HO / Umbrella Liability for sidewalk and street tree

Danny Yang

New Member
7
Hi folks. I was considering an Umbrella policy for my property (owner occupied). And since Umbrella is mainly for extending liability of HO, I spent sometime to review my HO liability clause. I use Farmers, and I found a sample copy of my policy as attached below.

I am particularly interested in understanding more about sidewalk and street tree -- I recently realized that my city (in California) has ordinances that require the owner of private land abutting a public sidewalk to maintain that section of sidewalk, same as street trees. (and forgive me but this sounds like a too convenient thing for the government to just push this responsibility to homeowners :/ )

This means to me that it is a wise decision to make sure that the owner has good liability coverage for claims like someone injured by uneven sidewalk or fallen tree (branches).

I'm not seeking for legal advices but just some generic questions from more experienced folks on this forum:

1. Is sidewalk + street tree in front of the property usually covered in a HO and Umbrella? Reading the attached sample policy, Insured Location includes residence premise, but it doesn't really define what's the residence premise, like if it includes sidewalk and street tree in front of the property. I just want to make sure that my family is protected from claims like someone trips on the sidewalk, hurts by a fallen tree, stuff like that.

2. The Liability Exclusion on page 41 in the attached sample policy states that "We do not cover bodily injury, property damage or personal injury arising from, during the course of or in connection with a violation of any ordinance, order or penal law committed by, or with the knowledge or consent of any insured, or any criminal act by an insured" --- So if the sidewalk is uneven or the street tree is unhealthy, would this exclusion becomes applicable that the owner is not covered? Also, in this case, what should the owner do to make sure this exclusion isn't applicable? Hire contractor to fix the sidewalk?

3. The above is for the HO policy. Is it generally right if a claim is covered by HO policy, then the part that exceeds the Medical - Payments to Others and Liability coverage will be automatically covered by the Umbrella, up to Umbrella's limit?

Thanks so much, and look for people to share their thoughts. These legal (policy) documents usually are written in the way that makes it possible to interpret in either way so I am pretty uncertain if I'm covered or not.

Thanks!

Yang
 

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I recently realized that my city (in California) has ordinances that require the owner of private land abutting a public sidewalk to maintain that section of sidewalk, same as street trees.

How did you "learn" of that? Have you read the statute? Can your provide a link to it (or the city and code number) so that I can read it? Before any analysis can be made of the relationship between the code and the homeowners policy, we first have to determine exactly what your responsibility is.

forgive me but this sounds like a too convenient thing for the government to just push this responsibility to homeowners

Unfortunately, it's rather common just about everywhere. I have a strip of city land between the back of my property and the city canal that I have to "maintain." But for me all that entails is spraying the weeds as they pop up.

This means to me that it is a wise decision to make sure that the owner has good liability coverage for claims like someone injured by uneven sidewalk or fallen tree (branches).

Homeowners insurance doesn't make a distinction between good liability coverage and bad liability coverage. The liability coverage is the same from policy to policy. Homeowners policies are mostly standardized, with some variations from company to company with regard to proprietary forms, but the basic concepts are the same.

Before I go into your questions, I need to explain something for you. Your homeowners policy covers you for your negligent acts that cause injury to persons or damage to property belonging to others and extends beyond the boundaries of your property. The word "negligent" is important because if you are not negligent your policy doesn't pay but, instead, defends you against claims or lawsuits alleging negligence.

1. Is sidewalk + street tree in front of the property usually covered in a HO and Umbrella? Reading the attached sample policy, Insured Location includes residence premise, but it doesn't really define what's the residence premise, like if it includes sidewalk and street tree in front of the property.

Doesn't have to define as long as it doesn't limit it. See Page 33 of your policy - Section II - Liability Coverage. It goes where you go, it covers what you do, regardless of where.

So, simply put, if you are negligent with regards to the sidewalk or trees, your policy will pay, if you are not negligent, your policy will defend.

With regard to Question 2, I'll defer discussion until I read the ordinance that you refer to.

3. The above is for the HO policy. Is it generally right if a claim is covered by HO policy, then the part that exceeds the Medical - Payments to Others and Liability coverage will be automatically covered by the Umbrella, up to Umbrella's limit?

Nope, not automatic. Medical Payments covers a victim regardless of fault. Once the Medical Payments coverage is exhausted you would have to be proven negligent for your Homeowners liability or umbrella liability to pay anything further.

By the way, you are to be commended for reading your policy and asking question. Most people don't.
 
Thank you @adjusterjack for the responses. I have to say those are really informative, especially the negligence part. Allow me to have questions about it below.

How did you "learn" of that? Have you read the statute? Can your provide a link to it (or the city and code number) so that I can read it?

Here's the city of San Jose's (CA), code about it (where I currently live):
Sidewalk: Municode Library


The word "negligent" is important because if you are not negligent your policy doesn't pay but, instead, defends you against claims or lawsuits alleging negligence.

This is a new piece of info that I haven't heard of. And I Googled online a little bit, I think you are absolutely right. Thank you for pointing out. I have a few follow ups and want to know what your understandings are:

1. In the attached policy however, I'm not sure if I see anything mentioning that HO liability only covers when owner is negligent. Am I missing something? Or this is intentionally omitted?

2. It sounds interesting that HO covers only when owner is negligent. I hope this doesn't mean that owners are encouraged not to fix the sidewalk/street tree even upon city's notice. Because if owner tries to hire contractor to fix the sidewalk/street tree, then owner isn't negligent and is not protected by HO anymore? If I see an uneven part of the sidewalk in front of my property, should I still address it or just be negligent about it to be covered? Sounds a bit counter-intuitive...

