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How Vacant is Vacant – But What if it’s NOT Vacant?

Author: Chris Boggs

Vacant land, or what qualifies as vacant land in the homeowners' policy, 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.

So, what is vacant land?

Unfortunately, there is no definition of vacant and the courts don't always agree. Essentially, vacant land is land "in its natural state." In essence, land is vacant when it is untouched and with no man-made improvements, additions (such as fences) or uses (such as for growing crops or cutting timber). The existence of trees is land in its natural state, unless there is a business exposure (including selling the timber). 

Here are links to a couple more VU articles on this topic:

But what if the land isn't vacant as described above, does that automatically mean there is no coverage if the location isn't specifically listed on the policy? Let's look.

The definition of "Insured location" includes a coverage extensions for premises away from the residence premises that requires review. Definition "6.c." applies to:
"c. Any premises used by you in connection with a premises described in a. and b. above;" 

Many explain "6.c." as a provision that extends coverage to locations such as self-storage facilities – which it does; but is that the sole use of this coverage extension? The first phrase is "any premises." Property (premises) not located adjacent to the insured's "residence premises" but used in connection with the residence premises qualifies as "any premises." If the insured has storage buildings and other such structures on that land, and there is no business operations (or other excluded operation), that is an "any premises" used in connection with the "residence premises" (which is the "a." referenced in the wording). It looks like coverage would extend to such locations.

However, there is a specific liability exclusion that appears to preclude the needed coverage for such non-vacant land owned and used by the insured. Exclusion E.4. excludes coverage as follows:

4. "Insured's" Premises Not An "Insured Location"

"Bodily injury" or "property damage" arising out of a premises:
 a. Owned by an "insured";
 b. Rented to an "insured"; or
 c. Rented to others by an "insured";
that is not an "insured location"

Note that provision "c." within the definition of "Insured Location" extends coverage to premises "used" by the insured. The exclusionary wording applies to premises "owned" by an insured. "Used" and "owned" are not interchangeable and connote different relationships to the property.

Because of this more-than-semantic difference, if the land is not vacant - as described above or defined by the court - there is no liability coverage extended to the premises. The exclusionary wording applying to "owned" premises that is not an insured location applies to such property.

Regardless whether the policy "automatically" extends coverage to land away from the residence premises or not, you should not depend on the provisions of the homeowners' policy to extend coverage to any non-adjacent property (vacant or not). Always specifically list the location on the homeowners' policy if the underwriters allows it – this avoids any question of coverage.

Last Updated: March 31, 2017

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