What is “Vacant Land”?

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”?

Question

“What is vacant land? An underwriter is insisting that a fence or stone wall takes it out of the vacant land category. Would appreciate your input. Thank you.”

Answer

This is an issue that comes up quite often. The importance of whether or not property is “vacant land” is that the ISO Homeowners forms include vacant land in the definition of “insured location.” In Section II of the HO policies, certain types of activities (e.g., use of an owned recreational vehicle) are only covered if they take place on an “insured location.” Some locations are automatically included in the definition…if not, they can be added on the policy declarations page or, with some carriers, by endorsement.

We ran this by the VU faculty (see responses below) and it was pretty much unanimous that ANY man-made structure on the premises takes it out of the vacant category.

In most cases, such property will have to be specifically described as an insured location on the declarations page (i.e., no automatic “insured location” coverage as per the policy definition) in order to extend liability coverage.

Response 1

There are few plots of ground considered “vacant” as the ISO manual definition is “any land on which there exist no man made structures.” Fences, walls, telephone poles, roads, etc. eliminate virtually every tract, thus the coverage grant. Note that the policy doesn’t define “vacant land” (at best, it’s referenced only in the manual or underwriting guide), so it is subject to interpretation. However, I think you’ll find that most practitioners, “experts,” and case law (see below) support that land isn’t vacant if there is a man-made object on it.

Response 2

I teach it as “Vacant land means land which has nothing besides what God created on it.” I don’t have the citation handy, but I have a court case where a small concrete pad covered an old well. A child fell over the concrete pad and a suit was filed. The court ruled it was not vacant.

Response 3

“Vacant land,” according to the courts, means land that is unoccupied and unused and/or which has no structures on it. According to Travelers Indemnity Co. v. Holman, 330 F.2d 142, 5th Cir. Tex. (1964), “vacant land” requires that the property be unoccupied, unused and “in its natural state.”

In De Lisa v. Amica Mutual Ins. Co., 59 A.D.2d 380, 399 N.Y.S.2d 909 (1977), a child was injured in an abandoned structure on land owned by the insured. The court ruled that “vacant land” meant that there was no structure or building on the land, so there was no coverage. In O’Connor v. Safeco Ins. 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.

Response 4

My advice in training is that is a client has other plots of land, add them and pay the fee. I am always apprehensive about a few things…

There was a case that went all the way to the Florida Supreme Court upholding the exclusion involving a piece of land that had a pond and the pond had a small pier on it. A trespasser, after a few drinks, jumped off the pier and broke his neck and sued. The insurance policy would not pay.

Things that bother me here are…

A chain across the road takes off a snowmobiler’s head. Is it vacant?

A deer stand that someone other than the owner constructs, that someone falls out of…the owner does not even know it is there. Is it vacant?

An old foundation from a home that has been there for years and you do not even know is there…a child falls in. Vacant Land?

Probably not. For the nominal charge, add it as an additional insured location.

Some states have some statutory relief for owners of vacant land, but that does not help the defense costs. Maine happens to be one of those states, but you still get sued.

Response 5

If the land contains a man-made improvement, be it fencing, rock wall, roadway, pond, dam, or an abandoned building…maybe even a flag pole, its NOT vacant.

State courts vary as to what constitutes vacant land. Most, as I recall, considered improvements as the main factor although some do not agree as to what constitutes an improvement.

Two cases I recall vividly dealt with: (1) a road built by a former owner, and (2) a natural vs. man-made pond:

1. The road was deemed to be a preexisting feature (not called a structure or improvement) that materially benefited the current owner (insured). As a consequence, it was not vacant. The insurer unsuccessfully used a prior case that found land to be vacant even though it contained a naturally evolved path (from animals & erosion) that could accommodate vehicles and people.

2. There are a few cases dealing with ponds, some natural, some man-made, and one involved a man-made enhancement to a natural pond. Most of the decisions favored VACANT when it was a naturally occurring pond and NOT VACANT when it was man-made.

Response 6

One court case that I saw said, “the beneficial use of non-tenanted land renders it non-vacant.” I have relied on that for many years and have said that any improvement takes away the vacant land coverage. The safest way is to endorse on the HO policy.

For an example of another article on vacant land, click here.