Claim Ethics Question : Deteriorating Trees Property Damage

Hey all you independent adjusters, claim reps, public adjusters and insurance attorneys!  Here’s a serious situation for you to ponder and comment on.  We would be delighted to receive your input on this situation:

A mess of tree limbs located within the lines of an insured-rental property falls and lands almost exclusively onto a parked vehicle in the public right of way.  The roof of the vehicle has been crushed in and the windows are broken with damages estimated at $13,000, therefore the vehicle is non-operable.  You are assigned the claim and learn the following:

The property is one of many rental units owned by an insured with a large policy covering several million dollars worth of property in the city.  It is a residence that was converted into two units and the tree which caused the damages is the only tree on the property.  Its also the only tree that could have caused the damages.The weather report indicates an average 25 mph wind with 35 mph gusts around the time of the incident, but this is not an adverse weather condition for the area.  The weather pattern, when compared throughout years is common and happens several dozen times per year.  Also, there is no damage in other areas throughout the neighborhood.

The local forester reveals there were no other reported incidents in the days following this one, and that they also forced removal of the tree immediately upon notice of the incident.  The tree type is common throughout the region for poor sustainability.

You briefly interview the property owner and he claims to know nothing of the trees poor condition.  He states that since he did not know the condition of the tree before it happened and was given no notice, he is not negligent and therefore not responsible.  There are some green leaves toward the bottom of the tree but the top is obviously dead or deteriorating and its evident that if anyone had looked up, the condition would have been obvious.  Your field surveyor decided to photograph only the green leaf portion of the tree.

The vehicle owner is livid and feels that the property owner knew about the condition of the tree prior to the incident.  A lawsuit is imminent if the claim is not resolved.  So far, the vehicle owner just wants his vehicle replaced, not repaired.  The odds are good that if you offer him diminished value plus repairs, he would consider accepting the offer.The vehicle owner then provides you with two affidavits.  The first affidavit is from the neighbor directly across the street and in plain view of the tree.  This neighbor is a property owner and his affidavit clearly states the tree was in poor condition prior to the incident.  The other affidavit states that there is a black plastic liner beneath mulch surrounding the entire postage stamp sized front yard, and the liner is preventing the tree from receiving proper moisture.  You learn that your insured isn’t too fond of mowing grass or maintaining any other landscaping on the property and that he most likely put the liner there to prevent any grass from growing.

The vehicle owner has no insurance and therefore he makes his only claim against your insured.  You learn that his business is suffering from the loss of use on his vehicle and that he likely has no money to repair the vehicle.

Do you pay the claim?  Do you deny it?  If so, why or why not?  We would love to hear your comments on this!

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