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Snarly
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# Posted: 3 Dec 2010 06:34am
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Hi -- I'm new here.
Found this site doing a search for cabin insurance.
Insurance companies are making changes that many of their long time agents aren't even aware of until they try to quote coverage.
I have my primary residence and some property with a cabin 260 miles away from my home. I don't have any history with claims of any kind - good credit - but insurance companies don't want to extend liability coverage to a secondary property with any type of structure on it whatsoever, nevermind getting coverage on the cabin itself.
Anyone else run into these problems? Found any answers?
Thanks.
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fooboo
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# Posted: 3 Dec 2010 11:36am
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I have personal liability insurance of 1 million as part of my car insurance. That covers me if I get sued for something - whether it is on my property or on someone else's property. The coverage specifically goes beyond car accidents and covers all potential liability claims against me.
I can't get insurance on my cabin (the structure) but I do have scheduled coverage for personal property (guns, atv's, fixtures). If my cabin burns down, then the cabin is a loss, but all the stuff inside is covered. My cabin was only a few thousand dollars compared to the ten's of thousands for the stuff inside, so if it burned down, I would take the cash payout and rebuild the cabin and replace the fixtures and other stuff with cheaper replacements. So in the end, I would end up with a replacement cabin and most of the stuff I had before - but it will be in a roundabout, but perfectly legal, way of getting there. If only the cabin structure is damaged, then I'll have to repair it myself.
If you aren't getting good answers from your insurance company, try another one. You may need to look around for insurance agents in smaller towns that are used to dealing with farms and you may want to start calling your place a "farm" instead of a cabin. That word distinction may be all it takes to get the right answer.
If you want to get really fancy, start an LLC for your place and call it ABC Farms or whatever name you want and then deed your property over to the LLC. Your LLC may have an easier time getting farm insurance and it protects you from personal liability. This is the path I'm pursuing for my new place that I'm moving to in 2011.
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Gary O
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# Posted: 5 Dec 2010 11:54am
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Quoting: fooboo If you want to get really fancy, start an LLC for your place
That is a novel approach!
Like your thinking fooboo.
There might be some glitchy things about it all but your tack in getting 'things' covered, and not so much the structure, should open the door.
Man, I need your brain in contract negotiations.
After 20 some yrs in business dealings, I've found there's always a way (with the right, open thinking, attorney).......
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fooboo
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# Posted: 5 Dec 2010 04:51pm
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Another benefit to this approach is that if you ever sell the land some day, you just sell the LLC and everything the LLC owns, including the land, goes with it.
Since the LLC name will remain on the County's property tax rolls as is, your buyer won't be facing an reappraisal and higher property taxes after the sale. That tax savings can translate into a higher selling price for your land and more money in your pocket.
Having an LLC that is setup as a farm can also help with other things. Your LLC can own vehicles, depreciate equipment, get cheap farm plates for your truck, tax exemptions on gasoline and diesel, exemption from building codes, and a whole lot more.
In Kentucky and Florida, the two states where I own land, timber is considered a legitimate farming venture. I would bet that most everyone here on this board has timber on their land and thus the ability to view the entire venture as a farm instead of weekend cabin retreat and reap the benefits of treating it this way. Kentucky requires 10 acres minimum to be considered a farm. I know of no such distinction in Florida.
In most states you can incorporate without a lawyer, but like Gary said, you'll want to find a lawyer that is open thinking if you want to do this right or if you don't have any experience with it.
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fooboo
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# Posted: 5 Dec 2010 05:19pm
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I should add that going the route of an LLC adds some burdens as well. Since you are basically turning your cabin retreat into a business, you need to keep accounting records of income and expenses. The IRS also won't let you declare losses forever. At some point you have to show at least some small profit, but you get to write off all expenses against any income.
I guess what I'm saying is that if you go the LLC route then you need to be of the mindset that your land is going to produce something of value - timber, eggs, crops, crafts, etc. and you'll have to treat it all like any business would. It's quite a different approach than just having a weekend retreat.
There are some special tax rules in regards to timber companies because a timber company might plant trees in year 1, and then record losses for the next 19 years until harvest and the tax code makes allowances for this type of activity.
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Gary O
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# Posted: 5 Dec 2010 06:25pm
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Quoting: fooboo Your LLC can own vehicles, depreciate equipment, get cheap farm plates for your truck, tax exemptions on gasoline and diesel, exemption from building codes, and a whole lot more.
That's the usual incentive, write offs, and personal protection, but never thought about an insurance coverge angle.
Sure will investigate those avenues, and what sort of 'crop' I'd need to target.
Thanks, fooboo, for that little nugget.
