Say you just purchased a plot of land. Land is expensive, and you want to make sure your new land is protected in case something happens before or while your home is being built.
If you purchase land, you can typically extend your home insurance policy to cover that land. This coverage is typically called land insurance, which covers liability concerning bodily injury, property damage and possible lawsuits. If you don’t have a home and instead purchase the land to build your dream home on, you can purchase vacant land insurance separately. This generally covers liability insurance, as well. You can purchase land insurance and home insurance through an independent insurance agency.
Is Land Insurance Required?
You may not be required to carry land insurance for the bare land you own, though it is recommended. A lender is also within their rights to require you to carry insurance for the purchased land. If there is a structure on the land, you should purchase insurance to protect it from fire, wind, theft, vandalism, smoke and other dangers. Keep in mind that you could be held liable if something occurs on your land. For example, if a fire starts on the land and ends up damaging a nearby home, you could be held liable for the damages.
If you have a home, your homeowners insurance should be adequate to cover your plot of land. A typical home insurance policy covers:
- General Liability: Liability insurance covers bodily injury or property damage that occurs on your property, as well as lawsuits relating to either of these incidents.
- Dwelling Coverage: This covers the physical dwelling and its structures from fire, smoke, lightning, wind, hail, theft, vandalism and more.
- Additional Living Expenses: Additional living expenses, or ALE, provide compensation if you must live somewhere else while repairs are being made to the dwelling.
You can purchase home insurance as soon as you sign on a new home. It’s almost never too early to insure your house and the land you’ve purchased. If you’ve purchased land for farming use, be sure to purchase farm insurance. Farm insurance offers coverage specific to farms such as crop insurance, farm equipment insurance and livestock insurance. Consider the use of your land before shopping for insurance to insure your bare land. Liability insurance will not cover damage done to the land itself.
FAQ’s How Do I Cover Bare Land I Just Bought?
What is bare land insurance?
Bare land insurance is a type of policy that provides coverage for land that does not have any structures on it. It typically protects against liability claims and may offer protection against certain types of environmental damage.
Why do I need insurance for land with no buildings?
Insurance for bare land is important because you can still be held liable for injuries or accidents that occur on your property. Additionally, if your land is damaged due to natural disasters or vandalism, having insurance can help cover the costs of restoring it.
What does bare land insurance cover?
Coverage can vary, but bare land insurance usually includes liability protection in case someone is hurt on your property. It may also cover legal fees and medical expenses. Some policies might offer coverage for environmental cleanup or damage due to events like fires or floods.
How do I determine the amount of coverage I need for my bare land?
The amount of coverage you need depends on various factors, including the size of the land, its location, and how it’s used. Assessing the potential risks and consulting with an insurance agent can help determine the appropriate level of coverage.
Is bare land insurance expensive?
The cost of bare land insurance varies based on the risk factors associated with your land. Generally, it is less expensive than insurance for developed property, as there are fewer structures and less risk involved.
Can I get liability coverage for recreational activities on my bare land?
Yes, you can often get liability coverage for recreational activities on your bare land, such as hunting or fishing. Be sure to disclose these activities to your insurer so they can provide the right coverage.
Are there any exclusions I should be aware of in a bare land insurance policy?
Common exclusions might include damage from certain natural disasters, intentional damage caused by the owner, or issues arising from improper land use. Read your policy carefully and discuss exclusions with your insurance provider.
How does owning waterfront bare land affect my insurance needs?
Owning waterfront property may increase your insurance needs due to higher risks of flooding, erosion, or environmental regulations. It’s important to discuss these factors with your insurance agent to ensure adequate coverage.
How do I get bare land insurance?
To get bare land insurance, you should contact an insurance company or broker that specializes in this type of coverage. They will assess your land and its uses to provide you with a quote. You may need to provide details about the location, size, and your intended use for the property.
Can I add additional coverage to my bare land insurance policy later on?
Yes, most insurance providers will allow you to adjust your policy or add additional coverage as your needs change. If you plan to develop the land or change its use, you should update your policy to reflect these changes to ensure you remain adequately covered.