When a tree falls, is there debris removal coverage?

An outdoor property coverage extension expands coverage to trees and tree debris removal expenses, but only for such specific causes of loss as fire, lightning, explosion, riot or civil commotion, or aircraft. (Photo: iStock) Analysis brought to you by the experts at FC&S Online, the unquestioned authority on insurance coverage interpretation and analysis for the P&C industry. To find out more — or to have YOUR coverage question answered — visit the National Underwriter website, or contact the editors via Twitter: @FCSbulletins. Question: After a windstorm passed through the insured’s premises, the covered property did not suffer any damages. However, the insured must incur in debris-removal expenses. Most of the debris is made up of trees. 1) Under forms CP 0010 (10 12) and CP 0017 (10 12), is the expense covered even if the covered property didn’t suffer any loss or damage? 2) What would the applicable deductible (if any) be if the insured has a $250 deductible for Special Form except 2% windstorm deductible for building and business personal property? 3) If the insured has additional debris removal insurance (with a $50,000 limit), is coverage provided and what’s the applicable deductible? — Puerto Rico Subscriber Answer: 1) Debris removal under CP 00 10 10 12 extends property coverage to include the expense of removing debris only of covered property caused by or resulting from a covered cause of loss. Under Property Not Covered, item q.(2) excludes trees, shrubs and plants from coverage, except as provided under the coverage extensions. Related: Hail, water and wind are top auto perils between March and May The outdoor property coverage extension expands coverage to trees and tree debris removal expenses, but only for such specific causes of loss as fire, lightning, explosion, riot or civil commotion, or aircraft. Therefore, removal of debris from trees blown by a windstorm is not covered unless the blown trees damage other covered property insured against windstorm. If the trees did not damage other covered property, then the costs of removing the tree debris from covered property are part of the costs to effect repairs, not debris removal costs. If there is debris removal from other covered property, then common adjustment practice might allow for payment of removing not only the debris of the covered property, but also other debris involved in the loss on the insured property. 2) If the trees did not damage other covered property, then there is no coverage. Therefore, the windstorm or hail deductible would not apply. If there was damage to other covered property, then the 2% windstorm deductible would apply separately to each damaged building; to the personal property at each building; and to loss or damage of personal property in the open. The deductibles would apply to each windstorm occurrence. 3) The Debris Removal Additional Insurance CP 04 15 10 12 provides an additional amount for the coverage in CP 00 10. It does not provide additional coverage, just a higher limit. The applicable property or windstorm deductible would apply since this is not separate coverage, but simply an increase of the limit provided under CP 00 10. Related: Avoid getting blown away by wind damage claims Removing a tree that lands on a roof Question: On the HO 3 form, the policy provides $500 for tree debris removal per tree with $1,000 total coverage per occurrence. The question is: Does the HO 3 policy cover the cost to remove the tree or tree limbs from the “covered structure” separate from the cost to remove the tree “debris” from the “residence premises” assuming the tree landed on building? Consider this hypothetical tree service invoice, without consideration of deductible: Remove tree limbs from roof of structure: $250 Cut tree limbs and tree trunk into small pieces: $3,000 Wood Chipper to chop tree: $500 Remove wood chips (including truck and disposal fees): $450 TOTAL INVOICE: $4,200 Would the company owe $500 (debris removal limit for one tree) or would the company owe $750.00 (debris removal limit plus cost to remove tree from structure)? — North Carolina Subscriber Answer: We’ve always been of the opinion that removing the tree from the structure is part of the repair of the structure and is separate from debris removal. The structure cannot be repaired until the tree and other debris is removed. Debris removal is intended to remove the tree from the yard to get it out of the insured’s way, and to get it off of the driveway or away from blocking other access to the property. Removing a tree from a damaged structure is part of the repair of that structure and is separate from debris removal. Here, Pastor Michael Williams cuts branches from a wind blown tree on Monday, May 1, 2017, that fell on a family members home in Durant, Miss. Williams and members of his church helped remove tree debris from the structure. (AP Photo/Rogelio V. Solis) Debris removal on a dwelling property 3 form Question: The Lloyd’s of London representative is telling me the debris removal extension on the DP3 form only provides coverage within policy limits. My interpretation is the extension is 10% additional coverage not to exceed $25,000. Who is correct? DEBRIS REMOVAL ENDORSEMENT THIS ENDORSEMENT CONTAINS PROVISIONS WHICH MAY LIMIT OR PREVENT RECOVERY UNDER THIS CERTIFICATE FOR LOSS WHERE COSTS OR EXPENSES FOR DEBRIS REMOVAL ARE INCURRED. Nothing contained in this Endorsement shall override any Seepage and/or Pollution and/or Contamination Exclusion or any Radioactive Contamination Exclusion or any other Exclusion applicable to this Certificate. Any Provision within this Certificate (or within any other Endorsement which forms part of this Certificate) which insures debris removal is canceled and replaced by the following: 1) In the event of direct physical damage to or destruction of property, for which Underwriters hereon agree to pay, or which but for the application of a deductible or underlying amount they would agree (hereinafter referred to as ‘Damage or Destruction’), this Certificate also insures, within the sum insured, subject to the limitations and method of calculation below, and to all the other terms and conditions of the Certificate, costs or expenses; (a) which are reasonably and necessarily incurred by the Assured in the removal, from the premises of the Assured at which the Damage or Destruction occurred, of debris which results from the Damage or Destruction; and (b) of which the Assured becomes aware and advises the amount thereof to Underwriters hereon within one year of the commencement of such Damage or Destruction. 2) In calculating the a mount, if any, payable under this Certificate for loss where costs or expenses for removal of debris are incurred by the Assured (subject to the limitations in paragraph 1 above): (a) the maximum amount of such costs or expenses that c n be included in the method of calculation set out in ( b) below shall be greater of U .S. $ 25,000 ( twenty-five thousand dollars) or 1 0% ( ten percent) of the amount of the Damage or Destruction from which such costs or expenses result; and (b) the amount of such costs or expenses as limited in (a) above shall be added to: (i) the amount of the Damage or Destruction; and (ii) all other amounts of loss, which arise as a result of the same occurrence, and for which Underwriters hereon also agree to pay, or which but for the application of a deductible or underlying amount they would agree to pay and the resulting sum shall be the amount to which any deductible or underlying amount to which this Certificate is subject and the limit (or applicable sub-limit) of this Certificate, shall be applied. — Wisconsin Subscriber Answer: The loss settlement provision states that the settlement is the greater of $25,000 or 10% of the amount of damage or destruction from which the loss results. For example, if the loss was $100,000 then payment would be for the greater of $10,000 (10 percent of the loss) or $25,000. This overrides the policies standard debris removal clause, and states that the amount of such coverage shall be added to (emphasis added) the amount of damage or destruction and all other amounts of loss less the deductible. Therefore, the debris coverage should be above the coverage A limit. It’s not really clear, and the insured always get the benefit of the doubt. Debris removal, demolition and resulting hole Question: The insured suffered a total loss to their residence. The insurance company has agreed to cover the cost of demolition, however, they refuse to pay for the cost to fill and grade the hole left by the demo and debris removal. The insured is insured under a HO 0005 (10/00). The insurance company has taken the position that the fill is a claim for land and land is excluded under the policy. It is our position that the “land” exclusion applies to claims for damages to land. We are not claiming damage to land; rather we need to back fill the hole as part of the debris removal. I feel it should be covered for several reasons. (1) the land exclusion does not apply to fill (2) the insured is required to fill in the hole under the policy to protect the property from further damage (i.e. someone falling in the hole and getting injured resulting in a liability claim) and (3) because filling in the hole is required by local law and ordinance. The insured does have coverage for law and ordinance. — Michigan Subscriber Answer: You are right in that the exclusion for land is for damage to land, not ensuing damage that is part of the repair. The building must be torn down before it can be reconstructed, and the hole caused by the demolition must be filled. This is all part of restoring the insured to his original position, the principle of indemnity. If a family of woodchucks had burrowed under the ground to where it collapsed leaving a gaping hole that would be excluded; that’s damage to the land. Analysis brought to you by the experts at FC&S Online, the unquestioned authority on insurance coverage interpretation and analysis for the P&C industry. To find out more — or to have YOUR coverage question answered — visit the National Underwriter website, or contact the editors via Twitter: @FCSbulletins. See also: Know these covered losses and exclusions after a collapse It’s business, it’s not personal (property)


