INSURING VACANT PROPERT

8561 · May 4, 2005

Very well said Highbeam. You are correct.

Caddison - you said as follows: "Vacancy pertains to DWELLINGS usually and not so much as land." I respectfully disagree. In terms of your insurance policy land vacancy has nothing to do with dwelling structures being on the property or not for liability coverage." As a licensed adjuster in several states, I assure you that statement is not true. The following quote is taken from this link: http://www.faia.com/scriptcontent/fa_custom/education/edlibrary/vacantland.cfm
"If the land contains a man-made improvement, be it fencing, rock wall, roadway, pond, dam, or an abandoned building...maybe even a flag pole, its NOT vacant."

This is the Florida Agents Association website, but it's policy analysis applies to standard homeowners policies written in all 50 states. There is a lot of great information including case law quotes on the topic. It's very informative. ALL people who use their homeowners policy to cover liability exposure on vacant land should read this article. It is easy to understand. Be advised that even even something like a man-made pond on an otherwise untouched piece of land makes that tract of land no longer vacant. If the land is not vacant, you likely have no coverage.

I stand by my earlier post that there is very, very little truly vacant land out there. There is at least an old stone wall or a gate or something on just about every piece of property.

caddison · May 5, 2005

8561,

When extending liability to additional locations on a homeowners policy you are simply doing just that, extending liability coverage. As an adjuster, in the event of a claim you take the policy owners dec sheet and examine all locations listed that have insured structures. If there are four different locations listed and only one has a home or other structures insured and the other locations have no structures what are you insuring? Do you inspect locations with no structures? Only in the event of a liability claim would this happen, if the location is not listed as an additional location then there will be no coverage.

You can insure the fencing, or a structure but I don't think you can insure the dirt, or the trees unless they are an insurable crop. If I extend liability to an additional location my main concern is if there are any vacant structures or other hazardous risk on that property. More than likely someone will become injured while snooping around somewhere they don't belong. Also, if you acquire a piece of land that say has an abandoned well or cellar and someone falls into it you are negligent for not taking proper steps to insure that this can not happen....if you claim you didn't know it was there then you are negligent for not inspecting your property.

For anyone who thinks they should not list all locations that they have a financial interest in may be making a huge financial mistake. If everyone were honest there would be a limited need for liability insurance.

According to the article you listed the link for, vacant land was defined as follows: “Vacant land,” according to the courts, means land that is unoccupied and unused and/or which has no structures on it. Keep in mind this is the Florida Courts and you would be hard pressed to find any land in this area that has no activity of any kind.

I really think we are getting of the real issue, additional insured locations !

In this area vacancy correlates to dwellings and not land.

AndyMA · May 5, 2005

( 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.
) I found this to be absolutely true when trying to buy insurance on my 76 acre farm in Conn. I called it vacant and several insurance companies who sent folk out to look at said NOT VACANT due to stone walls and old old fencing. Hence no insurance. Advice to all... Many times on this board what was get is one or more people's opinions...fine when it comes to tractors or equipment, but not legal, liability, insurance or other such items. Please seek the advice of a trained licensed professional in you area. Talk to a lawyer about how to protect your assets. My farm is currently not protected due to costs and I am looking into how to do it. I do not own a house presently and have moved into a converted apartment in my industrial building. I am loking into whether if I pay rent to my Reality LLC, I can then get tenants insurance and cover the farm that way???
Any thoughts?

Andy

Soundguy · May 5, 2005

( When extending liability to additional locations on a homeowners policy you are simply doing just that, extending liability coverage )

That was more or less the wording my INS agent used.

