So, my husband and I are in the process of buying a parcel of land my grandfather owned. Sitting on this parcel is a 2-car detached garage as well. So, I ask:
Do you think my homeowners policy extends liability and property coverage automatically to this land & garage? Don’t you love trick questions?
We see this happen often enough- people buy additional locations w/ buildings (similar to my situation) and assume that their homeowners policy automatically extends to this new location. This is a very BAD assumption and could end up costing you big time.
All homeowners policies offer a definition of “insured location”, which, of course, includes your “residence premises.” There are additional definitions of “insured location” included, but here’s the one that applies to this situation:
“”Vacant land, other than farm land, owned by or rented to an “insured.” (for you insurance types out there, I’m referring to the ISO HO 03 edition 4-91)
What’s important about this definition? The term “vacant.” This means empty, without, zip, zero, but most important- Nothing on it. No buildings. Tumbleweeds and tarantulas only.
If there’s a building on it, no dice. It is not an “insured location” and you don’t get automatic property or liability coverage on the homeowners policy.
There may be a situation where this doesn’t apply (disclaimer alert), but I’m pretty confident that in 99.9% of situations, it does.
So the lesson here? Don’t make assumptions. Ask questions. Get answers. The alternative is too costly.
Comments? Ever happen to you? Any stories you want to share? As always, thanks for reading and please share if you find this valuable.