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JohnK3
(Pennsylvania)

Posts:438

08/02/2008 9:56 AM
This is a good one. Back in April, a few months after we went self-managed, I decided to look through our General Liability insurance policy for items our former PM might have missed. First thing I found was that our fountain had no insurance for damage or loss, so we added a rider for $5K. Next up was tree loss, damage and removal. Appeared we had $5K for loss, $500 for removal. We decided we wanted more for loss, up to, instead of 5, $10K for wind and flood. Dropped agent an e-mail. Agent wrote back that we could up to $10K, but that the coverage was only for fire, lightning, riot, etc., but not wind or flood. I wrote back that we were not interested in riot, etc., only flood and wind, and if that was not included, we had no need for extra coverage. But if they were included, please advise. Agent wrote back, and I quote: “wind is covered. flood is not. I will have it issued with the endorsement. If you decide against it, we can remove it.” I wrote back, and I quote: “We’ll take the wind. Thanks.” No further e-mails. The rider was issued and we paid the extra premium. Can you see what’s coming? 27 July, big storm rolls through and takes out a 48 foot maple, 24 inch trunk diameter. I e-mailed Agent with the details and asked how to begin the claim process. Agent writes back saying oh-so-sorry, wind damage/loss is not covered, then repeats the fire, lightning, riot, etc. language, and that seeing wind isn’t covered, neither is removal. Should be interesting bringing this to conclusion, eh? Esp. as I have those e-mails tucked safely away in my AOL filing cabinet, copies of which I’ll forward to Agent next week. Your thoughts would be appreciated. Thank you in advance.

JohnB7
(South Carolina)

Posts:41

08/02/2008 10:00 AM
did you not read the 'endorsement' ?

SusanW1
(Michigan)

Posts:2121

08/02/2008 10:13 AM
That's pretty standard. If the tree would have landed on a garage, insurance would cover. But a tree being just blown down is not.

BradP
(Kansas)

Posts:1742

08/02/2008 10:17 AM
John: I guess I am not big into insurance but to me I don't see how an insurance company could logistically give you a 10k policy on a tree for wind damage without a really high premium. As another person said whatever your endorsement said is what is going to rule here, you should have reviewed that when issued.

JohnK3
(Pennsylvania)

Posts:438

08/02/2008 10:22 AM
No endorsement was sent to us. Just a bill with the notation OPTION TP ADDED. Option TP in the body of the policy reads: "The Limit of insurance for Trees, Plants, Lawns and Shrubs under Extensions of Coverage is changed to the amount shown in the Declarations for this Option TP." The riot, etc. language appears elsewhere in the policy. Our position? We relied on what Agent wrote: "wind is covered. flood is not. I will have it issued with the endorsement. If you decide against it, we can remove it.” because as we wrote, we were not interested in a change unless wind was covered. Wind is covered sounds pretty unambiguous. I will have it issued with the endorsement sounds pretty unambiguous. But this could make for a great bar exam essay question. We've got contract law, agency law, insurance law...plus a pair of arguable positions.

SusanW1
(Michigan)

Posts:2121

08/02/2008 10:28 AM
The policy would only cover IF the tree caused damage to a structure. It is NOT coverage on trees!!!

JohnK3
(Pennsylvania)

Posts:438

08/02/2008 10:41 AM
Susan, No. TP is a specific, optional coverage as I noted above. It covers loss of trees, etc., not related to damage to anything else, such as a building. BTW, the $10K is cumulative and limited, as in, if 50 trees were destroyed, the max coverage is $10K. Earlier this year, we replaced a dead (no trauma, just up and died) 4" trunk, 12 footer. Cost? $400! That's why we decided to add tree loss coverage in the event we lost a few dozen in one event from wind.