About John Fagan

John is a Jacksonville native who grew up on the First Coast. He graduated from Bishop Kenny High School in 1975 and went to college at Florida State University where he completed a 4-year program in 3 years. John graduated from the Florida State University College of Business in 1978 and went straight into Florida State University College of Law. While in law school, John earned a position on the prestigious Law Review Board serving as its Business Editor. As a law student, John studied in the Oxford program. He also interned with the Florida Legislature working in the Florida House of Representatives Criminal Justice Committee. John was admitted to the Florida Bar in 1981. John began his legal career as a law school intern in the State Attorney's Office in Jacksonville in 1981. After his internship, legendary State Attorney Ed Austin hired John as a full-time Assistant State Attorney for the Fourth Judicial Circuit (Clay, Duval, and Nassau Counties). As a prosecutor, John tried jury and non-jury trial on charges ranging from DUI to Murder. In 1983, John moved from the State Attorney's Office to begin his career in private practice. He has practiced law for 30 years on the First Coast. For the last 20 years, John and his family have made Clay County their home. John limits his practice to personal injury and disability cases. While there are many fine attorneys in Clay County, John is one of only a few Clay County attorneys who limit their practice to personal injury and disability cases. John takes pride in helping clients resolve injury claims in ways that avoid the stress, uncertainty, and the expense of unnecessary litigation. Professional Activities John is the past President of the Clay County Bar Association and has served on the Board of the Clay County Bar Association from 2009-2013. He is an active member of the Florida Bar, and the Federal Bar of the Middle and Southern Districts of Florida. He is also a member of the American Association of Justice, the Florida Association of Justice, the National Organization of Social Security Claimants' Representatives, and the National Organization of Veterans' Advocates. Service to the Community John is involved in the Clay County Community serving as a member and Director of the Rotary Club of Orange Park, of the Clay County Bar Association, and the Putnam County Bar Association.
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