If you’re a homeowner, you probably know that your homeowners insurance doesn’t cover land. That’s often what causes the difference in final replacement cost value insurers calculate versus tax appraised values of homes, appraisals, or selling prices of homes.
So if you own land without any homes and structures on it, and no county fairs are going on there, you must not have to worry about any losses, liability, or lawsuits stemming from someone else on your land, right?
Even the emptiest of land poses risks. But are the risks worth buying land insurance?
For one, you may only believe that you know what’s going on. There could be much more going on and there’s plenty that can land you in financial ruin or at least significant financial loss. If you think people won’t sue over something happening on vacant land, let me remind you — a woman sued a fast food restaurant because she spilt her coffee, which was too hot, and won the lawsuit. People will sue over anything.
… and West Virginia, Indiana, California, and all other 46 states, there is vacant land insurance.
You probably didn’t know it existed, but if you own land, depending on how it’s used, vacant land insurance could be your hero. You know how the mail carrier can sue if he or she trips on a broken step on your front porch and break a hip? They can do that because it occurred on your property, and you’re responsible for anything that happens on it. An example slightly closer to vacant land liability: I come to your house, step into a large hole in your yard, fall, and break my ankle. I can sue you, and your homeowners insurance policy’s liability coverage would pick up the lawsuit tab if it wasn’t determined it was there because of poor maintenance, failure to make repairs, or negligence. I can use your policy’s medical payments coverage (which is only for guests), but that would only be $500 to maybe $5K on average (if I’m lucky).
The same goes for vacant land — you’re responsible for any happenings on your land. Land insurance is a type of liability coverage, and although it’s not required by law to carry land insurance, it’s a good idea to consider it. Granted, you don’t need it as badly as auto or homeowners insurance, and your need largely depends on how it’s used. If you own vacant land at all though, analyze your risks to see if benefits outweigh the cost.
So what could possibly happen on an empty piece of land? Here are just a few risks and how vacant land insurance would help in each scenario:
- Hunting: If you allow hunters on your property, buying land insurance is a good idea. Not only are hunters carrying firearms on your property, but there’s increased risk because of distance traveled and other types of hunting equipment. For example, a New Hampshire hunter fell from a tree due to a faulty tree stand, then sued the landowner for negligence. The lawsuit was later withdrawn due to discrepancies in the prosecution’s case, but legal fees aren’t cheap. If you’re found liable, you’ll probably find yourself responsible for both parties’ legal costs on top of any lawsuit or claim payout. This is where land insurance could save the day — and every dime in your pocket. It could pay for legal costs to some degree since it’s liability related. As previously mentioned, even if you weren’t aware of the issue, you’re not released from liability. As a property owner, you’re expected to inform visitors of possible risks, should remain up to date when it comes to maintenance and upkeep, and do regular checks for possible risks. If people will be on your land for any reason, let guests know they’re assuming all liability if warnings are ignored.
- Fishing: Let’s assume there’s a pond or stream on your property with good fishing. You allow people to fish on it, but you know there’s a treacherous path leading to your pond. One day, as a fisher heads to the pond, he slips on the path, hooking his friend in the face like a fish. Two injured parties emerge, and you could be held responsible for those damages since the path is technically your property. Additionally, if visitors pay fees, you hold even more liability than if they’re able to enter without paying. Land insurance can help pay medical bills and perhaps any lawsuit judgments (only up to your limit) if you’re found responsible.
- ATV: Many people use all-terrain vehicles, and if you own a large portion of land, it may be tempting to let people ride there for free, but that’s assuming a lot of responsibility. ATVs are notorious for flipping over, and if one flips and rolls over a rider because of a broken well, you can be held responsible under the premise that your property wasn’t properly maintained. If the person is severely injured, you might have to pay for medical bills, pain and suffering, lost wages, and more. A real-life example: In 1994 in Missouri, a couple was sued by an ATV rider that was exploring the Glenns’ 420 acres. Even basic land insurance may not protect for ATV damages.
- Hiking: 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 land insurance may not cover structures on your property.
- Foot Traffic: 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 land insurance, you could be protected against such damages.
The size of your property doesn’t matter. Maybe you allow visitors, maybe not, or maybe you have suspicions that people will use your land. In any case, land insurance is the safe choice. It can help pay for legal fees, medical bills, forms of property destruction, and buying it can be as simple as updating homeowners insurance policies.
If you don’t allow visitors and trespassers aren’t a problem, you may not need extra liability coverage as badly as other policies without identifiable hazards. Landowner laws vary by state though, so you can be liable for many different things. This changes according to how the land is used, so some landowners may need it more than others. If you aren’t sure what perils there are, get a survey done to find hazards.
The bottom line though is that you wanted the land, so you should assume responsibility for it. Not only is it the right thing to do — a good faith gesture you’d hope someone would provide for you — it’s protection for you too. If you fail to buy it when you need it, you could find a lot of things “vacant.” That vacancy could range from money in savings accounts, retirement products, investments, your home and assets being seized, and ironically, your vacant land being seized to pay for lawsuit judgments or expenses if someone is injured. Bambi and Thumper won’t sue, but people definitely might.
Follow Desiree on Twitter @DesireeBaughman.