How to Address Tree Damage and Landscape Losses

By Denise Johnson | July 13, 2011

Addressing tree damage and landscape losses is not an easy task for adjusters since current estimating software doesn’t provide adequate information, options, or scenarios to cover the complexity of removing a tree or shrub, according to Douglas Malawsky, executive vice president of HMI, Inc.

These types of losses can result in high dollar claims.

“We are involved in claims involving lost trees, whether it’s the result of a storm, whether it’s the result of an oil spill, whether it’s the result of fire, in which literally millions of dollars are being claimed. Because if I’m a golf course and I have $10,000 per tree, with a limit of $5 million, and I have a tornado go through and blow down 600 trees, that’s a significant claim,” Malawsky said.

He presented on the subject at the Property Liability Research Bureau’s conference held earlier this year in Nashville, Tennessee. He said there are a number of factors that need to be taken into account when adjusting tree damage and landscape claims.

To illustrate this, he pointed out that the size of the tree, a metric used by some estimating software, is not always the measurement which will cause a tree removal to become expensive. The main factors that affect pricing are accessibility, location, and lack of industry standardization.

Factors Affecting Tree and Shrub Removal Estimates

How the professional tree or landscape company plans to remove the damaged tree or shrub will have a major impact on pricing. Several factors are involved in determining accessibility and location:

• Size of the tree

• Diameter of the tree

• Crown of the tree

• Weight of the tree

• Need for heavy equipment

• Wiring involvement

• Skylight involvement

• Extent of current landscaping

• Primary home or an out building affected

• Whether the tree or shrub has embedded inside a home or building

• Number of hours the job will require

• Number of workers needed

• Type of crew

While size, weight, and diameter may be obvious considerations in pricing, Malawsky said the crown can be the costliest part of the tree. That’s because, as the widest part at the top of a tree, it can have several limbs. “In some instances, [the limbs] are the size of small trees that you have to cut in order to dismantle the crown. So crown size is important.”

It’s also important to address the potential for collateral damage, Malawsky said.

Evaluating a Tree or Landscape Service Professional

An important aspect of handling a tree or landscape loss is finding qualified professionals to handle the removal. Increasingly, tree care and landscape companies are springing up overnight.

“The greatest threat, I think, to our industry, and indirectly to home owners and insurance companies, is truly the pick up truck and chainsaw guys. They constitute and it may be a shocking statistic but in any given market, they can constitute between 85 to 95 percent of the vendors that call themselves tree care companies,” Malawsky said.

He cited Hurricane Katrina as an example. “An estimated 350 to 400 million trees went down in the state of Louisiana. So many trees went down that when they began rotting; satellites were able to pick up on the impact that the rotting trees were having on the ozone.”

Several state and federal emergency services departments sent requests for proposals to tree care companies to aid in the cleanup of the downed trees.

That event in and of itself created not just hundreds, but thousands, of companies overnight that saw an opportunity to make cash. A frightening thought considering the danger involved in that type of work.

OSHA and the TCIA, the Tree Care Industry Association, have done some private research that shows that the tree care industry, if it were a stand alone OSHA classified industry, would be the fifth most dangerous industry in the country, according to Malawasky. That places it right after logging, roofing, and general contracting.

Because the industry is largely unregulated, adjusters planning to hire a tree or landscape professional should consider the following questions and information in order to evaluate qualifications for the job. They include:

1. Proof of insurance, workers’ compensation and general liability coverage.

2. Is there a certified arborist on staff?

3. How long has the company been in this line of work?

4. Is there a safety officer on staff?

Trade organizations including the TCIA and the International Society of Arboriculture (ISA) can be helpful sources in the search for a qualified tree care or landscape company. Another good resource is the Council of Tree and Landscape Appraisers (CTLA), which is recognized by the IRS and legal system for its formula for determining replacement cost and appraised value of trees and shrubs.

Malawsky readily admitted the tree care and landscape industry is horrible about working with adjusters. “They are in very large part responsible for the confusion and a lack of efficiency in working with insurance companies, because they don’t use any format of estimate creation that resembles in any shape or form what an experienced insurance vendor would use. They don’t break it down. Many tree care companies will simply write ‘removed storm damaged oak from home $8,000.’ And, from their perspective, that’s a good description.”

He plans on addressing this very issue at a November lecture to the TCIA titled, Working with the Insurance Industry.

“It’s important to empower adjusters so that they can evaluate estimates and evaluate what constitutes a professional tree care company…because by definition storm work is insurance work. And storm work for many tree care companies constitutes a significant percentage of their revenue,” Malawsky said.

To assist adjusters with questions, HMI currently offers a free 24 hour hotline available to the public to answer tree and landscape loss questions.

The HMI hotline number is 1-877-406-3232. It is staffed 24 hours a day, seven days a week. For more information see the website at

Photo courtesy of FEMA

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