Cranfill Sumner & Hartzog LLP is closely monitoring Hurricane Florence and hopes that everyone in the state is taking the proper precautions to plan and protect themselves from this storm.

Our attorneys often get asked about insurance coverage from these kinds of storms. Here are our most common questions about storm damage.

Will my homeowner’s policy cover tree removal costs from a tree falling on my property?

If a tree damages a structure as a result of a hurricane, the removal cost is covered by the HO-3 Form (Homeowner’s Policy). The claim must be for tree removal of a tree on a dwelling or related structure on the insured premises, or which is on a driveway and blocking access to a registered motor vehicle or blocking a handicap ramp. This also covers trees that may fall from an adjacent property.

Coverage is usually capped at $500.

What is the adjuster saying when he/she talks about “replacement cost” versus “actual cash value?”

Another issue that frequently arises in these types of claims is the calculation and implementation of “replacement cost” versus “actual cash value” (ACV) coverage. It will be listed on the Declarations Page of your policy.

Replacement cost coverage affords payment for full cost of replacement with like-kind items. Actual cash value affords payment only for the actual value of the item which might be old, worn out or near worthless.

An example would be getting a brand-new toaster at the store ($17.99 – replacement cost) versus paying for the actual value of your old 2009 toaster ($6.00 – ACV).

Also, to receive replacement cost payments you must actually replace the destroyed item. Most insurers will automatically pay ACV and tell you if you provide receipts for the replacement purchase, they will then pay the remaining difference up to the full replacement cost. In the toaster analogy they would pay you $6.00 and then if you presented a receipt for the purchase of the new toaster they will pay you the remaining $11.99.

This distinction can also apply to repairs to a house – and often (because many people do not have the cash to pay for extensive house repairs themselves at the front end) they attempt to agree in advance with the insurer on the cost of replacement work and the insurer pays the agreed price to contractor (if any) in installments until the replacement work is completed.

General Tips

After a hurricane many insurers are stretched thin in their resources, and communication can take a little longer.  In the event of damage to your home, take many pictures and videos of damage and refrain from throwing anything out or away until the insurer indicates it had an opportunity to examine it – such as clothes, furniture or a fallen support beam. Keeping lists and receipts and chronologies are all helpful.