Homeowner's insurance contains liability coverage to pay for, among other things, injuries that occur on your property. But if you own vacant land that you don't use, you may be surprised to know that you should have liability insurance there, too. When you know how state laws typically assign liability on vacant land, you'll better understand the importance of insuring it.
People own vacant land for a number of reasons. Maybe you plan to build a home there someday. Maybe it is an investment. Whatever the reason, you are responsible for the land while you own it. Just because you are not using the land doesn't mean it is unused. Hikers may not realize they are on your land if it is in a wooded and/or seemingly public area, and trespassers use land regardless of its ownership.
As a landowner, you must take reasonable steps to prevent injury on your land. People who are injured on your land, even if you are unaware they are using it, generally have the right to be compensated, and as the landowner, you are typically responsible to pay.
Sometimes, you can avoid liability by fencing your property, posting signs against trespassing or otherwise making it known that the land is private property and shouldn't be used without permission. However, this isn't always the case. In Oregon, for example, even trespassers have rights to compensation in certain circumstances. If your land is located in an area a large number of trespassers are known to frequent, or if the trespass involves young children, you may be responsible for the resulting injuries.
Liability insurance will shield you from financial loss resulting from such injuries. This coverage pays for financial damages for which you are held responsible as the landowner, up to the limit stated in your insurance policy, and typically pays the defense costs associated with a lawsuit. Some insurers even provide legal counsel. Buy a liability limit large enough to fully protect your asset base, since these assets may be garnished by a court to pay for injuries your insurance doesn't cover.