( If there are four different locations listed and only one has a home or other structures insured and the other locations have no structures what are you insuring? Do you inspect locations with no structures? .
)

( but I don't think you can insure the dirt, or the trees unless they are an insurable crop )

Honestly.. I think you guys are stating the same point .. just differently. Caddison.. it's obvious you are an insurance person, and know the exact terminology. The rest of us are'nt ins people. I get the feeling when 8561 or others say that they have "insured' their vacant property", that in reality they are doing what you mentioned first.. they have liability insurance coverage.. not fire/wind/water/theft casualty coverage for a loss of real and tangible personal property. That's my take anyway

( Only in the event of a liability claim would this happen, if the location is not listed as an additional location then there will be no coverage )

I'm guessing that is an insurance to insurance company variable. for instance. my NAtionwide agent told me that a nationwide homeowners policy automacaly extends it's liability coverage to other vacant land you own ( not comercial ).. etc. However.. I agree that it is very important to make get that clear between you and your agent about whether the land does need to be scheduled or not.. etc.

Soundguy

Jagmandave · May 5, 2005

Well, this thread got me to thinking, since I'm getting ready to put up a small (12 X 20) metal building on my "vacant" property to keep the tractor and ZTR out of the weather, so I called my ins agent, expecting to have to write him a check. After discussing it thoroughly, he said I woudn't need to buy anything just yet, but that when I started to build my house, then we should talk. Apparently, my current homeowner's already covers any additional structures, even on other proerty I own. I have no other separate policy on my "vacant" land. FWIW, and I live in Ks.

Highbeam · May 5, 2005

I have the same deal. Garages do not disqualify me from being covered by my homeowner's insurance for liability. WA

caddison · May 5, 2005

Soundguy,

I think you have hit the proverbial nail on the head. My point was for the extension of liability to additionally insured locations that are free of dwelling and/or other structures. There is a difference between every company. As I am in a rural location dominated by farming there is not much land that is vacant. There is a difference is terminology with every companies policy. We extend liability to any other owned property (Land) that is not over 40 acres or commercial. I researched our policy with great detail and there is not even mention of "vacant land" only vacant structures. Like I said, each company is different in there terminology and procedures.

8561 · May 5, 2005

I agree Cliff, I think Soundguy's earlier post is correct also. I think you and I were making basically the same point, just attacking it differently. You are absolutely correct that if liability is extended to another location, and named in the policy, you have the coverage. The point of my post was that the standard homeowners policy automatically extends liability to vacant land you own, you just need to be careful how you define vacant. If you need to double check, vacant land is discussed in column 2 of page 1 (of 18) of the standard ISO homowners policy.

Also as a point of clarification, in my earlier post, I included a link to the Florida Agents Association website. That material is NOT exclusive to Florida, but is taken by permission (as noted in the first line) from the national agents association. The opinions and case law are pertinent all over the country, not just Florida.

Bottom line, always understand fully what you are covered for and seek the advice of qualified individuals and never, ever, assume you have coverage for something without checking.

sneaky_pete · May 6, 2005

( I am loking into whether if I pay rent to my Reality LLC, I can then get tenants insurance and cover the farm that way???
Any thoughts?)

Sorry it doesn't address your insurance problem, but your question is interesting to me because I do the exact opposite - my corporation leases it's office space from me personally; that way I get to transfer a little bit of money every month without having to pay self-employment taxes on it.

Good luck with your insurance problem. Talk to several different agents; I have always been surprised how vastly different quotes from different insurance companies are for the same piece of property. Most recently, I was sure I could save money on my place by switching from State Farm to USAA, but the USAA quote was more than twice what I was paying with State Farm! This has me baffled, because they're both using the exact same data.

muscat · May 6, 2005

I have been struggling with USAA as well. They do not want to cover my non occupied farm of 54 Acres. In fact I dont think they would cover it if I lived there. As soon as they find out you have Cows, fences, barns etc.. they back away quick.

In Calif the Farm Bureau has ties to Allied insurance, and they did not hesitate to give me a quote but it is expensive.
$320 for $500k liability
$200 adder for livestock
$50 adder if I rent the trailer
$80 adder for limmited farm application (chemicals etc..)
$125 adder to cover a $27K tractor
$250 adder for a double wide and garage $25K worth of coverage which basically pays to demo the place if it burnt.

Basically it came out to about $1200 a year.

Now I have to decide what to do.