By David Colmans
Striking visuals of the tornado activity across the South this spring were amazing. Neighborhoods and business districts were suddenly transformed to piles of scattered rubble, officially known as debris.
So begins an ongoing discussion between homeowners, rental property owners, business owners, their insurers, and local government. Who is to do what? Who pays for the removal? How much cost does insurance cover? What's the responsibility of local government?
This is an issue to a lesser or greater extent not just with tornadoes, but also with residential and business fires, explosions, the aftermath of flooding, plane crashes and earthquakes just to name a few.
The Insurance Information Institute (I.I.I.) says if a tree hits a home or other insured structure, such as a detached garage, standard homeowners insurance policies provide coverage for the damage the tree does to the structure and the contents in it. This includes trees downed by wind or hail.
It does not matter who owns the tree. If it lands on your home, you should file a claim with your insurance company. After a hurricane or windstorm, trees, shrubs and branches can become projectiles capable of traveling significant distances and can cause considerable damage to property. In most cases, an insurance company is not going to spend time trying to figure out where a tree or other item originated.
In some situations where the felled tree was located on a neighbor's property, the policyholder's insurance company may try to collect from the neighbor's insurance company in a process called subrogation. This sometimes occurs if the tree was in poor health or not properly maintained, according to the I.I.I.
If a tree hits an insured structure, such as your house or garage, there is also coverage for the cost of removing the tree, generally around $500 to $1,000, depending on the insurer and the type of policy purchased. If the fallen tree did not hit an insured structure, there is generally no coverage for debris removal. However, some insurance companies may pay for the cost of removing the felled tree if it is blocking a driveway or a ramp designed to assist the handicapped. Consumers should check their policy to see what is covered and the policy limits before the storm.
Cars damaged or destroyed by falling trees are covered under the optional comprehensive portion of a standard auto insurance policy. This is important because often, those who own older vehicles may drop the comprehensive coverage. Those who rent homes should also note that without comprehensive coverage, they are at risk for the cost of the debris removal on their vehicles as well.
Standard home insurance policies also provide coverage for damage to trees and shrubs due to fire, lightning, explosion, theft, aircraft, vehicles not owned by the resident, vandalism and malicious mischief. Coverage for these disasters is generally limited to up to five percent of the amount of insurance on the structure of the house. Generally, most insurers will limit the coverage to about $500 for any one tree, shrub or plant. Trees and plants grown for business purposes require a separate business insurance policy, according to the I.I.I.
Home-based business owners should discuss this issue with their insurer to understand what coverages they have available regarding business interruption and additional debris removal coverage for a business owner.
When disasters occur, debris often piles up on the side of the road after it has been removed from the property of the landowner. Issues arise over the cost of removal and who is responsible, which may delay the removal of the roadside debris.
Businesses have an entirely different issue regarding debris removal since business insurance policies are available specifically to handle the removal of debris from the business owner's property and from the property of others especially in the case of a tornado, hurricane or other catastrophic incident.
Both homeowners and business owners should work with their insurers before a catastrophe occurs to understand who is responsible for what; what coverages are available regarding debris removal and what the policy limits are for such situations.
Caution. Policyholders may have to reimburse government entities with insurance proceeds earmarked for debris removal if the government entity handles the removal instead of the policyholder engaging a private business. Check with your agent or company about that.
As has been reported following the recent tornadoes, another problem faces affected residents and business owners. The fly-by-night tree removal scammers have been known in Georgia and Alabama to provide preliminary quotes for tree or other debris removal in the hundreds of dollars and then submit a final bill in the thousands of dollars. Insurers and the public have reported tree removal charges of $15,000 up to $80,000.
Be aware that it is best to work with tree removal professionals whom you know personally or by reputation. Seek advice from your insurer as well before engaging any tree removal service. Ask your neighbors and friends what they are paying to make sure you are not paying too much for tree removal.
David Colmans is the executive director of the Georgia Insurance Information Service. Contact him at (770) 565-3806 or by email at firstname.lastname@example.org.