is very, very little vacant land in the world.

 

[caddison]

Vacancy pertains to DWELLINGS usually and not so much as land. A dwelling is classified as a domicile suitable for human occupancy. Land is well....land, dirt, etc. I have clients that have hundreds and thousands of acres of land with no dwellings or structures yet they have an exposure to lawsuits. You don't actually insure land, only things that are planted or built on it. Liability on the other hand is to protect your assets and is used in the event you have been proven negligent.

A good example is if you own livestock and a tree is blown over on a fence joining you and a neighbor. Immediately the livestock get out and damage your neighbors field. You in turn make every effort to get the livestock in and fix the fence. Now you have been responsible and made every effort to fix the problem. A claim is filed and the question asked is did you know the fence was damaged? If you answer no then you are not negligent and therefore have no liability. Had you known the fence was down and you left it down and the livestock got out then you have now shown negligence and are liable and your liability coverage will cover you and your negligence.

Find a company and a agent that will insure more than one location or write a policy for liability only on the other location. Most companies will only be interested in the amount of risk there is associated with the property. If there are no structures or unusual risk the amount of exposure is minimal. Usually there is a minimal charge for excess acreage.

 

[RayH]

A law suit would have to be based on negligence. Just owning a piece of land isnt considered negligent. Sure, anyone can sue anyone for anything but if you didnt contribute to their injuries by doing something to the land, it would be a baseless law suit and would never see a courtroom. I think the money that would be spent insuring an unused, unoccupied, unimproved piece of land would be better spent increasing your auto insurance coverage. Oddly enough, if you put a fence up to keep people out, you had better have insurance because if someone falls while climbing that fence and breaks their back, you are liable because you contributed to their injuries. You would probably still win a case but it would open you up to liability and If you have insurance, the chances of being sued go up in proportion to the coverage.
I figured most everyone would disagree with me and error on the safe side, thats fine, but in the real world the fact is that a great, great, great majority of vacant private land is uninsured and thats not because a great, great, great number of property owners are fools, its because the liability is so small that its almost nonexistant. I mean, we all know to carry auto insurance and home owners insurance and renters insurance even boat or RV insurance because thats where the big liability is. Why doesnt everyone know to carry insurance on their unused and unoccupied land? Because its a nonissue.

Obviously this is just an opinion, and not a popular one, and Im sorry if it doesnt match the others.
I think I'll go invest my money in Insurance stock instead of insurance premiums. /forums/images/graemlins/wink.gif

 

[goodoleboy]

I am in the orginal posters same type of situation.
I understand your reasoning for wanting to protect yourself so you can keep your land.

I was told by my insurance company that I was covered on my homeowners insurance.

 

[RayH]

Depending on your policy, your vacant land should be covered the same as your home as long as it is vacant ("nothing on it that god didnt put there"). If you add a structure or improvement, you should contact your insurance company otherwise it may not be covered.

 

[Gatorboy]

<font color="blue"> Anyhow, we're looking for an insurance company that insures vacant property and would appreciate any helpful suggestions. </font>

I suggest not insuring it at all. I can guarantee no one will come along and steal it. Do you have anything valuable on the property that requires insurance?

 

[JDGREEN4ME]

We rent a home in PA and have 5 acres in NY for future vacation/retirement home. As part of the development association's "rules" you had to have insurance on the property. We have a State Farm renter's insurance policy and were told by our agent as long as we do not have any building construction on the property we would be covered for liability in NY. /forums/images/graemlins/smile.gif

 

[Panache]

The Alabama Forest Owners Association offers insurance for members. 1 million liability for 40 cents per acre plus $42 per year in fees. See AFOA insurance . Something similar may be available in your area. Or this may be available if you join AFOA even if you are not in the state?

 

[Highbeam]

True, a lawsuit that shows you are negligent will be likely to deem you liable and take more of your money. Even if the facts and a jury deem that you in no way contributed to the accident you will still need to pay your attorney. 5 figures is what was quoted above. That's a lot to pay for being right.

The original poster had no homewoner's insurance which is what I, and several other posters, use to insure their vacant land holdings. Since he has no protection the poster will get off with no less than a 5 figure attorney fee should someone decide to sue him whether that lawsuit has ANY merit or not.

I take risks on the small things like theft or collision on my lower value vehicles because the worst case is that I lose out on the value of the vehicle. Liability is a huge deal, millions of dollars, you could lose all of your assets because you didn't pay for liability coverage.