Insurance

[Sodboa]

Wouldn't it make sense for the insurance companies to pay for part of the removal of a large tree to avoid a large claim later if it were to fall on a house or garage? My guess is that if I brought it up with the agent I would become liable and insurance might not pay for damage, since I knew it was a hazard. Any advice would be helpful.

 

[SRT-Tech]

then they might as well pay for my brakes to be replaced on my truck, or for my safety gear, or for my home fire inspection etc etc etc etc.......it aint ever gonna happen, they would be broke in two hours if they had to "pay" for every dangerous tree out there.

 

[Slvrmple72]

I will give you a good example. A LARGE Maple is between my garage and my neighbors house. The previous neighbor was badgered by the previous owner of my home, known as "Crazy Bob", to remove one of the limbs that he thought was a hazard to his electric supply line to the house. He, the neighbor had it removed by one of the local services to get Crazy Bob off his back. The limb was healthy and not subject to any problems other than the impending what "could happen". This tree straddles the property line and is weighted toward the neighbors home with a large anchor root going under my garage and upsetting the foundation. Had the previous neighbor stood his ground he would not have had to pay the $800 to remove a limb that was not his "problem" in the first place. Now, however, my new neighbor and I see that the hollow from the removed limb is collecting water and rotting into the heart of the massive trunk. It will now be a matter of time, or the next bad storm,before this tree could fail. Homeowners insurance will not deal with what could happen unless the overall condition of the tree (like a snag with heavy limbs) poses a very real and immediate threat and this threat needs to be determined by an certified arborist before any action can be pursued.

 

[rebelman]

Interesting. But concerning your first post, there are programs, I don't know if it's government or what, where they pay to remove branches over a house, or failure prone trees. And some insurance companies will pay for preemptive pruning. You have to wait a while for your check.

 

[Sodboa]

then they might as well pay for my brakes to be replaced on my truck, or for my safety gear, or for my home fire inspection etc etc etc etc.......it aint ever gonna happen, they would be broke in two hours if they had to "pay" for every dangerous tree out there.

I see your point, but insurance is essentially an bet. With every check I write to the insurance company I bet I will have a problem and they are betting I won't. If I have a situation that has a potentially expensive failure mode (100 year old tree leaning over a garage with 2 cars parked inside, insured by the same company) then the cost of a tree removal or some precentage minus deductible might be more economical for both of us.

I do think it might make sense for insurance to pay for safety gear, as long as they can 'not pay' if the equipment was not used. Of course I might not want to be on the other end of that, thier lawyers are probably better than mine.

I'd hate to remove the tree since there is nothing wrong with it other than being old, it has made it through some pretty heavy winds the past couple months.

 

[SilentElk]

This is a good topic! I have heard people ask about this before. I do know of one case on a large Cottonwood, probably a 60' easy, where insurance agreed to pay for removal of a huge dead leader over a house. I suspect they knew the claims adjuster a little to well if you get my meaning. Other than this first hand expereince, I have heard of people asking but no one ever getting insurance to pay for any tree work, with the exception of a tree killed when the house beneth it caught fire.

Truth of the matter, insurance has to draw the line somewhere. Otherwise every tree a person or vehicle or pet dog walks under would need to be inspected constantly to insure the tree could not drop a limb and damage some property or kill something. I see your argument, but by insurance companies agreeing to pay to remove a 'potential' threat it means they would have to acknowledge as a whole that trees are a ''potential threat' and open themselves up in the future to numerous lawsuits due to a lack of preventing a known threat.

If insurance had to secure you against all threat your were insured for, I bet your insurance would just 10 fold or more. They arei n the business of making money not making the world safer.

 

[DGG]

Wouldn't it make sense for the insurance companies to pay for part of the removal of a large tree to avoid a large claim later if it were to fall on a house or garage? My guess is that if I brought it up with the agent I would become liable and insurance might not pay for damage, since I knew it was a hazard. Any advice would be helpful.

In my personal experience I have found that insurance companies are, by their nature, "reactive" not "proactive" towards policy claims. They know they might some day have to pay a claim at some point hopefully way out into the future. Until that happens they invest your homeowners insurance premiums and let the compounding interest effect cover the risk of any future claims.

