After the recent hurricanes, wind storms and wildfires, property owners have been cleaning up debris from downed trees and asking “What's covered and what's not?”
Question: On the HO 3 form, the policy provides $500 for tree debris removal per tree with $1,000 total coverage per occurrence.
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 the building? For example, a tree service might charge $250 to remove tree limbs from the roof, $3,000 to cut the tree limbs and trunk into small pieces, $500 to rent the wood chipper to chop the tree, and $450 to remove the wood chips, including any disposal fees, for a total of $4,200.
Would the insurance company owe $500 (debris removal limit for one tree) or would the company owe $750 (debris removal limit plus the cost to remove the tree from structure)?
— North Carolina Subscriber
Answer: Removing the tree from the structure is part of the repair of the structure and is separate from debris removal. The structure can't 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 the driveway or away from blocking other access to the property.
Question: The homeowners suffered a total loss to their residence. The insurance company has agreed to cover the cost of demolition, but they refuse to pay for the cost to fill and grade the hole left by the demo and debris removal. The homeowners are 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 homeowners are required to fill in the hole under the policy to protect the property from further damage (that is, someone falling in the hole and getting injured resulting in a liability claim); and (3) Filling in the hole is required by local law and ordinance. The homeowners do have coverage for law and ordinance.
— Michigan Subscriber
Answer: You're right in that the exclusion for land is for damage to land, not ensuing damage that's 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 the original position. If woodchucks had burrowed under the ground so it collapsed leaving a gaping hole, that would be excluded; that's damage to the land.
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Christine G. Barlow, CPCU
Christine G. Barlow, CPCU, is Executive Editor of FC&S Expert Coverage Interpretation, a division of National Underwriter Company and ALM. Christine has over thirty years’ experience in the insurance industry, beginning as a claims adjuster then working as an underwriter and underwriting supervisor handling personal lines. Christine regularly presents and moderates webinars on a variety of topics and is an experienced presenter.
