Wind, Snow, Power Outages, Tree Liability and the Dreaded Insurance Claim

With the and the winding down, it does not hurt to examine what our insurance policies would pay for in the big “what if” insurance claim. I would love to hear from you on any real life claims experiences from our recent windstorm a few weeks ago.

What losses did we incur this past month and what did it cost us? Most of my neighbors lost food in their refrigerator and freezer. Trees came down on our homes and cars. Pipes froze and caused damage to hardwood floors. Most of us do not know what our policies cover until a claim happens. 

To find out what our policies cover, auto policies are the simpler one to start with. If a tree falls and damages our car, our insurer charges us our comprehensive deductible and we have our car repaired. This can get tricky because many body shops are full and rental cars are in short supply. The differences in policies are minimal. One policy may include $25 for a rental car and a premium policy will have no set limit and just indicate that it needs to be a similar car. There are also “agreed value” or “new for old” policies for newer or specialty cars.

Let’s flip this around and have your neighbor’s tree fall on your car. Not so simple. Your neighbor’s insurer is likely not going to pay you unless there was something wrong with that tree and you previously brought it to their attention. A tree falling because of a severe storm is an “Act of God” and your neighbor’s homeowner’s policy will likely only pay out if the neighbor has been negligent. Please note that this is meant to be a simplified discussion as tree and root liability can involve arborists and case law that goes back almost 100 years. If there is any dispute, it is best to go under your own policy and let your insurance company work it out.

A good example is the large fir tree that fell on my former Seattle home back on December 25, 1992 at 2:30 p.m. Miraculously, it only damaged my roof, gutters and landscape. The tree in question belonged to the City of Seattle and it was one of the trees I had emailed them photos of in October and told them that they needed to remove these dangerous trees immediately. I had an older roof and split the cost of a new roof and gutter repair. I let their workers spruce up the landscape damage. The City saw that most of the huge firs in the area were diseased and “habitated” those that could come down on a home.  Habitating is when you cut trees as snags for bird habitat. The City was clearly liable and I was reasonable after a “cooling down” period. I needed another one of these after I saw the “habitating”.

What does your homeowner’s policy cover? Policies differ much more than auto policies. Let’s say your own tree falls through your home causing $50,000 damage to your structure and personal property. The $50,000 is your cost to repair and replace everything. Consider the following:

• A higher end policy will pay the full amount minus your deductible.  Nothing is taken for depreciation.
• A basic policy may apply depreciation (actual cash value) to your roof repair and personal property. 
• Replacing damaged landscape is usually not covered if caused by windstorm.
• Many policies will pay you for actual cash value on personal property though you are paying extra for “replacement cost” coverage. Then when you go to replace the item, they will pay you for the additional amount. This is intended so that if your old TV is damaged, you don’t get to pocket more than its depreciated value unless you actually replace it. This makes sense but in practice can be a tedious and frustrating process.
• Most companies will pay reasonable costs for a hotel and additional living expenses in the event of a covered loss. A few will also pay to board your pets.
• A few companies will waive your deductible at losses over $50,000.
• If your neighbor’s tree falls on your home, your own insurer will respond in the same manner. If they consider your neighbor legally liable, they will pursue them and their insurance policy. If they prevail, your deductible will be returned to you at a later time.
• Food spoilage due to power loss is covered anywhere from $500 to $5000 depending upon policy, sometimes with a separate deductible. 
• If you are fortunate enough to own a condo or property in a state like Florida, you likely have wind as an excluded cause of loss. 

Get out that homeowner’s policy! Read your policy to see what is says about wind, collapse from the weight of snow, roof damage, tree removal, food spoilage and debris removal.

Disclaimer: This article is meant to be informational.  Coverage is not intended to be construed and policies differ.