Vacant land has become an increasingly appealing investment, particularly in the age of skyrocketing home and rent costs.

If you’re looking to join the growing ranks of landowners, you should consider insuring your investment. This may sound strange, as nothing can be damaged or replaced on an empty plot. However, undeveloped land has its own liability issues and insurance. It’s not legally required, but you’re leaving yourself open to liability without it.

Home and auto insurance covers physical property like homes and cars, which can catch fire or harm another person. Home insurance policies also come with some form of general liability insurance that covers medical payments for bodily injuries (from, say, a tumble down the front stairs).

If you look at your home insurance policy, you’ll see it doesn’t cover the land your belongings sit on. The land is excluded from property valuation when determining the limits for a total loss. That’s because there’s nothing to rebuild when it comes to land.

Despite its name, vacant land insurance isn’t really for the land itself; it’s for the things that can happen while people are on it.

Vacant land and liability

You could be held liable if someone gets injured or damages someone else’s property while on your land, even if they’re illegally trespassing. The best signage in the world may not prevent an accident resulting from:

• Hunting
• Target practice
• Fishing
• Swimming
• Camping
• Driving all-terrain vehicles
• Hiking and walking
• Exploring artificial or natural structures

Children pose a unique liability risk because they’re not held to the same responsibility standards as adults. If you have a pond that makes for a great swimming spot in the summer or an ice rink in the winter, you might want to increase your signage and insurance. Like swimming pools, ponds can be considered “attractive nuisances.” An attractive nuisance is anything potentially dangerous that could tempt a child to enter your property. Other examples might be a tire swing, treehouse or abandoned car.

The sky’s the limit on what could go wrong and what people will sue for, especially since no one is there to monitor the activities. You could set up surveillance systems to help your case in court, but that doesn’t help you with the cost of defending yourself (regardless of who wins). And there’s no guarantee you’ll prevail.

A word on vacant land and outbuildings

Inform your Rathbun Insurance account manager if you have any structures or outbuildings on your vacant property, like barns, hunting sheds, tree houses or storage sheds. If you fail to do this, you could void your entire policy. You’ll want coverage in case the buildings are damaged or, more importantly, someone is injured while using them.

This also goes for improvements you make after you buy the land. Your vacant or undeveloped land may no longer be considered vacant if it has structures.

Let’s say you buy some wooded property that you use to connect with nature. Years later, you build a garage to store belongings and escape the elements. It’s nothing fancy, but it offers shelter. You may need an entirely new policy type since you developed the land with a structure.

Some land insurance policies offer add-ons for simple structures. You can also purchase a stand-alone policy. Inform your agent if you build any structure on your previously vacant land.

Have the land inspected

Before finalizing your transaction, check with your insurance agent and lawyer about local ordinances and zoning laws. (A deal that looks too good to be true might be a disaster in disguise.) Vacant land can become a dumping ground, leading to infestations and pollution liabilities. And you could be held responsible for the damage even if it occurred before you owned the land. Getting an assessment to reveal any burrowing rodents or contaminants is a good idea.

Land insurance protects your budget

All the money you invested in your land might end up in someone else’s pocket if you don’t have enough liability insurance. Land insurance can help with liability related to:

• Medical payments (due to bodily injuries sustained on your property)
• Legal fees (to mount a legal defense against a lawsuit)
• Settlement costs (to pay for out-of-court payments to settle a case)

Cost and other insurance considerations

Some homeowners policies offer vacant land coverage by endorsement. Land insurance ranges from $15 to $150 per month. Coverage usually starts at $1 million per occurrence. The cost depends on the size of the tract, geographic region, zoning, land features, water features and how much coverage you want.

Farming

If you rent your land for farming, you’ll have a longer list of liabilities. You’ll need commercial and farm liability. You may need environmental insurance for pesticide use, accidental chemical releases and per and polyfluoroalkyl (PFAS) contamination. You’ll also want to verify the farmer’s coverage and potentially add yourself as a named insured to their policy. Talk to your agent and lawyer about the liability and insurance gaps a farming land lease agreement creates. Your lease agreement should stipulate these responsibilities, including insurance.

Recreation

If you use your property for recreational activities, like hunting or camping, land insurance will cover you if a guest or someone else gets hurt.

Developed property

If you develop your land by building a house later, you can transfer your vacant land coverage to a new home construction insurance policy. Remember to alert your agent if you build outbuildings, like the example above, so you don’t negate your vacant land coverage by accidentally omitting a structure.

Shoreline erosion

Suppose you buy vacant land in a coastal location that’s later threatened by shoreline erosion. You won’t recoup the loss of the land, but you may be able to insure the cost of protective seawalls or retaining walls on your property.

Being a landowner is a great feeling. Call your Rathbun Insurance account manager to help you defend yourself against unforeseen land liabilities and tame the wilderness (just a little) with vacant land insurance.