Fallen Trees – What Does The Insurance Policy Say?

You and I both know it, almost no one actually reads their homeowners policy.   Although if you are having trouble sleeping at night, reading is might help with that problem.   And even if you do read it, you may have some trouble interpreting what is covered and what is not.  In this blog I’d like to tackle a common question and point out an area where no policy provides protection, yet could result in an expensive bill for you: fallen trees.

I love to see large old trees in the yard in front of or behind a home.  But large trees in the yard can pose several risks to homeowners.  The most dangerous of course is that a falling tree could injure someon in the house or on the property.  After that, there is risk to the property itself, from the house to outbuildings to fences, yards, patios and driveways.  Now for the legal disclaimer:  Insurance policy forms vary from state to state and from company to company so I suggest that you consult your own policy for exact and specific coverage.  This blog will try to answer these questions in a general way that should be accurate for the majority of NC homeowners with a North Carolina Homeowners Insurance Policy.

With the disclaimers behind us, let’s move on and talk about what is covered and what is not covered in the area of fallen trees for the standard NC HO-3 policy form.  The damages to your home or your structures caused by a windblown, fallen tree will be covered, subject to your deductible.  In addition, the standard HO-3 homeowners policy form will provide up to $1000 for the cost to remove the tree from your premises.  This applies if your tree was felled by wind, hail, or weight of ice, sleet or snow.  But here is where it gets tricky.  If that tree does not damage your home, outbuildings, or fences, then no removal coverage will apply.  There is one exception to this rule.  If the fallen tree is blocking your driveway, then you will have up to $1000 coverage to clear it from your driveway enough to let you get vehicles in and out of your driveway.

Sometimes when reading the coverage on an insurance policy, you have to look carefully for what is not written in the policy language.  So what is missing here?  Well, think about the $1,000 coverage limitation.  While generally $1000 seems like plenty of money for removing a fallen tree, if you have large trees, or if several come down at one time, then $1000 might fall far short of what you need.  I have seen situations where a tree fell in a difficult place between two houses  and while it didn’t hit any structures, a crane was required to remove it.  Those costs can run up into the $10,000 range in a big hurry.  I’ve also seen cases where one tree falling brought down a couple more trees with it, generating cleanup costs well beyond the $1000 mark.  So if you have large trees around your home, you might have a rather large loss exposure that simply won’t and can’t be covered by an insurance policy.

If you are a perceptive reader, then you may have noticed that lightning was not mentioned in the list of covered perils that can trigger the removal coverage.   There is good news on that front.  The Standard NC HO-3 policy form includes some direct coverage for trees, shrubs and other plants that are damaged by lightning.  The policy will pay up to 5% of the coverage limit on your dwelling for lightning damage to trees, shrubs, plants or lawns.  But, no more than $500 will be paid for any one tree, shrub or plant.  But here’s the good news, if that tree is hit by lightning, it is now considered covered property and is eligible for removal coverage as well.  So if that huge tree in your yard falls and hits nothing on the way down, you might find yourself hoping for some evidence that it was hit by lightning.  Otherwise, you are going to be writing some big checks to tree removal service companies.

Here at Clinard Insurance Group, located in lovely Winston Salem, NC, we want all insurance buyers to be informed consumers.  If you need any help with your home or auto insurance, or with your life insurance or even insurance for your business, we hope you will call us, toll free, at 877-687-7557.

Safety Technology For Cars – Which Ones Are Working, Which Ones Aren’t?

A recent study was done by The Highway Loss Data Institute to determine how well some of the new safety technologies installed on some new car models are doing in terms of preventing accidents.  The results showed that some of these technologies were clear winners while some were not performing as well.   Anyone who is considering purchasing a new car, could very well find themselves having to make a choice about which of these new safety systems to have installed  in the new vehicle.   This study can help you decide which ones might be worth the costs and which may not.

To find out more about which of these new technologies is doing its job, researchers looked at collision, property damage and bodily injury claims on vehicles with model years between 2000 and 2011.  They studied automobile insurance claims occurring between January 2008 and August 2011.  They decided to study insurance claims instead of just looking at fatal accident data because of the sheer number of insurance claims.  This large number allowed them to find statistically significant sample sizes to draw better conclusions than if they had just focused on fatality data.   

So which safety systems provided the best results?  Well, the two big winners in terms of reducing the number of crashes were adaptive headlights and forward collision avoidance systems.  The collision avoidance systems that worked best were those that allowed the car to activate the brakes, independent of the driver. 

