For each category of property right you choose to insure (conservation easement, trail easement, fee land, etc.), you must list every parcel. If you leave out parcels owned by some landowners, it prevents Terrafirma from accurately determining how much your insurance should cost. Worse, it could cause problems later on when you try to submit a claim.
Counting is important. Terrafirma calculates premiums based on the total count of parcels listed in the application. More parcels means a higher total premium so it pays to count carefully.
Generally speaking, every deed the land trust has for property it is insuring counts as one parcel, regardless of contiguity. Exceptions are as follows:
1. If the landowner exercises a property division right, the subdivision counts as a separate parcel and must be listed separately. However, if the subdivision does not have a separate owner, it does not need to be listed separately. An example of this would be where the landowner deeds part of the property to himself as the sole owner of an LLC.
2. If you legally merge separate easements into one deed with one property owner, they now count as one parcel even if they weren’t one parcel before. This is true even if the underlying property is not contiguous.
3. Fee-owned land comprised of multiple deeded properties counts as one parcel if the deeded properties satisfy both of the following conditions:
a. The property owner of each deeded property is the same entity. The owner is usually your land trust but could also be a partnership of your land trust and another organization.
b. The combined parcel must form a contiguous conservation reserve operated as a single unit.
4. You may count multiple deeded conservation easements as one parcel if they satisfy all of the following conditions:
a. The same land trust or the same set of co-holders holds each conservation easement.
b. The same landowner owns all underlying property.
c. The land covered by the conservation easements is contiguous.
d. Each conservation easement is substantively identical in terms of restrictions and permitted uses. This does not mean that the language of each easement must be identical. Rather, it means the conservation values must be fairly similar such that the property can be conserved as a single unit.
Land trusts sometimes have many small lots with different owners under the same easement. The Accreditation Commission lets land trusts group these lots into one parcel, under one easement.
With Terrafirma, however, properties under separate easements may only be combined into one parcel if they have the same owner, are contiguous, and have the same conservation values; under the same easement they must have the same owner. This is because the more the easement is spread across separately owned parcels, the greater the risk that you’ll have a lawsuit. Therefore, Terrafirma spreads that risk with additional premiums based on the number of separate landowners. This decision is based on historical observation and actuarial verified data showing significantly more risk.