MaryA1
(Arizona)

Posts:2161

08/02/2008 11:06 AM
Posted By JohnK3 on 08/02/2008 10:41 AM Susan, No. TP is a specific, optional coverage as I noted above. It covers loss of trees, etc., not related to damage to anything else, such as a building. BTW, the $10K is cumulative and limited, as in, if 50 trees were destroyed, the max coverage is $10K. Earlier this year, we replaced a dead (no trauma, just up and died) 4" trunk, 12 footer. Cost? $400! That's why we decided to add tree loss coverage in the event we lost a few dozen in one event from wind. IMO, you are only covered for what the initial policy and any endorsements state. If the agent told you one thing and it was not included on the endorsement, you should have called the co. at that time to get it straightened out. IMO, regardless of what the agent tells you, it's what's on the initial policy plus any endorsements that counts. Also, I would have tried to call the co. instead of talking to the agent.

JohnK3
(Pennsylvania)

Posts:438

08/02/2008 11:22 AM
Mary, How would we know what was included in the endorsement (including variances, additions) if we were not provided one? Yes, the language in the policy is what the language is. So are representations made by the insurer's Agent. He's the expert, we're not. We didn't draft the policy, they did. In this instance, we have a written statement from Agent that "wind is covered" and "I will have it issued with the endorsment." C'mon, guys. Somebody out there needs to take our side of this, lest I retire to my bed in a slough of despond.

JohnK3
(Pennsylvania)

Posts:438

08/02/2008 11:27 AM
My prediction when all the dust settles: Insurer will pony up, or Agent's E&O coverage will pony up. At the end of the day, the world will keep on turning, whatever the result.

MaryA1
(Arizona)

Posts:2161

08/02/2008 12:26 PM
Posted By JohnK3 on 08/02/2008 11:22 AM Mary, How would we know what was included in the endorsement (including variances, additions) if we were not provided one? Yes, the language in the policy is what the language is. So are representations made by the insurer's Agent. He's the expert, we're not. We didn't draft the policy, they did. In this instance, we have a written statement from Agent that "wind is covered" and "I will have it issued with the endorsment." C'mon, guys. Somebody out there needs to take our side of this, lest I retire to my bed in a slough of despond. Anytime a change is made to an ins policy an endorsement outlining that change and showing the increased amount of the policy should be recieved. If you didn't receive this endorsement, you should have called the ins. co. Considering the fact that you have a written statement from the agent, IMO, you should be able to use that as justification that the damage should be covered. I would be talking to the ins. company from now on and perhaps looking for a different agent. He either told you something is covered that the ins. co does NOT cover. Or he told you it was covered but failed to inform the ins. co. which may be why you didn't recieve an endorsement adding this coverage. I want to take your side on this, John. I just think you should have called the ins co. especially when the agent seemed to be giving you the run around about whether or not wind was covered. If I think a co. rep. is acting like he doesn't know what he's talking about, I'm not afraid to go to the higher ups and find out what's going on. Frankly, I don't bother with ins. agents, I go straight to the co. with my questions.

BradP
(Kansas)

Posts:1742

08/02/2008 2:33 PM
John...I will bite, sometimes it is fun being the dissenting voice anyway. My question to all is what would a prudent person do and expect? If your agent tells you it is covered and you tell them you want it and you get a change in your policy and your premium most people assume you got what you asked for. Honestly raise your hand if you have read word for word your entire auto or homeowners insurance policy. The smoking gun on this will be the emails...if they say what John said they did how can the insurance company deny this. Their client asked for and was told a change was made, that is a form of a written contract since it was on paper. Honestly, what more does a client have to do? Any insurance agent is an agent of the company, they are authorized to make decisions for the company, since an agent said it and wrote it done, it is as good as a company writing it down. I think they have a good shot to win this one. Should they have read their endorsement and scrutinized it with a fine tooth comb...perhaps, but a prudent person in this case would assume they are covered based on the agents emails and the information we have been given.

