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First go to an independent agent in your area. They will have multiple outlets to find you the proper policies.
From this conversation you are dealing with three issues.
1. The second house having the proper policy
2. Coverage. If the tree falls on the neighbors house is the damage to the house covered?
3. If the damage is covered how much will your policy pay for repairs? This is where the liability and umbrella come in.
We already established #2. yes coverage exists.
The second house is not properly covered by an HO-3 It should have a DP-3 (Dwelling Policy 3) This is a policy typically placed on secondary homes. A house at the beach or in the mountains, etc. This is very much the same as the HO-3 (homeowners policy) but having some specific exclusions and requirements. The main exclusion being liability. Which we will address when I get to #3 on our list. The requirements typically follow maintenance of the property. Such as when unoccupied the utilities be turned off and the plumbing winterized by a licensed plumber. The reason is the property is not occupied on a daily basis and could go for long periods with out inspection.
Every ISO HO-3 homeowners policy follows the same basic coverage form
A. Dwelling limit 100%
B. Personal property 50% of A
C. Loss of Use 20% of A
D. Other structures 10% of A
E. Liability
F. Medical payments to others.
The DP-3 form includes
A. Dwelling
B. Optional
C. Optional
D. Optional
E. Excluded
F. Excluded
So being liability and umbrella came up and the questionable nature of the tree. The questioning revolved around the house you do not live in. Until may if the tree fell on the neighbors house you would have coverage. After May if you had a DP-3 and the tree fell on the neighbors house you would be S.O.L. Unless the HO-3 endorsed the secondary house for liability.
This takes us to #3. Now the question is how much will your policy pay to repair the damage to the neighbors house? You need to look at item E. on your homeowners policy. That figure is the MAXIMUM the insurance company will pay. So if your HO-3 has $100,00.00 in liability and the tree causes $150,000.00 in damage the insurance company will pay $100,000.00 you will pay out of pocket $50,000.00. Most HO-3 policies you can increase limits to $1,000,000.00.
An umbrella policy covers all property you own. Houses, cars, boats, airplanes, etc. for extra liability. It is exactly as it states an umbrella, gives your basic liability policy extra coverage. So if you have $100,000.00 in liability at your home and a $1,000,000.00 umbrella you have a total of $1,100,000.00.
So in the scenario above your homeowners pays the first $100,000.00 and the umbrella pays the $50,000.00.
Also keep in mind your liability portion also pays for YOUR attorneys fees.
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