 Adaptive headlights are able to bend with the road and shine around the curve that you are approaching.  As you approach a curve in the road, adaptive headlights will be aimed where you are headed as opposed to straight out in front of the car. This also minimizes the shine of headlights in opposing driver’s eyes.  These headlights manage this trick by using electronic sensors to detect the speed of the car, how far the driver has turned the steering wheel, and the yaw of the car.  Adaptive headlight systems were shown to reduce accident frequency by 10%.

Forward collision avoidance systems are systems that scan the road ahead taking measurements of the cars speed in order to either alert the driver or apply the brakes if an accident is imminent.  Researchers found that vehicles made by Acura and Mercedes Benz with a forward-collision avoidance system with autonomous braking had 14% fewer claims under property damage liability than the same models without this feature.  Volvo’s system reduced these types of wrecks by 10%. 

There were some safety systems that may not be worth the money.  The big surprise was with lane-departure warning systems.  These systems can alert drivers if they cross the center line or are in danger of running off the road. Some such as the Lexus system will even correct the steering to prevent the car from drifting out of a lane or from drifting off of the road.   The data studied showed that these systems actually increased claims.  Perhaps they were distracting the drivers.    While the increased chance of a wreck with these systems is not statistically significant, the researchers did draw the conclusion that these types of systems were not reducing accidents. 

A few other systems, like blind spot detection and park assist will require more study.   There was not enough data for the research to determine one way or another if these systems were reducing claims. 

At Clinard Insurance Group, located in Winston Salem NC, we insure thousands of families all across North Carolina.  If you would like an agent who will take the time to know you and your particular situation, and be here in the future when you need to speak to him or her again, then Clinard Insurance Group is the place for you.  We are an independent insurance agency so we can give you choices about pricing, coverage and which insurance companies to use.  We would love to be your helpful consultant for your auto insurance, your home insurance, your life insurance, or the insurance for your business.  Please call us, toll free, at 877-687-7557 and let us get to work helping you today. 

Auto Insurance Marketing Costs – The Ad War Continues….

If you watch any television these days then you know that as soon as an ad sequence starts, you are very likely to see at least one ad for car insurance.   It is no accident that you seldom see specific appeals for you to buy home insurance in NC.  But that is simply because most insurance companies are losing money on NC homeowners insurance.  But auto insurance is different.  The profit margins for this product are much higher, thus you see so many ads offering to save you money.    These ads must work though, since the insurance companies just keep upping the ante and spending more and more each year.    But just how much is being spent to try and convince you to switch your auto insurance policy?

The numbers are shocking.  In fact if you are one of those who would like to see more money spent on solving world problems rather than advertising, you may even be offended.    The insurance company that is currently spending the most money on marketing expenses is Geico.  Last year they spent $993.8 million dollars on marketing.  That’s almost a billion dollars!  Geico increased its expenditures in 2011 by 10% compared to what they spent in 2010.    And yet, this 10% increase, as amazing as that seems, is far below the 15% average increase in marketing spending industry wide.  Geico’s marketing budget amounted one sixth of all the marketing spent last year by the entire property and casualty industry.

You’ve heard the saying that bigger is not always better and I think it comes into play here.  The more ads they put on television, then the less impact each one has.  But this arms race that the largest insurance companies have joined in simply requires them to spend more and more each year to overcome the noise that the others have created trying to keep up with them.  Where it will end is not clear but at some point in time the return on investment will fall and this trend will slow down or stop completely. 

You may be interested to know that while auto insurance represents about 1/3 of the total of all property and casualty insurance sold, the advertising and marketing budgets for car insurance represent more than half of the total spent on property and casualty insurance marketing.  This is evidence to me that these direct writer insurance companies with their faceless call centers believe that the average television watcher is probably the biggest sucker for them to approach.  And they are probably right.  They boil the complicated process of protecting your hard won assets down to saving money.  Look, saving money on car insurance is easy, just reduce your coverage.  But doing that of course flies in the very face of why you would buy car insurance in the first place.  But hey, if they can distract you with comedy and talking reptiles, why not?  They surely won’t spend this same amount of money trying to reach commercial insurance customers because commercial insurance customers are too savvy to fall for the idea that all insurance policies are the same and that the lowest price is the only goal when buying insurance.  And people who buy car insurance should be just as careful as business customers because after all, you are buying car insurance to protect your assets that you have worked so hard for over the years.

At Clinard Insurance Group we do things differently.  We don’t have billion dollar ad budgets so we have to get it right with every person that calls us.  We do this by offering you an experienced, well informed agent who will take the time to listen to you, hear your story and then help you find the right policy for your needs at the lowest possible cost to you.  We insure thousands of families all across North Carolina and would love to have the opportunity to show the difference between huge ad budgets and one on one consistent, professional help.  Give us a call today; toll free, at 877-687-7557.