Homeowners insurance & tree damage

If a tree falls on your house but doesn't make any noise - are you still covered?

Our agency has received a lot of calls regarding tree damage from the recent polar vortexes popping up in our area. Customers want to know if trees are covered and to what extent. Keep in mind that your homeowners policy covers damage to your house and not the land. So if a tree falls in your yard with no additional damage, your insurance policy will not pay to clean up the fallen tree.

What if a tree falls and causes damage to a fence or gazebo?

Most policies have "other structures" coverage built-in which would provide coverage to repair or replace certain structures that are on your property but not attached to your house. Coverage would apply assuming it fell because of a covered peril such as wind or weight of snow.

Does my neighbor's insurance pay if his tree hits my house?

NO. Your policy will cover damage to your structure. Your neighbor's policy does not insure your property. Again, we assume that the damage was caused by a storm and not negligence on the part of your neighbor.

Will my homeowners policy pay if a tree hits my car? 

NO. Homeowners insurance does not usually provide damage to vehicles. You would have to file a separate auto claim under your comprehensive coverage to repair damage from a falling tree.

** Keep in mind that homeowners insurance varies by company and state so it is important to check with your local independent agent to see if your specific damage would be covered. 

What is "Actual Cash Value"

ACV or Actual Cash Value is a loss settlement option that establishes how much an insurance company is going to pay in the event of a claim. Insurance companies normally take the replacement value of an item and subtract a specified amount for depreciation to calculate the ACV. Most people just assume that their policy affords the amount to replace everything, but that is not always the case.

Why is this important?
If there is a fire at your house and it costs $200,000 to rebuild the entire structure, the insurance company could wind up only paying you $150,000 because that is the depreciated amount.

Does this apply exclusively to the building?
No, your personal items can be replaced on an ACV basis as well. If you had a sofa that you purchased five years ago for $6,000 the insurance company could give you a check for $3,000 based on the age and condition.

How do you increase coverage to avoid ACV?
It is very common for all insurance companies to offer "Replacement Cost" options for both your home and contents. Sometimes this coverage is tied in directly to the policy and other times it is an optional coverage added by endorsement.

All homeowners policies are different and vary by company. It is important to consult your insurance agent to make sure you have the proper coverage.