RobertR1
(South Carolina)

Posts:2076

08/02/2008 3:04 PM
John, I applaud you with enthusiasim. Right, wrong, I don't know, but that never stopped Don Quixote (however you spell it) and trusty Sancho. You may be tilting at trees and he faced windmills, but give em hell. Remember ol Sir Don did not acknowledge defeat. There was no such word.

JohnB7
(South Carolina)

Posts:41

08/02/2008 4:11 PM
i hereby raise my hand i would not trust an insurance agent as far as i could throw him with one pinky i would remind everyone of a standard legal principal: CAVEAT EMPTOR would a 'prudent' b/o/d officer have checked? you betcha ! ps. did you have your home inspected before purchase ? why ?

MaryA1
(Arizona)

Posts:2161

08/03/2008 7:59 AM
Posted By BradP on 08/02/2008 2:33 PM John...I will bite, sometimes it is fun being the dissenting voice anyway. My question to all is what would a prudent person do and expect? If your agent tells you it is covered and you tell them you want it and you get a change in your policy and your premium most people assume you got what you asked for. Honestly raise your hand if you have read word for word your entire auto or homeowners insurance policy. The smoking gun on this will be the emails...if they say what John said they did how can the insurance company deny this. Their client asked for and was told a change was made, that is a form of a written contract since it was on paper. Honestly, what more does a client have to do? Any insurance agent is an agent of the company, they are authorized to make decisions for the company, since an agent said it and wrote it done, it is as good as a company writing it down. I think they have a good shot to win this one. Should they have read their endorsement and scrutinized it with a fine tooth comb...perhaps, but a prudent person in this case would assume they are covered based on the agents emails and the information we have been given. Brad, First of all, I think I'm a very prudent person. What would I have done? I would have called the ins co when I received the bill. Reason stated below. Secondly, an endorsement was never received, only a bill. But this is what the bill said: "Just a bill with the notation OPTION TP ADDED. Option TP in the body of the policy reads: "The Limit of insurance for Trees, Plants, Lawns and Shrubs under Extensions of Coverage is changed to the amount shown in the Declarations for this Option TP."" This means only the limit of insurance coverage was increased. Nothing is mentioned about adding wind damage to the coverage. This is why I would have called the ins. co. directly. But I do agree with the rest of your response. The ins. co. should honor the claims made by their agent. The proof is in the emails!

JohnB7
(South Carolina)

Posts:41

08/03/2008 8:55 AM
Posted By MaryA1 on 08/03/2008 7:59 AM Posted By BradP on 08/02/2008 2:33 PM John...I will bite, sometimes it is fun being the dissenting voice anyway. My question to all is what would a prudent person do and expect? If your agent tells you it is covered and you tell them you want it and you get a change in your policy and your premium most people assume you got what you asked for. Honestly raise your hand if you have read word for word your entire auto or homeowners insurance policy. The smoking gun on this will be the emails...if they say what John said they did how can the insurance company deny this. Their client asked for and was told a change was made, that is a form of a written contract since it was on paper. Honestly, what more does a client have to do? Any insurance agent is an agent of the company, they are authorized to make decisions for the company, since an agent said it and wrote it done, it is as good as a company writing it down. I think they have a good shot to win this one. Should they have read their endorsement and scrutinized it with a fine tooth comb...perhaps, but a prudent person in this case would assume they are covered based on the agents emails and the information we have been given. Brad, First of all, I think I'm a very prudent person. What would I have done? I would have called the ins co when I received the bill. Reason stated below. Secondly, an endorsement was never received, only a bill. But this is what the bill said: "Just a bill with the notation OPTION TP ADDED. Option TP in the body of the policy reads: "The Limit of insurance for Trees, Plants, Lawns and Shrubs under Extensions of Coverage is changed to the amount shown in the Declarations for this Option TP."" This means only the limit of insurance coverage was increased. Nothing is mentioned about adding wind damage to the coverage. This is why I would have called the ins. co. directly. But I do agree with the rest of your response. The ins. co. should honor the claims made by their AGENT. The proof is in the emails! Are you sure you're dealing with an agent and not a broker ?! A broker's word is NOT worth the paper it's written on ! An agent's MAY be worth something providing he was hired by the insurance co. or it's licensed franchisee!

