Determining if land is vacant 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, such as the use of an owned recreational vehicle, are only covered if they take place on an insured location. Undeclared premises that one owns or rents are typically excluded unless they are insured locations. 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.
In response to an agent’s question on what constitutes vacant land, it was essentially unanimous among Big “I” Virtual University faculty members that virtually any man-made structure on a premises removes it from the vacant category. In addition, in most cases, such property would need to be specifically described as an insured location on the declarations page—that is, no automatic insured location coverage as per the policy definition—in order to extend liability coverage.
One VU faculty member notes there are few plots of ground considered vacant because the ISO manual definition is "any land on which there exist no man-made structures." Fences, walls, telephone poles and roads eliminate virtually every tract, thus the coverage grant.
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, the faculty member says, also noting that most practitioners, experts and case law support that land isn't vacant if there is a man-made object on it.
Another VU faculty member says that vacant land, according to the courts, refers to land that is unoccupied and unused, and/or has no structures on it. According to Travelers Indemnity Co. v. Holman (330 F.2d 142, 5th Cir. Texas, 1964), vacant land requires that the property be unoccupied, unused and "in its natural state."
Meanwhile, in De Lisa v. Amica Mutual Insurance 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. And in O'Connor v. Safeco Insurance 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.
Here are some examples of things that make a property not vacant and, unless declared, not an insured location:
- A chain across a road decapitates a snowmobiler.
- Someone is injured falling out of a deer stand that someone other than the owner constructs without the owner's knowledge.
- A child falls into an old foundation from a home that has been there for years without the owner noticing.
Some states have some statutory relief for owners of vacant land, but that does not help the defense costs. Maine, for example, happens to be one of those states, but one can still be sued.