Can You Insure a Property that Doesn't Have Access? (AYU Jan 2024)

Presented by Kay M. Creasman

The short answer is yes, of course. But there will be an exception in both an owners policy and alone policy for access. Most owners and lenders will not purchase or allow collateral to serve as security for a loan when the real estate lacks legal access.

What does the exception look like?

It could state, “Access to and from the property described in this policy is not insured.”

Why would someone purchase property with such an exception?

Generally, this would happen when the purchaser owns the adjacent property that does have access to a public right of way. Access can be gained to the property that's been purchased through the property already owned by the purchaser. In those instances the exception would be changed and could read, “Access to and from the property described in this policy it's only insured as long as the same person owns both this property and the adjacent property (give some type of short legal description here, not a street address, not a tax ID number, although they could also be referenced), which has legal access to a public road.”

Why would someone accept this property as collateral for a loan if there's no legal or physical access? Perhaps it's seller financing. The seller would need to either establish the right of way or accept an exception in the loan policy.