MaryA1
(Arizona)

Posts:2161

08/03/2008 9:34 AM
John, Good point! Which reinforces my belief that it's always best to go right to the source; in this case, the ins. co.

JohnK3
(Pennsylvania)

Posts:438

08/03/2008 1:52 PM
I'm pretty sure SF has a "captive" agency force, as in, the agents only rep SF. But captive or not, our Agent speaks on behalf of SF and can bind them (obviously) to contracts between SF and insureds. I've drafted a detailed letter to Agent including all of the e-mail exchanges, and asking for his thoughts. But whatever his response, unless Agent/SF agrees the loss is/will be covered, he'll no longer be who we'll be dealing with (on this matter) as when the rubber meets the road, Agent (and his e-mails) are the pivotal issue. Plus, I don't take this personally and don't want him to. Look - the guy might have made a mistake. Probably made a mistake in, IMO, binding SF to coverage that perhaps SF wouldn't provide for $33 or $333 or $3,333. Okay. But this is just a business transaction. It won't cost him his gig if we prevail, and it won't destroy our HOA if SF prevails. I mean, how much is on the line here? Maybe $3,500 for removal and replacement costs? Drop in the old bucket. Thank you for your comments, pro and against. Helps keep things in context. Keep 'em coming.

SusanW1
(Michigan)

Posts:2121

08/04/2008 4:18 PM
Well, I am gong to get every one of my trees - and maybe even the grass - covered by insurance! Then hope they all die!!

RobertR1
(South Carolina)

Posts:2076

08/04/2008 4:54 PM
Susan, Make sure you get an exclusion from: "Plain ol just dying, you know, that ol tree just up and died." Also think about hiring a Tree and Grass Hit Squad. Get it all planted and looking good, then one late evening get them in to perform their dasterdly deeds. Next day go get your settlement, give hlf to the hit squad and spend next winter in Hawaii! Alohoa!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

JohnK3
(Pennsylvania)

Posts:438

09/13/2008 10:36 AM
Update So I sent my detailed letter to our Agent. Agent suggested he have an Adjuster come out to see if lightning was the cause of the loss, in which case the loss would be covered. Adjuster paid a visit, then called me a few weeks ago to say the claim would be denied as the obvious cause was wind. Letter to follow. I suggested to Adjuster she review the letter I sent to Agent. Adjuster replied her part in the process was over, and if I had additional issues, I should contact Agent. I didn't; not because I didn't have additional issues, but because I wanted to discuss the matter with my fellow Board members later this month at our meeting. No letter from Adjuster was received. Yesterday, Adjuster called and informed me Claims Mgmt., after reviewing my letter, had reversed her denial and that BOTH removal & replacement would be covered...and asked I get some estimates so we could put this puppy to bed. Oh, and by the way, Adjuster added, no future wind loss would be covered. My take away? I'll post again after the check(s) clear!

MaryA1
(Arizona)

Posts:2161

09/13/2008 10:42 AM
John, Congratulations and kudo's to you for not letting the issue die. BTW, how do they determine whether the cause was lightening or wind? I'll bet they just automatically say "wind" knowing it's not covered!

SusanW1
(Michigan)

Posts:2121

09/13/2008 10:49 AM
Let me get this straight: You thought you had wind damage insurance for trees. A tree came down from the wind. They told you coverage would be for lightening, but not wind. The adjustor came out and determined it was wind, so claim was denied. You raised a little heck. Second thoughts from company - tree is covered. Company tells you that in the future, wind damage would not be covered.

JohnK3
(Pennsylvania)

Posts:438

09/13/2008 11:00 AM
Thanks, Mary. I've learned during this process that lightning (typically) will split the trunk down the middle and/or leave burn marks (as the charge is a couple zillion volts, or whatever lightning consists of). Neither of these symptoms were evident, so I don't fault Adjuster for her call. And as she must have been the one (despite her protestations to the contrary) who brought my letter to the attention of her supervisors, props to her for raising the possibility that perhaps we had a stand worth taking a look at.

