Coverage relating to trees and other greenery on a property can vary widely depending upon the specific circumstances of an incident. Some policies may include limited coverage, while others exclude it. Depending on the cause of a fallen tree and if it was healthy or dead at the time it fell, coverage for property damage or bodily injury may or may not be available. Common losses include landscaping damaged in a windstorm, trees falling on nearby objects, and pedestrians who are in the wrong place at the wrong time.
What type of damage could be excluded?
Bodily Injury & Property Damage
Some examples of Property Damage are:
- Damage to outdoor furniture, shrubs, or plants on the investor’s premises caused by a fallen tree
- Damage to an investor’s in-ground pool caused by tree roots
- Damage to trees, shrubs, or plants caused by a storm
Some policies may offer limited coverage for damage to trees, shrubs, and plants, while others exclude coverage altogether through an endorsement in the policy.
If coverage is included, an insurer may not offer to pay more than $250 per plant damaged and may limit the total reimbursement for damaged plants to $1000. Some policies also restrict the Causes of Loss to 5 perils: Fire, Lightning, Explosion, Riot or Civil Commotion, and Aircraft.
If your investor client’s property is in a coastal area and damage to trees or other greenery occurs in a Named Windstorm, they will likely need Named Windstorm coverage for those items to be covered. Named Windstorm is coverage specific to damage that occurred during a hurricane or tropical storm and is typically purchased separately. It is NOT the same as Wind and Hail coverage, which covers items damaged in tornadoes or thunderstorm events.
Liability Issues
Property Damage, as it relates to Liability coverage, is damage the investor may be held responsible for if their property injures another person or causes damage to another person’s property. The investor’s liability typically depends on the specific circumstances of the event.
Some examples of Property Damage on the Liability side could be:
- An investor’s tree falling on their tenant’s property- such as a jungle gym in the backyard, or the tenant’s car
- An investor’s tree falling on the neighbor’s house, fence, or car
Bodily Injury under the Liability category is “any type of injury, sickness or disease sustained by a person, including death,” resulting from the outdoor property. More common than one might think, we have seen pedestrians injured and killed by falling trees or tree limbs.
Could your investor client be held responsible for damage to another’s property, or an injury caused by one of their trees falling?
The short answer is – it depends. If a tree falls because of an “act of God,” the investor will typically not be held responsible for the damage. An “act of God” is defined as an “injury due directly and exclusively to natural causes which could not have been prevented by the exercise of reasonable care and foresight.” A healthy tree falling due to a combination of overly wet soil and intense winds, or similar circumstances, for example.
However, if the investor is given notice that a particular tree is a hazard and they don’t take steps to eliminate that hazard, they may be found responsible (negligent) for the damage that the fallen tree caused. Furthermore, even if your investor client isn’t found to be negligent, they still may end up with legal fees from having to prove their innocence. Insurance policies can include clauses that remove their responsibility to defend the investor, for example: “Where there is no coverage under this policy, there is no duty to defend.”
What happens if the investor’s tree falls on a neighbor’s house?
If an investor’s tree falls on a neighbor’s house (or fence, car, etc.) as a result of an “act of God”, that neighbor would need to contact their insurance company to seek reimbursement for any repairs they may need to make. As the investor was not responsible for the tree falling, their policy will not be the one to pay out. However, if it is determined that the investor neglected to cut down a hazardous tree that then damages a neighbor’s property, the investor’s Liability policy may step in to provide coverage for the damage caused as a result of the investor’s neglect.
What does the technical lingo for this exclusion look like in the investor client’s policy?
Sample policy language may look like this:
When Limited Coverage is Available for Damage to Trees, Shrubs, or Plants
“Outdoor Property
The most we will pay for loss or damage under this Extension is $1,000, but not more than $250 for any one tree, shrub, or plant. These limits apply to any one occurrence, regardless of the types or number of items lost or damaged in that occurrence.”
If Coverage is Excluded for Damage to Trees, Shrubs, or Plants
“Property Not Covered
Covered Property does not include:
- Land (including land on which the property is located) or water;
- The following property when outside of buildings:
(1) Lawns, trees, shrubs, or plants (other than lawns, trees, shrubs, or plants which are a part of a vegetated roof);”
If Coverage is Excluded for Damage a Tree or other Greenery does to Property on the Premises
“This insurance does not apply to…” Property damage” to:
(1) Property you own, rent, or occupy, including any costs or expenses incurred by you, or any other person, organization, or entity, for repair, replacement, enhancement, restoration, or maintenance of such property for any reason, including prevention of injury to a person or damage to another property;
(2) Property loaned to you
(3) Personal property in the care, custody, or control of the insured;
*As insurance policies may vary, investors should check their own policy for language specific to the covered property.
What can this type of damage cost the investor?
While the cost of a jungle gym or trampoline ranges from a couple hundred to a couple thousand dollars, a dead tree can cause tens of thousands of dollars in damage to an investor’s or their neighbor’s property. The greater expense is if someone is injured. A falling tree could cause broken bones, paralysis, or even death. These types of injuries could produce expenses that last years into the future.
How can investors protect themselves?
First, they should know what is in their policy: Your investor clients must read the sections of their insurance policy that address trees, shrubs, and landscaping. It is important that investors know both what they are and are not covered for. If you and your investor client don’t understand something or have questions, don’t hesitate to contact your Sales Manager, who would be happy to help!
Investors should inspect trees on an annual basis. Shrubs and plants may need more regular maintenance: Keeping greenery trim and neat should be an investor’s top priority on an exterior maintenance list. Grass, vines, and shrubs can quickly get out of control if they are not “tamed” regularly. Keeping up with trees can prevent costly damage. Maintaining a tidy yard, especially on vacant properties, can help reduce the risk of vandalism. In addition to regular maintenance, investors should check trees after any large storm. Broken limbs may need to be trimmed immediately to avoid a loss.
Investors may hire a licensed and insured arborist to correct any large tree issues: Any arborist an investor hires should be certified by an organization such as the International Society of Arboriculture or the Tree Care Industry Association. They will also need to have the appropriate liability insurance. To find an arborist, investors can call TCIA at 800-733-2622 or run a Zip Code Search on www.treecaretips.org. ISA-certified arborists can be found through a search tool at www.isa-arbor.com.
Investors should ensure tenants understand their responsibilities when it comes to the lawn: Though any tree-trimming responsibilities will likely fall to the investor as the owner of the property, tenants must know what they are responsible for when it comes to the outside of the property. Investors should specify in the lease what tenants are also not allowed to do at the property! At the bare minimum, tenants should know to contact the investor if they see any hazardous conditions. Investors should be sure tenants have an easy way to contact themselves or the property manager if a tree is damaged or damages the property (or the neighbor’s property) during a storm.
