Insurance Questions Sprout Alongside Unwanted Foliage

Question: This is a first, and something I’ve never seen in more than 20 years adjusting property losses.

I have a client who lives in a Philadelphia row home. This client was in the process of redecorating the kitchen and noticed a slight bulge in an interior wall shared by their neighbor. When the insureds removed some of the drywall from a corner, they were surprised by what they found: A 4-inch tree stem or root stretching from the bottom of their first floor just above the basement ceiling straight up through the first and second floors and out of their chimney.

The brick and pointing at the top of the chimney had become dislodged and loose. After a series of windy days, the clients reported the chimney damaged as a loss due to wind.

It is almost impossible to see the top of the chimney due to the small size of the fenced rear yard. But our inspection confirmed what the insured had reported to our office. In between the brick masonry and .drywall was a slightly oozing (sap?) round stem or root.

Allstate denied coverage ‘due to tree growth that was not sudden or accidental, and that has been occurring over the course of weeks, months and years.’

The adjuster’s denial letter continues: “These damages are maintenance issues, which are excluded from coverage…”

Do we have any argument for consideration? The tree grew unseen and hidden until the interior wall showed damage and further investigation revealed damage to the top of the chimney. The sight of this thick trunk or root growing so high brings thoughts of Jack and the Beanstalk!

— Pennsylvania Subscriber

Answer: Most homeowners’ policies will not cover damage that is not ‘sudden and accidental.’

In most cases, an insurance policy will not provide coverage unless the damage was caused by defective equipment or a weather-related ‘Act of God.’

Tree root or stem damage can not be classified as sudden and accidental, defective equipment, or a weather-related Act of God. Unfortunately, this is a maintenance issue and the carrier’s denial of coverage is valid.

Can tree growth be claims as ‘an occurrence’?

Question: Our insured has a HO 00 03 04 91 policy. A liability claim has been presented against the policy. A tree on the insured’s property has been growing and the branches are on the neighbor’s roof. The branches are causing damage to the roof. Would this be considered ‘an occurrence’?

— Massachusetts Subscriber

Answer: In order for this to be an “occurrence,” it must first be an accident.

“Accident” isn’t defined in the policy, so we go to a standard dictionary. Merriam Webster online defines “accident” as: “An unforeseen and unplanned event or circumstance.”

Trees grow slowly, and it’s hard to say that the growth of the tree over the neighbor’s property was unforeseen. But it is probable that each year the tree got closer and closer to the neighbor’s roof, leaving the insured plenty of time to trim the tree before it became an issue.

Therefore, it is not an occurrence and there is no coverage.

Classifying tree damaged caused by ice

Question: We have a carrier coding the ice losses from tree branches breaking off and damaging homes as water losses. They then apply a water loss surcharge. We think the cause of loss should be falling objects or weight of ice and snow, but not water. If ice melted and seeped into a dwelling, it might make sense, but not this.

Can you help?

— Maryland Subscriber

Answer: “Ice” is not at all the same as “water,” which a reading of the homeowners’ forms makes clear. For example, see named peril 11. in the ISO HO 00 03, which covers “weight of ice, snow or sleet which causes damage to property contained in a building.” In the situation you have described, the weight of ice has not only caused damage to the dwelling exteriors — after all, the ice is the efficient proximate cause of the branches’ becoming falling objects — but it can also be viewed as the efficient proximate cause of any damage done to property inside the dwelling. In other words, there is a definite chain of events beginning with the ice storm and ending with the property damage.

Distinguish this named peril from, say, number 12., which applies to “accidental discharge or overflow of water…” The policy drafters clearly differentiate between water and its frozen form; the insurer is ignoring the plain policy language by coding these losses as “water losses.”

Sewer line tree root intrusion

Question: Is tree root intrusion to an underground sewer line considered a fortuitous event on a commercial property policy with a special causes of loss form? The tree root intrusion appears to be occurring over a long period of time and was not detected until the insured started to experience backups. There is no ensuing water damage due to the backups.

— California Subscriber

Answer: The situation you describe is not a fortuitous event but a maintenance issue that would not be covered by a commercial property policy.

When tree limbs attack

Question: We provide homeowner’s coverage to our insured under AAIS Form 3 Ed 2.0. The Dec Page indicates the deductible is $1,000 except for the perils of wind and hail. For these perils, the deductible is 2% of coverage A limit or $3,500.

Our insured reported that during a recent wind/rain event, a limb fell from an oak tree, damaging the insured’s roof and fascia board. Our question concerns which deductible would apply: the $1,000 or the 2%? It appears obvious the limb would not have fallen in the absence of the wind event, but we could not say this with 100% certainty, especially as this home stood in the path of Hurricane Katrina in 2005.

In the past, we have seen policies that exclude wind damage to fences, outdoor equipment, awnings, etc. In similar situations, under those policies, it was argued that the cause of loss was not wind but falling objects.

We would like your thoughts.

— Louisiana Subscriber

Answer: Couch on Insurance 153:9 highlights in its discussion on windstorms that in some jurisdictions, a windstorm is any wind capable of damaging the insured property, either by its own unaided function or by projecting some object against the property. While the tree survived the Katrina winds, it’s older now. If the tree has been dead for 6 months and the insured just hasn’t had it removed, or if the tree is infested with an insect that damaged it to the point that a limb would spontaneously fall off, we’d say the limb fell and the regular deductible would apply. However, if the tree is in good condition, we’d say the wind caused the tree limb to fall, and that the loss was due to wind.

This really hinges on the condition of the tree and the amount of wind. You might have a tree expert look at the tree to determine if it’s likely that the branch just fell or if the fall was caused by wind. Then you can determine which deductible to apply.

Posted 9:00 AM

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