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Vacant land, or what qualifies as vacant land, is a common question for the VU. Two recent “Ask an Expert” questions specific to vacant land indicated the need to address the question again.
A customer is considering hosting a party for a church group on a property someone is giving her free access to. If there is a liability claim, will her ISO HO-3 respond? What if it’s property other than her residence premises that she owns?
Do you have any homeowner insureds whose homes are or have been in foreclosure? Do you have any mortgage companies who, as a result of a foreclosure, are insisting that you return unearned premium to them? This article should give you some food for thought as you deal with this growing problem.
This is the time of year when most home sales and purchases take place, from younger families 'moving up' to older insureds 'downsizing' their homes, or perhaps insureds just being transferred by their employers. It is not uncommon for the HO policy on the existing home to remain in place until closing takes place on the new home and the move is complete. Perhaps you've even recommended this to avoid coverage gaps, just like you would recommend auto insurance remain in place until a car is sold. However, according to some insurers, you may have created a completely uninsured risk for your client, along with a huge E&O exposure for you!
I do a seminar called 'How to Win Friends...and Influence Adjusters' that includes a four-step process for resolving coverage disputes. Step #1 is 'READ THE POLICY.' It's amazing what you can discover when you read (or re-read) a policy provision. Such is the case when our 'Ask an Expert' service received an email recently....
Vacant land presents two problems. First, most people find it hard to believe that they could be sued because they own a piece of vacant land. Second, the characteristics that make a piece of land “vacant” are not universally agreed upon, and thus are unpredictable.
The definition of 'insured location' in the HO policy includes any premises 'used in connection with' the residence premises. Exactly what does that mean?
The ISO HO policies automatically include coverage for vacant land as part of the definition of 'insured location.' But what constitutes 'vacant land'? Does a water pump, abandoned building foundation, road, fence, or other object remove the property completely from liability coverage for activities that are only covered while on an 'insured location'?
The named insureds have separate HO-3 policies on two homes. One is occupied by their daughter as her primary residence, but she is not a named insured. The daughter's residence was burglarized and the daughter made a claim for loss of her personal property. The company denied the claim under her parents' HO- 3 because she is not a resident of their household, even though she is a relative. Is this correct?