Let's take a simple example of how this works. For instance a $800/year premium paid over 25 years is not a total of $20,000 that the insurance company has to pay claims. It is many many many times greater than that depending on the income they can earn from it over the 25 year time period. If they can earn 10% on the premiums they would have $86,545 for claims. It won't actually be this much as they will have costs to pay from the premium but you get the idea.

And who know, you might someday sell your hoiuse and the new owner will have a different insurance company when the tree falls down. And if the tree falls down it might do so in small chunks that don't hit anything.

Does this make sense to you? Just remember the insurance companies "react" to a claim and really don't do much until the claim happens and even then they sometimes will stall it as long as possible. Sure the insurance company wants to check to be sure basic insurance risks are covered (they won't write life insurance on cancer patients for instance) but their goal is to collect the premiums while minimizing any claims associated with the coverage..

I think it is up to the homeowner to be the "proactive" person since he will be out of a roof, garage, car, whatever if the tree smushes it. Even with insurance coverage it would be a great hassle and he will still have to pay a deductible.

Thoughts?

 

[Justice]

I have to agree with DGG.

As much as insurance companies suck, there are some good one's. From my experience the big problem is with the Agent/Broker and not the company. The agent many times makes promises that the company would never cover. If you have a good agent he can tell you what is covered, and what you might or might not be able to get covered. Not the office staff, and not the big insurance company itself. They NEVER want to pay a claim, just some are much better when it comes to covering one when there is a covered loss.

The one thing to watch out for is contacting you company and saying "can you help pay for this" because they will then come out and then send you a recommendation letter giving you 45 days to "fix" whatever they have found to be a hazard. If you don't fix it they will drop you. Again, get a good agent and call them first.

Insurance companies don't really care about you, they are in it for the money. So if you have a hazard tree and it really concern's you then your best bet is getting it done yourself.

JMO

 

[rguseman]

I have to agree with DGG.

As much as insurance companies suck, there are some good one's. From my experience the big problem is with the Agent/Broker and not the company. The agent many times makes promises that the company would never cover. If you have a good agent he can tell you what is covered, and what you might or might not be able to get covered. Not the office staff, and not the big insurance company itself. They NEVER want to pay a claim, just some are much better when it comes to covering one when there is a covered loss.

The one thing to watch out for is contacting you company and saying "can you help pay for this" because they will then come out and then send you a recommendation letter giving you 45 days to "fix" whatever they have found to be a hazard. If you don't fix it they will drop you. Again, get a good agent and call them first.

Insurance companies don't really care about you, they are in it for the money. So if you have a hazard tree and it really concern's you then your best bet is getting it done yourself.

JMO

I always chuckle when these threads veer into the insurance topic. I chuckle because the level of misinformation, misconceptions and general lack of knowledge regarding insurance companies and practices is amusing.

First, the purchase of insurance does NOT end an insured's obligation to take steps to reduce risk to themselves and their property even if it means spending $800 to remove a rotting branch.

The one thing to watch out for is contacting you company and saying "can you help pay for this" because they will then come out and then send you a recommendation letter giving you 45 days to "fix" whatever they have found to be a hazard. If you don't fix it they will drop you. Again, get a good agent and call them first.

Assuming we are talking about homeowner's and not commercial properties this is just not true (Not saying it has not happened, however not likely happen) Insurance companies are too busy trying to resolve claims that have occurred rather than providing risk management services to their homeowners (different story if commercial). Arguably, an insurance company could save loss dollars by being more proactive however, that would come at a cost and I am guessing most of us would not be interested in paying the additional premium. In addition, if the companies did what you suggest they would go out of business because they could go in every home and on every property and find things that need to be corrected. They wouldn't have anyone left to insure.

Besides the obvious benefit of insurance remember that, as a general rule, your insurance premiums are NOT set based on the individual characteristics of your property. Your property is not rated separately but as one property in a pool of similar properties. If your property was rated separately your premium would be much higher. This is the whole reason insurance companies exist in the first place-to spread the risk.

