| Q&A of the Week |
Debris Removal and Coverage for Trees
A California subscriber recently asked the following question:
I am working several large property claims from the northern California firestorms this summer. I am not clear on debris removal for our ISO HO–3 policies (HO 03 10 00) and whether debris removal as an additional coverage extends to removal of dead trees killed in the fire. The policy states that trees are covered under additional coverage (E) 3. when the loss is caused by a peril insured against, including fire. If the limit available for trees, shrubs, and other plants is exhausted by payment of loss, is there an extension of another 5 percent for debris removal of these now dead trees? This insured has many acres of lost trees, and any available coverage is helpful. Some say that the additional 5 percent for debris removal extends only to Coverages A, B, and C, and not to trees, shrubs, and other plants. Can you help?
ANSWER: You are trying to combine two separate coverages. The debris removal does not apply to trees because the removal of trees of the insured is limited to the felling of the trees by windstorm, hail, weight of ice, snow, or sleet, and that damages a covered structure or blocks a driveway or handicapped ramp. There is no coverage for the debris removal of the trees.
Under the additional coverage for trees, shrubs, and other plants, there is coverage for damage by fire, and an additional 5 percent of the limit that applies to the dwelling for all trees, shrubs, plants, or lawns. So there is up to $500 of damage per tree, shrub, or plant up to the 5 percent of the dwelling coverage. For example, the insured coverage A is $300,000. Five percent of that is $15,000, which is available for the replacement of trees. While this coverage does not discuss debris removal, it would make sense that if the dead trees have to be removed before they can be replaced by new trees that would be included as part of the overall cost of replacement. |
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| Litigation Watch |
Loading and Unloading and Use of Vehicle
Selective Insurance Company appeals from an order granting summary judgment to Zurich American Insurance Company. This case is Selective Insurance Company of America v. Zurich American Insurance Company, 2015 WL 6758358.
Trees and vegetation were being cleared from a right-of-way owned by Public Service Electric and Gas. Dante Enterprises was engaged to remove the trees and vegetation. Midco was hired to provide a truck and driver to haul away the material. Dante employees brought the fallen trees to the edge of a retaining wall where the truck driver, Ciuba, was to have the logs rolled into his truck.
Ciuba was injured by a rogue log that rolled from the hill, over the wall, and then hit Ciuba in the head causing severe injuries. Ciuba sued Dante and Midco. Selective Insurance was the insurer for Dante and Zurich was the insurer for Midco. The lawsuit was settled with Selective paying $800,000 on Dante's behalf. Zurich did not contribute to the settlement and Selective brought this action seeking contribution.
The trial court granted summary judgment to Zurich and this appeal followed.
The Superior Court of New Jersey, Appellate Division, noted that the Zurich policy covered all sums an insured legally must pay because of bodily injury caused by an accident and resulting from the ownership or use of a covered auto. The Midco truck was a covered auto, so the court saw the issue as whether the accident to Ciuba arose out of the use of the vehicle.
The court said that for an injury to arise out of the use of a vehicle, there must be a substantial nexus between the injury suffered and the asserted negligent use of the vehicle. Selective argued that Dante's staging of the logs constituted use of the truck. It said that the staging was done in preparation for the loading of the Midco truck and so, the purpose was to facilitate the loading of the logs. The appeals court did not agree.
The court found that it was undisputed that the Dante employees were not engaged in loading the Midco truck when the rogue log hit Ciuba. Moreover, the staging of the logs was not an integral part of the loading process or the unloading process. Thus, there was no use of the truck. The court said that the accident arose not from any loading or unloading activities but from the negligent acts of those involved in the clearing of the trees. As such, Dante's insurer was not entitled to contribution from the vehicle insurer.
The ruling of the trial court was affirmed.
Editor's Note: The Superior Court of New Jersey, Appellate Division, interprets the loading and unloading part of the definition of "use of a vehicle" and finds that the facts of the accident do not meet the requirements of loading and unloading of a vehicle. Arising out of the use of a vehicle has to be seen as originating from or growing out of the use of the vehicle and in this instance, there was no use of the vehicle. |
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| Fraud of the Week |
Fraud Ring—New York
AMOUNT: $279 million
Being the end of the year, over the next few weeks we're going to look at the Coalition against Insurance Fraud's 2015 Hall of Shame Inductees. The largest no-fault auto scheme ever charged has been taken down in New York. The gang made dodgy injury claims involving real and phantom car wrecks, worked with ten doctors and three lawyers to run a ring of sham clinics where patients were given physical therapy and acupuncture up to five times a week, billed insurers for fake crashes, and the attorneys coached patients on how to mimic symptoms of injuries before suit was filed against the carriers. Most of the gang pleaded guilty, and the ring leader, Zemlyansky, is awaiting sentencing and could receive a century in prison.
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