You may be leaving your parcel of land undeveloped for a number of reasons. Maybe one day you plan on building a summer cabin or retirement retreat, or using the land to hunt and fish. No matter what your vacant land is used for, you might want to consider insuring it against certain risks.
Or maybe you have a home that's currently unoccupied for many different reasons. You may have put your home on the market and left it vacant after you moved into a new house. But if your home is unoccupied, certain coverage may be limited by your homeowners insurance policy. In that case, you may need vacant property insurance to cover your liability risks.
If you need insurance for vacant land or vacant home insurance and aren’t sure where to start, contact a local independent insurance agent. They can help you compare quotes from multiple insurance companies and gather the information you need to make an informed decision about land insurance and vacant property insurance. But for starters, here's a closer look at vacant land insurance and vacant home insurance.
The Importance of Liability Insurance for Vacant Land
If you own your property outright, you're not legally required to buy land insurance. However, this land liability insurance coverage will be essential in the event of a lawsuit. Your lender may also require you to have vacant land liability insurance if your property is financed.
To be considered vacant land, it can't have any existing structures. It's also necessary to consider if your vacant land is used for sport, as in the case of hunting. Hunting land liability insurance would be required in this scenario.
Further, if your land is technically a farm, you'll likely need farm land insurance coverage, often found in a farm and ranch insurance policy. An independent insurance agent can help you identify and secure the right kind of coverage for your vacant land.
What Does Vacant Land Insurance Cover?
Land insurance or vacant land insurance is a form of property coverage that covers claims of bodily injury or personal property damage if a third party has an accident on your property and you're found to be at fault. If someone files a lawsuit against you, vacant land personal liability insurance will also help to cover your legal fees.
While vacant land insurance can't cover any physical damage that happens to your land, it will protect you financially if others are ever on your property. Having general liability insurance for vacant land can prevent you from suffering hefty financial losses in the event of a lawsuit. To decide whether this type of insurance is right for you, consider your risks and talk with an independent insurance agent.
How Do I Get Vacant Land Insurance?
The easiest way to add land insurance is through your homeowners insurance policy. If you own a home, you can typically extend your liability coverage to include your vacant land. If you have an umbrella insurance policy, be sure to add your vacant land to that policy as well and update your liability coverage if needed.
If you don’t have a homeowners policy, you can purchase a separate vacant land fire insurance policy through an independent insurer. These policies typically have no deductible, and the premiums are affordable. An independent insurance agent can help you compare quotes for raw land insurance from multiple carriers in your area.
Hunting Land Insurance
If you plan on using your property for hunting and allowing others to use it, consider adding a special type of property insurance. Because of the risks involved in hunting and using firearms, you are at a greater risk of liability concerns.
Also, as a responsible landowner, inform all hunters who use your land of any perils they should know about on your property, such as cliffs, abandoned wells, or barbed wire fences. Sharing this knowledge is one way to help cover your liability risks, but you should still have liability insurance coverage in place as well.
Some insurance companies require landowners to make hunters sign a waiver absolving the landowner of any wrongdoing. While this won’t protect you from all potential lawsuits, it can provide a safety net that otherwise wouldn’t exist.
Additionally, some hunters may ask to use all-terrain vehicles (ATVs) on your property, and you need to be aware that you'll assume additional liability risks if you allow it. If an accident happens on your property, you can potentially be held responsible, especially if there are features in the natural landscape that pose a risk.
What Vacant Land Insurance Doesn't Cover
If you have any kind of structure on your land, even if it's temporary, it is no longer "vacant" and will not be covered by vacant land insurance. If you decide to start constructing a building on your formerly vacant land, the land insurance will be void for that structure.
You'd need to purchase additional property insurance to cover any outbuildings or dwellings. Even if you have an old structure on your property that's been empty for many years, your land isn't considered vacant property.
If someone got injured inside an abandoned building on your property, your land insurance liability wouldn't cover it. You'd need a vacant home insurance policy for that.
What Is Vacant Home Insurance?
Vacant home insurance is available for houses that are unoccupied for an extended period of time, including:
- Houses vacant for a minimum of three months and up to 36 months
- Unoccupied homes on the market
- Homes in foreclosure
- Vacant homes under renovation
Some companies offer insurance for vacant homes as an addendum to an existing homeowners policy. Other insurance companies are hesitant to provide coverage to vacant homes due to the many risks they face, so you may need to shop around for specialty coverage. A vacant property policy may have time limits and other stipulations, so do your research before buying.
How Much Coverage Do I Need for a Vacant Home?
The amount of coverage you need depends on several factors. Most importantly, always insure for the replacement cost value of the property if you can.
The longer the house is vacant, the greater the risk it may be vandalized or damaged, because no one is there to monitor the home heating, electrical, and plumbing systems. Vacant property insurance will typically cover physical damage to your home, including weather damage and vandalism.
If you have detached structures or other personal property, consider adding additional vacant property insurance coverage for these structures as well. This will help ensure that you're protected if someone gets injured on your vacant property and files a lawsuit against you.
How Much Does Vacant Home Insurance Cost?
Because certain risks increase with unoccupied property, vacant home insurance is typically more expensive than a standard homeowners policy. The current average cost of standard homeowners insurance is $2,466 annually, so you can expect to pay a bit more than this for a vacant home policy.
If you’re only adding an addendum to your current policy, it may be more affordable, but make sure it includes all the coverage you need. Fortunately, insurers typically return any unused premiums if the house becomes occupied before the end of the policy term.
Factors that affect your premium can include your location, the home’s value, the amount of coverage you purchase, and the home's safety. Since risk is the biggest concern for insurance companies, you may be able to reduce your rates if you have a home security system.
When Do You Need Vacant Home Insurance?
If you know your home will be unoccupied for a long time, check your current homeowners policy. Your insurance company may be willing to work with you to ensure that your home’s coverage continues during that vacancy. For example, your insurance company may extend your current policy for a specific time period, after which you'd need to purchase additional coverage.
When you’re actively trying to rent your home, you may not need vacant house insurance if you expect it to be occupied within a short time. But if you’re currently renovating it to rent to someone next year, vacant home insurance will protect your investment.
Vacant property insurance may be a wise investment if your home is on the market, especially because it’s hard to predict when a house will sell. Be sure to purchase a policy that will refund premiums if the house becomes occupied. Anytime your personal home or rental properties are vacant for an extended period of time, you may need vacant house insurance to protect yourself from liability claims and other risks.
Finding the Right Vacant Land Insurance or Vacant Home Insurance for You
If your insurance company doesn’t offer additional liability coverage, you may need to seek out a company that carries specialized coverage. An independent insurance agent can typically find specialty insurance because of their association with many different insurance companies. While one carrier may be able to cover your risks at an affordable rate, another may not be able to offer land insurance or vacant home insurance at all, so working with an agent who can review various insurers' products can save you time.
Why Work with an Independent Insurance Agent?
Independent insurance agents are experts in finding you the right kind of vacant home insurance or land insurance and any other type of coverage you need. They can shop and compare policies from many different insurance companies for you, then present you with only the best quotes together in one place. Also, they're available down the road to help you file claims if you ever need to.
If you need liability coverage for your land or vacant property, an independent insurance agent is a great resource. Find a local insurance agent in your area today to compare quotes and get the land liability insurance or vacant home coverage you need.
Sources
https://www.bankrate.com/insurance/homeowners-insurance/homeowners-insurance-cost/