Yes, on some insureds companies make money. On others, they lose money. Two individuals each paying $800/year in premiums. Over ten years one makes two claims totaling $3000. The other one's $250,000 house burns to the ground. Overall the company has lost $233,000 plus the costs to adjust the claims.

Finally, always remember the cost to pay you neighbor's claim comes just as much out of your premium as his. That is why it is in everyone's interest that companies pay out a fair amount on legitimate claims. Companies will be more than willing to overypay on claims once we are willing to overpay our premiums.

 

[wysiwyg]

While most insurance companies won't pay to mitigate risks, on the flip side they also don't send an adjuster to your house periodically to uncover new risks like dangerous trees and raise your rates accordingly. It's a two way street.

 

[ropensaddle]

then they might as well pay for my brakes to be replaced on my truck, or for my safety gear, or for my home fire inspection etc etc etc etc.......it aint ever gonna happen, they would be broke in two hours if they had to "pay" for every dangerous tree out there.

Know not broke just making a living instead of a killing!!!
I hate insurance it doesn't pay usually when you have
a claim then raise your rates through the roof scamshurance
that is what I think.

 

[ropensaddle]

I always chuckle when these threads veer into the insurance topic. I chuckle because the level of misinformation, misconceptions and general lack of knowledge regarding insurance companies and practices is amusing.

First, the purchase of insurance does NOT end an insured's obligation to take steps to reduce risk to themselves and their property even if it means spending $800 to remove a rotting branch.

The one thing to watch out for is contacting you company and saying "can you help pay for this" because they will then come out and then send you a recommendation letter giving you 45 days to "fix" whatever they have found to be a hazard. If you don't fix it they will drop you. Again, get a good agent and call them first.

Assuming we are talking about homeowner's and not commercial properties this is just not true (Not saying it has not happened, however not likely happen) Insurance companies are too busy trying to resolve claims that have occurred rather than providing risk management services to their homeowners (different story if commercial). Arguably, an insurance company could save loss dollars by being more proactive however, that would come at a cost and I am guessing most of us would not be interested in paying the additional premium. In addition, if the companies did what you suggest they would go out of business because they could go in every home and on every property and find things that need to be corrected. They wouldn't have anyone left to insure.

Besides the obvious benefit of insurance remember that, as a general rule, your insurance premiums are NOT set based on the individual characteristics of your property. Your property is not rated separately but as one property in a pool of similar properties. If your property was rated separately your premium would be much higher. This is the whole reason insurance companies exist in the first place-to spread the risk.

Yes, on some insureds companies make money. On others, they lose money. Two individuals each paying $800/year in premiums. Over ten years one makes two claims totaling $3000. The other one's $250,000 house burns to the ground. Overall the company has lost $233,000 plus the costs to adjust the claims.

Finally, always remember the cost to pay you neighbor's claim comes just as much out of your premium as his. That is why it is in everyone's interest that companies pay out a fair amount on legitimate claims. Companies will be more than willing to overypay on claims once we are willing to overpay our premiums.

They lost nothing they used your money to make
twice the loss you claim by investing it they have all the money none
the work I say no insurance everyone responsible for there own loss!!!

 

[whitenack]

Insurance man, here.

Health insurance works this way, but homeowners does not.

As rguseman alluded to, home insurance does not cover simple maintenance. Insurance covers catasrophies.

For instance, when my 20 year old roof finally wears out, I can't call my insurance company and have them buy me a brand new roof. Sure, if I don't replace it the roof will leak and I'll have lots of damage. With certain types of policies ("all risk"), this damage would be covered. However, the insurance company is not interested in paying for simple maintenance.

Same thing with this tree. You are required to keep your place in order. Feel free to talk with me further about this.

 

[Justice]

I agree whitenack.

I mentioned in my post regarding them inspecting a home and sending a recommendations letter, or they will drop you does happen here often. I too am a former "insurance man" and always advised my clients as to what their policy actually covers, and what it does not cover.

For most new policy's here insurance companies are inspecting.
If you put in a claim they will inspect. For example one homeowner insisted in calling directly to the insurer after I explained a sunken basement floor was not covered.
The company inspected, and denied her claim showing the policy language that I had already sent her and discussed. They then forwarded the info to the rating department and increased her policy premium based on now known increased property value, and a recommendation letter to get the sinking floor and no footing support columns on the floor fixed within 45 days.