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Anonymous
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# Posted: 6 Dec 2010 12:25am
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Also, as a farm you might even be eligble for one of the many government hand outs that farms get each year. I have a farmer friend who gets thousands each year for not planting tillable land. Each year he claims on a differnt set of acres and only has to not plant it or run his cattle on it.
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bukhntr
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# Posted: 22 Jun 2013 05:20pm
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we have goodville insurance for home and auto, they insure the land with same liability as home and wrote a rider policy for the cabin/shed we have for 10,000 structure and it was only $120 per year more. The thing to remember about the insurance is it is the personal liability that is most important. It protects you from someone suing if they get hurt, even tresspassing on your property.
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241comp
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# Posted: 24 Jun 2013 02:36pm
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I have an umbrella liability policy with State Farm and they had no problem extending it to cover liability on my cabin property.
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jrbarnard
Member
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# Posted: 25 Jun 2013 06:44am
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I have insurance on my land and all the stuff on it, including 75k for the cabin. I think I pay about $94 a month all told, 8 deer stands and feeders etc.
Russ
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JungleJ
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# Posted: 10 Sep 2014 07:41pm
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I have the same problem. The problem seems to be having no water or electricity to the cabin (solar doesn't count). I tried state farm and they said no way. I tried multiple places. Now my car company umbrella policy is being cancelled unless I can get $100,000 of liability insurance on the property. The cabin is only 500 square feet but I don't want to tear it down. Our piece of heaven on 180 acres but not so much fun when dealing with insurance. I am converting it to an LLC but would appreciate if anyone knows of a company that does give liability insurance on property with a cabin without power or water. We also have never had a liability claim in 30 years.
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bobrok
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# Posted: 10 Sep 2014 09:00pm
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Try a local co-op insurance company, maybe the type that specializes in farms and such. I had no trouble getting coverage, but I realize it's different in different states. I'm in NY.
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gsreimers
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# Posted: 10 Sep 2014 09:13pm
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I have no problem with liability. Covering the building however is another issue as there is no way a fire department will help out with a cabin on an island. My agent is still working on it, if I come up with something, I will update.
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toyota_mdt_tech
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# Posted: 10 Sep 2014 09:57pm
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Quoting: fooboo In Kentucky and Florida, the two states where I own land, timber is considered a legitimate farming venture. I would bet that most everyone here on this board has timber on their land and thus the ability to view the entire venture as a farm instead of weekend cabin retreat and reap the benefits of treating it this way
Fooboo, I have 2, 20 acre parcels (contiguous) and I am considered a timber farmer in the states eyes. It gives me huge tax breaks on my 20 acre lots (about $32 each per year) and I have to submit a forest management plan. I hire a professional forester and she handled it. I just renewed my original and sent in the new one (just closed on the 2nd 20 in July) and your LLC is a good idea. I'm going to look into that a bit deeper. Heck, I'm already recognized by the state as a timber farmer.  
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turkeyhunter
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# Posted: 11 Sep 2014 06:15am
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my insurance is through Farm Bureau on my southern camp( as a tree farm)...and land is in Conservation for tax purposes . Cut my tax bill in half....I done this for over 25 years on the taxes.
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toyota_mdt_tech
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# Posted: 11 Sep 2014 08:55pm
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Conservation, is this permanent? Or can you take it out of conservation?
I get about a 90+% tax break just by keeping mine in "timber status"
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knock
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# Posted: 11 Sep 2014 09:38pm
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I don't have water but have electricity. I called around a few places and a company called Foremost extended coverage for a pretty penny (it includes liability also).
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old243
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# Posted: 11 Sep 2014 10:06pm
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We have a hunt camp and land in Ontario. We have liability insurance . We also require all members and guests , to belong to the Ontario anglers and hunters assoc. They provide 3 millon of coverage , for any hunting, fishing and related activities. I think alcohol or drug related events would not be covered. For a group ,I think it is around 38.00 yearly.per member old243
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Helter
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# Posted: 20 Sep 2014 10:09pm
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Chubb didn't have any issue extending coverage to my 18 acres with a boondocked trailer, and based on my conversation with the agent, they would have done the same if it were a disconnected cabin.
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RichInTheUSA
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# Posted: 21 Sep 2014 06:15am
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In Va. Having an LLC is not the same as having a business. You can have one without the other. All the tax exempt benefits only come with an business licence, not with the LLC articles of creation, etc.
Our cabin property is owned by an LLC, but we don't have a business per se. The LLC is then owned by a trust. The trust allows us to avoid probate when passing the land to our heirs after we leave this earthly realm.
Getting insurance required the policy to be in the LLC members name, with a rider for the LLC. I couldn't find an insurance company who would do it any other way.
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