Personal Lines - Vacant Land Liability

[ozzywald]

Doesn’t liability from the primary home policy extend to any vacant land the insured owns in the US?

I’ve received different responses from different carriers/underwriters on this.

I thought that liability extends to vacant land - if truly vacant with no man-made structures - from the primary home policy but the vacant land address needs to be listed on the umbrella.

One of my underwriters was telling me to list vacant land on the primary home policy as “additional residence occupied by insured” and to leave it off the umbrella policy. My issues with this are that vacant land is not a residence nor is occupied by the insured.

Mostly inquiring about coverage in Virginia although I would think the guidelines would be standard nationwide.

Any knowledge, experience or tips would be appreciated.

 

[fed up]

It will depend on the carrier. Some may include it, others will not insure it. You will need to ask a few different agents and make sure you get in writing that the vacant property is covered. How have you secured the property will be a question you need to answer. Is it posted?

 

[InsCommentary]

1. Get coverage opinions from the claims department, not the underwriting department.
2. Get coverage opinions in writing.

Homeowners insurance is not a commodity. Each policy can be different. If it's an ISO policy, liability is worldwide, but for certain exposures like undeclared owned or leased premises, coverage hinges on whether it's an "insured location." There are, as I recall, about 8 categories, one being vacant nonfarm land.

As you say, it must be truly vacant. If there is a "No Trespassing" sign, it's probably not vacant. If there is a fence post, it is likely not vacant. If there is a man-made drainage ditch, it may not be vacant.

Some carriers will allow you to simply add the location on the Dec. page, others will endorse the coverage, others won't cover at all.

 

[marindependent]

If there is a "No Trespassing" sign, it's probably not vacant.

Why would a No Trespassing sign means it couldn't be vacant InsCommentary? Just curius.

 

[InsCommentary]

That’s a man-made object. There is ample case law that “vacant land” refers to land in It’s natural, unaltered state. That being said, it varies by legal jurisdiction and the facts of each situation. The best course is to get the carrier to opine about coverage and, if they say it’s arguably not vacant, take the appropriate measures to insure coverage.

 

[marindependent]

Thanks - Im sure you are right. I was just thinking that if I owned a truly vacant plot of land the very first things I'd do with it to potentially cut down on the liability associated with it is to post No Trespassing signs.

 

[InsCommentary]

Just post the sign slightly OFF your premises and consult with your insurer to make sure you have coverage.

 

[adjusterjack]

The ISO HO-3 includes, as an "insured location" "vacant land, other than farm land, owned by or rented to an "insured."

The policy does not define "vacant."

The simple solution is to just list the location on the policy, regardless of what anybody says or writes about coverage.

 

[adjusterjack]

There is ample case law that “vacant land” refers to land in It’s natural, unaltered state.

Well, I don't know about "ample" but I did find reference to three such cases.

Travelers Indemnity Co. v. Holman (330 F.2d 142, 5th Cir. Texas, 1964), vacant land requires that the property be unoccupied, unused and "in its natural state."

De Lisa v. Amica Mutual Insurance Co. (59 A.D.2d 380, 399 N.Y.S.2d 909, 1977), vacant land meant that there was no structure or building on the land, so there was no coverage.

O'Connor v. Safeco Insurance Co. (352 So. 2d 1244, Fla. Dist. Ct. App. 1st Dist., 1977), property was determined not to be vacant because a surfaced road went through it.

That's Texas, NY, and Fla. Case decisions from those states are not binding on other states so one would have to do case searches in each state where the question arises.

Or, just list the property and avoid the inevitable expense of litigation.

 

[marindependent]

Thank you both - great great and useful information.