Moral, insurance is for catastrophic losses, for the most part. The liability ins will save you if you have a loss. The insurance company lawyers fees alone would bankrupt most (if we had to defend a lawsuit ourselves), so having them is a necessary evil.

Your agent should be "your agent" and you should trust them. Call them, its their job to help you, that is why they get your business.

My experience was always insure properly, honestly, and ethically.

 

[Sodboa]

Whitenack / Justice:

I guess that was my point... Why is insurance reactive and not proactive? Doesn't it make sense to mitigate the risk instead of suffering the consequences? SRT-Tech made the comment that they would go broke in 2 hours if they worked this way, but removing a tree for a couple thousand dollars would avoid the potential for tens of thousands in damage. Obvously it would need to be done in a case by case basis as it could easily be abused.

I have no reason to believe that a limb or the whole tree is going to fall anytime soon it is just too large of a tree in too small of a space and the targets are power lines (20 ft) to one side a garage on either side (6ft and 4 ft) and a house on the last side (40 ft). There are very few angles that would miss something.

 

[stipton]

Another insurance guy here....

Most insurance companines will pay for the removal of trees on your property, up to $500, IF the tree is damaged by a covered loss (ie lightning, wind damage rendering the tree unsafe, etc). Just because you have a big ol' tree beside the house and you decide you want it down doesn't mean the insurance company will pay. Like whitenack said, it is not a maintaince policy, you are required to maintain your home and property at your cost.
If the tree is getting too close to power lines then let the power company make the call and foot the bill.

I personally have a 60' pine 10' from my home. It really scares me when the wind picks up. Now that I have an owb, it will become firewood for next season.

 

[whitenack]

Insurance will always be reactive, and not proactive. That's just what insurance is designed to do. That is why it is called insurance, not assurance. You are not guaranteed not to have a loss, you are just guaranteed to be made whole after a loss.

Insurance companies all driven by statistics and cash flow. Spend as little as possible and take in just enough premiums to pay for those expenses. If they have to send an inspector out to your property, that costs money. Yes, while one claim would cost thousands of dollars, they are saving millions of dollars not inspecting. Therefore, it is more cost effective for them to wait for the claim to happen than to run around trying to predict and prevent all the possible claims.

Personally, I prefer it that way (course, you'd expect to hear that from an insurance agent). It keeps me, the average policyholder, from having to pay for someone else's regular upkeep. I only need my insurance for the absolute disaster -- that which would ruin me financially. The rest, I take care of myself. I expect other policy holders to do the same, so that my (our) premiums can stay as low as possible.

 

[rguseman]

I have to agree with DGG.

As much as insurance companies suck, there are some good one's. From my experience the big problem is with the Agent/Broker and not the company. The agent many times makes promises that the company would never cover. If you have a good agent he can tell you what is covered, and what you might or might not be able to get covered. Not the office staff, and not the big insurance company itself. They NEVER want to pay a claim, just some are much better when it comes to covering one when there is a covered loss.

The one thing to watch out for is contacting you company and saying "can you help pay for this" because they will then come out and then send you a recommendation letter giving you 45 days to "fix" whatever they have found to be a hazard. If you don't fix it they will drop you. Again, get a good agent and call them first.

Insurance companies don't really care about you, they are in it for the money. So if you have a hazard tree and it really concern's you then your best bet is getting it done yourself.

JMO

Justice, I stand corrected. I confess my bias. I am counsel for an insurance company. My statement concerning inspections etc, illustrates the danger in generalizations that may not apply from one state to another. My experience in WI is that these types of inspections, if they occur, are rare in personal lines.

I guess my frustration comes from people who purchase insurance, don't read the policy or ask questions and then get PO'd when it clearly does not provide coverage for something THEY think should be covered. Or in this case, does not provide a service that someone thinks they should. Somehow, that becomes the insurance company's fault and makes them evil.
Fortunately, there are far more people who appreciate and are happy with their agent, adjuster, attorney (I can always hope, can't I?) than are unhappy.