Why Vacant Land Investments Need the Right Protection
If you’ve ever flown on a plane, you’ve probably looked out the window from the sky and noticed the massive amount of undeveloped land in the U.S. The amount might be even more than you thought. According to a study done by the National Weather Service, the U.S. is made up of 2.27 billion acres of land and, at the time of the study, only 108 million acres were developed. That leaves over two billion undeveloped acres of land!
Much of this undeveloped land is purchased by investors for a variety of purposes, such as future development, agriculture, leasing to others or even just as long-term investments with the anticipation of the land gaining value over time.
According to Seth Williams, a land investor with hundreds of transactions and a decade of experience in the industry, purchasing land is a huge investment opportunity. A significant pro is that land investment requires a limited amount of expertise, as opposed to the endless number of problems that can arise from investing in a building. It is also statistically proven that vacant land owners are motivated to sell and will often sell for less than the land value.
Another appealing reason to buy land, Williams notes, is that it is not something that can be replenished, so it is a finite asset that is limited to the amount available. Plus, once the right piece of land is purchased, there are very little expenses involved in the upkeep and ownership.
We cannot go so far as to say, however, that there is no risk involved in owning a piece of vacant land. Just like owning any other piece of property, the owner is exposed to bodily injury and property damage claims. Therefore, landowners should make buying insurance a priority. Here are some possible claims that can arise:
- A landowner installed a chain link fence to prevent any trespassing on their land. The fence had become damaged over time, and some parts were protruding. A passerby was struck in the eye by the protruding fence, causing partial blindness. Suit was filed against the landowner, and the claim was settled for $350,000.
- Trespassers caused a brushfire on a landowner’s property, which spread to the neighboring building. The landowner was found partially responsible, and the cost to repair the building was $200,000.
As you can see, it is important for vacant landowners to get the right coverage, and knowing there is an abundant amount of risks in the U.S. can spell opportunity for your business. While you may know USLI for our ability to provide coverage for vacant buildings, we want you to also keep us in mind for vacant land risks. We provide broad coverage at competitive prices and are able to consider anything from a small vacant lot that was previously used as a parking lot to a large acreage of land that will eventually be developed.
Our Vacant Land product features include our ability to:
- Cover up to 1,000 acres per location
- Consider risks with lakes and ponds up to 25 acres in size, as well as risks with a small shed or garage up to 500 square feet
- Offer $1 million/$3 million limits with no deductible
- Provide 3-, 6-, 9- or 12-month policy terms
As always, thank you for your support and business.
Contact Kate Shuron
Assistant Vice President, Product Leader, Senior Underwriter | 888-523-5545, ext. 2064
Contact Dennis Hufford
Assistant Vice President, Assistant Product Leader, Underwriter | 888-523-5545, ext. 2183
Written by Meghan Ritter
June 6, 2019