How to fight insurance claim denial?

Question

A storm a month ago or so knocked half a tree down. The tree fell right next to a rental and the force took down an entire wall. The damage is about $15k.

I contacted our insurance and they are denying our claim, citing the following:
collapse, including any of the following conditions of property or any part of the property: (1) An abrupt falling down or caving in; (2) Loss of structural integrity, including separation of parts of the property or property in danger of falling down or caving in; or (3)Any cracking, bulging, sagging, bending, leaning, settling, shrinkage or expansion as such condition relates to (1) or (2) above

Their reasoning is that the tree didn't fall directly on the wall itself, and claim that the basement was faulty prior to the incident. We do not have pictures because the demo contractor was removing the tree at the dead of night in the storm.

How do I fight this? It is enraging that in a time of need the insurance company will do what they can do wiggle out of this. Why do I even pay them for the policy?

An attorney I am working with wants to write a letter to try and convince the insurance company on the basis of Efficient Proximate Cause. The attorney's fees for this are about $1k. I had my insurance agent reach out to the adjuster and he seems pretty dug in on his position. Is this letter worth the money to try and argue my case? I am worried that the insurance will just drag this out, demanding more $1k letters, possibly engineering studies, etc.

Any suggestions on what I should do?

Chris Seveney · Answer

@Jerry Poon

If the tree didn’t hit the house and the wall blew out from the tree hitting the ground then I think you will have a very tough battle to overcome and will spend more on legal and engineer studies to prove that.

I would tend to agree with the insurance company on this one as a wall shouldn’t blow out from a tree hitting the ground. Even if it did, based on policy doesn’t look like it’s a covered incident.

Sergey A. Petrov · Answer

With @Chris Seveney on this one. The wall shouldn’t bow. If, a big if, the tree was so huge that it caused a landlisde and you had earth movement coverage (an extended version of an earthquake policy also known as DIC) then maybe just maybe you could trigger that policy (and most have 5%+ deductibles which would likely exceed $15k in damages anyway) but that would be a stretch. Some older policies don’t have that collapse clause and it still takes an attorney and legal action to get them to respond. All that said, spend $1k and see where it takes you. The chances are they’ll retain counsel and fight it but…

Chris Seveney · Answer

Yes I am wishing I am not correct on this, as this SUCKS, but also do not want someone to go down a rabbit hole spending good money to chase bad.

Bo Bond · Answer

Jerry,

I'm truly sorry to hear this.  I know insurance companies and agents get bad raps at times, and perhaps rightfully so in certain cases.  While there are certainly some bad apples out there (like any other industry), it's been my experience over the past 20 years that most carriers/agents/adjusters try to do the right thing for their insured.  However, they also don't want to pay for things that they shouldn't per the actual language in the policy.  When an agent doesn't review coverage items with you and assumes you just want a cheap premium, it opens the door for errors, miscommunication, and oversite.  There's bound to be certain things left out of your policy that you would deem necessary had you known about them upfront.  It's always important to know what's excluded (and/or limited) in your policy, and if that item is a typical exclusion / limitation, or one that your giving up just to save premium.  In your case, your facing some common exclusions.

That said, it's usually because of situations like this where something pretty crazy and unusual happens, and thus the insurance company/agent/adjuster gets a bad rap, when perhaps they really shouldn't.  I'm sure you can understand that a tree falling that doesn't even touch the structure, yet causes a wall to collapse is pretty unusual.  Had this tree struck your wall as it fell and directly caused the wall to collapse, I'm 99.9% sure it would be covered by your policy and you'd be praising your insurance carrier and agent right now (rather than questioning them).  However, because the tree didn't hit any part of your wall directly, it creates this very odd situation to say the least.

Unfortunately, the response (exclusionary language) pointed out by your carrier/adjuster/agent is pretty common language in a property policy, but can also vary between carriers to some extent.  In your case, that seems to be the abrupt falling/caving, loss of structural integrity, or subsidence (shifting and settling of the soil, earth movement, etc.).  In any case, these are common exclusions under most property policies.  However, there are a few things to consider, and it would be in your best interest to dig a little further in my opinion (if you haven't already).

First, were you ever aware of any "out of the norm / significant" structural issues with this wall, the basement / foundation in the area of this wall, or any issues with the tree roots under the slab or hitting your dwelling in any significant way?  Having preexisting knowledge of significant issues with your structure opens you up to other exclusions such as failure to maintain, neglect, or normal wear and tear.  If the answer is yes, then I think your case may weaken depending on what you knew about this area prior to the loss.  If this is not the case, and you didn't see or know of any significant issues, then proceed below.

Second, if you weren't aware of any issues, then I'd suggest visiting with a structural expert who can analyze the area of the tree and your dwelling to see what they think actually caused the wall to collapse.  Just realize that even if they find something different, it doesn't mean that the adjuster/carrier will immediately reverse their coverage determination.  The ONLY reason I suggest this is if there was enough wind from the storm that it caused the tree to fall, and thus the root system of the tree to damage the wall as that tree fell to the ground due to wind, then you MAY have a case that "wind" was the actual cause of loss and NOT what this adjuster is claiming.  Wind should be a covered cause of loss under your policy.  Again, this approach only works if you weren't ware of any significant issues with the wall, slab, basement, foundation, or tree roots near this wall prior to the loss.  Cracks in your slab, wall, basement, and foundation are very normal.  Major cracks in your wall, slab, basement, and foundation are not normal and would require immediate attention.

Just as with any industry, carriers/agents/adjusters come in all shapes and sizes.  Some are great, and some aren't so great.  Some make claims management their utmost priority, while others focus on premiums and service, and others focus on fingertip technology and the hands off approach.  Whatever the case, I do believe most look to do what's best for their insured.  If you've never had claims before with this carrier/agent, then I can promise you they're not declining your claim just to stick it to you.  If you're good about not filing claims, your the client they're looking for and wish to keep.  However, they won't pay out just because a claim was made.  They will follow the policy language.  Can they make mistakes or make coverage determinations that aren't correct, you bet.  Hopefully this reply helps you figure out your next steps.  Sorry for the issues.  Good luck!

Jordan Sand · Answer

Thanks Jerry for sharing this as its a good lesson for everyone. Chris is most likely right on this one and sad to hear that it happened to you. Was the contractor at fault at all for taking down the tree without enough precaution as it landing forcefully?

Cameron Moore · Answer

Unfortunately, @Chris Seveney is correct. On top of that, Insurance is a a business. I know I am stating the obvious, but companies will ALWAYS find a way out of claims. Newer insurance agents will even accidentally exlude important coverages because of the Carrier based jargon. I feel for your situation and I hope this does not create too big of a hole for your investment.

Jerry Poon · Answer

@Chris Seveney I appreciate the input!

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