Vacant Land Property Insurance - When Should You Get It?

For those of you who buy your properties before you sell them ( not a Double Close), do you get insurance to cover the vacant land while you are trying to sell it and till buyer closes on it? If you do get insurance, do you do it thru your personal policy or do you get one for your LLC.


For houses I get a vacant property insurance covering liability and the potential loss of the house.

For land just liability is needed.

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@jawollbrink Thanks Jason for the reply.

@edgarcox We have general liability policy for vacant land for our LLC, and we notify the insurer every time we buy or sell a property.

@aprokos. Thanks Alicia. That‘s a great way to do it. I assume tne insurance company only charges you for the number of days you are carrying the property.

@edgarcox Yes, but we do larger deals that take a while on the development side (subdivision, county approvals), so it is not something that changes daily. I'm not sure of the profile of what you buy and sell, but we use The Cincinnati Insurance Companies. I'm sure someone there could give you an overview of the mechanics given your investment picture.

@aprokos Ok, I will check with them to see if they can help me in my business. Thanks you.

Any advice on which insurance companies are reliable to work with, for the land liability policy?


This might be an unconventional approach, but you could just as well skip the insurance altogether.

For something like vacant land that you're planning to turn over quickly, it could be more trouble than it's worth.

We're just talking about vacant land after all. If it's a flat lot with little in the way of trees, cliffs, boulders, swamp areas, debris or other things that a person can get hurt on, I would think the chances of someone injuring themselves AND going through the trouble of finding out who the owner is AND proceeding to sue them would be very, very, very slim.

The fact that most property hazard insurance companies will only charge a minuscule amount for this kind of coverage is a sign that even they think the chances of a lawsuit are slim-to-none.

Not giving you any legal advice here, but it's just food for though. Sometimes the practical move makes more sense than what a property insurance agent or attorney will tell you.


@donyost Appreciate that.

Thank you.

What’s the minimum liability you normally get for your vacant land?

When selling on terms do you normally insure the land until the note is paid or does your contract stipulate that the buyer must insure and show proof? And if you do have the buyer responsible for insurance is it a hassle to enforce?

@edgarcox I recently bought an insurance policy on a larger vacant lot.

It’s a 6.7-acre vacant lot, currently zoned residential and it’s on the corner of a busy-ish intersection. For $1,000,000 of coverage, the cost is $317 per year. If I wanted to up this to $2,000,000 of coverage, it would’ve been $355.

Note: I didn’t shop around for great pricing on this. I probably could’ve gotten a cheaper price elsewhere, but with my plans for this property (the zoning and other aspects of it will likely change in the next few months), I wasn’t overly concerned about the cost at this point.

@retipsterseth Do you buy ins for all your lots ar just high-risk areas?

@suitedconnector the only reason I got insurance on this property is because it’s a buy-and-hold deal (not a quick flip). I usually don’t bother with it when I know the property is going to move through my pipeline in a matter of weeks or months, but since I intend to have this one for years into the future, I figured it was a smart move to actually protect myself with more than just the corporate shield of my LLC.

Bear in mind that vacant land insurance is simply a form of liability insurance. Initially, I thought it protects the land and its structures, but it doesn’t work this way.

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