JohnK3
(Pennsylvania)

Posts:438

09/13/2008 11:03 AM
Susan, Essentially, you're correct. Though I didn't raise a big (or small) fuss. I simply asked my letter (our HOA's position) be considered.

SusanW1
(Michigan)

Posts:2121

09/13/2008 1:11 PM
They didn't want to lose a customer, that's all.

KirkW1
(Texas)

Posts:1110

09/13/2008 2:03 PM
They didn't want to lose a customer, that's all. I was guessing that a lawyer saw the letter and decided that if the payment would be the same or less then if this turned legal and/or a complaint was sent to the state insurance board. The thing is that if a person had reasonable reason to believe wind would be covered then things could get very ugly. While most of the time insurance boards don't do a lot for individuals, they do keep an eye out for a chance to make an example. The cost of either one could easily exceed the cost of the claim.

JohnK3
(Pennsylvania)

Posts:438

09/14/2008 9:55 AM
Kirk, Yup. I think it came down to what a reasonable person would believe had transpired. To quote myself from an earlier post: >>>Our position? We relied on what Agent wrote: "wind is covered. flood is not. I will have it issued with the endorsement. If you decide against it, we can remove it.” because as we wrote, we were not interested in a change unless wind was covered. Wind is covered sounds pretty unambiguous. I will have it issued with the endorsement sounds pretty unambiguous.<<< After Agent received my detailed letter, he responded that he had gotten "incorrect" information from an Underwriter. Okay. But that information was conveyed to us and not "corrected." First year Contracts teaches us about Detrimental Reliance and The Benefit of the Bargain, both of which figure in to this small Passion Play. Especially DetRel. We could have, if there was no wind coverage, sought insurance elsewhere, but we didn't. I'll guess, though don't know, that a Cost/Benefit analysis was not a major factor in this Reversal of Fortune. I think that after the second look, it was clear coverage had been bound, probably by mistake, but bound nonetheless. With less than $1K in premiums we pay a year vs. perhaps a $4K claim, this transaction is more of a nuisance than anything else; something to get off the books rather than wasting staff time contesting it.

JohnK3
(Pennsylvania)

Posts:438

10/08/2008 9:40 AM
Epilogue: We gatherd 3 estimates for removal, 4 for replacement. Here's something interesting I learned in the process, which I provided to Adjuster during negotiations: >>>NOTE: Replacement of a 48 foot tree, with a trunk circumference of 75 inches (24 inch diameter), has not been found to be available due to the size of the product and equipment needed for installation. Therefore, the vendors below have employed the accepted concept of CALIBRATION, that being: Based on the trunk size (diameter, one foot above ground) of the lost tree, a mathematical process indicates how many smaller trees would add up to the value of the lost tree. The quotes varied by using 4 inch trunk/10-14 feet tall through 6 inch trunk/20-22 feet tall in the calculations. Fewer, larger trees are more expensive compared to smaller ones. Installation included.<<< Of course, and acceptably, InsCo picked the lowest bids for both the removal and the replacement values. We (dammit) had a $1K deductible. However, minus that pesky detail, yesterday we received a check in excess of $4K with no conditions attached, approx. 20% of our 2009 projected dues income. $600 will go for removal. Cool. My takeaway? Persistence + arguing one's position unemotionally and intelligently + being respectful to the other side's personnel & views = contentment in (our) HOA Land and more proof to Membership that we're lookin' after them. May you, too, hopefully, have champagne dreams and caviar settlements!

SusanW1
(Michigan)

Posts:2121

10/08/2008 12:21 PM
. . . AND , , , you don't really HAVE to replace that tree. You can take that money and throw a big party! You lucked out, my man. But just this once.

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