Or does that mean if owner takes reasonable action to fix the sidewalk/street tree then usually it's not even possible for the injured (say, someone who trips on the sidewalk that's reasonably maintained and fixed) to file a claim against the owner in the first place anyways so there's no concern for owners?

3. Continuing above, if non-negligent owner who tried to maintain/fix the sidewalk and tree isn't protected by HO/Umbrella anymore, is there other kind of insurance policies that owner should purchase to get more protection in case of a claim that someone is hurt by a fallen tree branch that owner is paying tree service to maintain?

Should owner just increase the Medical - Payment to Others coverage since it looks to be more "comprehensive"?

4. What would be the sidewalk/street tree related claims you've seen or can imagine whose results may be owner not negligent (so not covered),


Please allow me to ask if you have some thought on the original question2 above now:
The Liability Exclusion on page 41 in the attached sample policy states that "We do not cover bodily injury, property damage or personal injury arising from, during the course of or in connection with a violation of any ordinance, order or penal law committed by, or with the knowledge or consent of any insured, or any criminal act by an insured" --- So if the sidewalk is uneven or the street tree is unhealthy, would this exclusion becomes applicable that the owner is not covered? Also, in this case, what should the owner do to make sure this exclusion isn't applicable? Hire contractor to fix the sidewalk?

Thank you so much for your comments, I really look forward to further discussions.
 
"Homeowners policies are mostly standardized, with some variations from company to company with regard to proprietary forms, but the basic concepts are the same."

I would respectfully take exception. I've seen HO policies with dramatically different coverage and it's getting worse. Here's a study from the U. of Minnesota law school and he misses a lot of stuff:

“Reevaluating Standardized Insurance Policies”
by Daniel Schwarcz, U. of Minnesota law school

http://uphelp.org/sites/default/files/SSRN-id1687909.pdf

“The current personal-lines insurance marketplace is largely organized around a myth. That myth is that personal-lines insurance policies are completely uniform. This myth explains regulatory rules that do nothing to promote insurance contract transparency.”

“Different carriers’ homeowners policies differ radically with respect to numerous important coverage provisions. A substantial majority of these deviations produce decreases in the amount of coverage relative to the presumptive industry standard, though some deviations increase coverage.”

“It is virtually impossible for consumers to comparison shop on the basis of these pervasive differences in policy forms” because insurers refuse to make their policy forms publicly available before purchase."

“[E]vidence suggests that many insurance agents are both unaware of potential differences in coverage among carriers and unfamiliar with many details of the coverage they sell.”

“If regulators do not act to substantially improve consumer protection in this domain, then it can be expected that coverage will continue to degrade for most carriers, in a modern-day reenactment of the race to the bottom in fire insurance that triggered the first wave of standardized insurance policies.”
 
Here's the city of San Jose's (CA), code about it (where I currently live):
Sidewalk: Municode Library

That's what is called a "strict liability" ordinance and there is no doubt that you would be liable if you did not maintain the sidewalks in accordance with the city's requirements.

Please allow me to ask if you have some thought on the original question2 above now:

After reading the ordinance it is clear that the homeowners policy will not cover your liability for non-compliance with the ordinance.

Your new questions (2 and 3) become moot because the ordinance seems to hold you liable for everything regarding the sidewalks whether you do comply and get it wrong or whether you don't comply at all.

As for increasing your Medical Payments coverage, see Page 36 (middle of page) where it says that all the exclusions apply to both Liability and Medical Payments. Increasing Medical Payments limits won't help with regard to the ordinance.

4. What would be the sidewalk/street tree related claims you've seen or can imagine whose results may be owner not negligent (so not covered),

Wouldn't matter. According to the ordinance, you would be liable whether you were negligent or not.



1. In the attached policy however, I'm not sure if I see anything mentioning that HO liability only covers when owner is negligent. Am I missing something? Or this is intentionally omitted?

Here's what you are missing. Page 33:

Coverage E (Personal Liability)
We will pay those damages which an insured becomes legally obligated to pay because of:
1. bodily injury resulting from an occurrence; or
2. property damage resulting from an occurrence.

To be "legally obligated" for injury or damage, you must be at fault, which is what "negligent" means. If you are not at fault, you are not "legally obligated." This applies to unintentional fault as intentional acts are excluded.
 
@adjusterjack thank you for the comments.

It looks like the only way to protect the owner themselves from sidewalk injuries claims is to have city inspect the sidewalk and comply with the code? That way at least if someone injures himself on the sidewalk, at least the Liability Exclusion on page 41 won't apply since owner complies with the code and HO/Umbrella should cover it now?

Or owner still has to prove negligence for Liability Insurance to take effect? What would be the example that owner won't be negligent, assuming owner isn't intentionally hurting people or commit crimes :)


Thanks again.

Danny
 
It looks like the only way to protect the owner themselves from sidewalk injuries claims is to have city inspect the sidewalk and comply with the code? That way at least if someone injures himself on the sidewalk, at least the Liability Exclusion on page 41 won't apply since owner complies with the code and HO/Umbrella should cover it now?

I see where you are going with that. If you are in compliance with the code and keep the sidewalk in perfect condition and somebody still gets injured then the exclusion would not apply and your insurance company would defend you. Obviously, since you aren't negligent and didn't fail in your duty, your insurance wouldn't pay anything under the Liability coverage but could pay under Medical Payments without regard to fault because of (Page 34):

This coverage (Medical Payments) applies to:
1. persons on an insured location with permission of an insured; or
2. persons off an insured location if the bodily injury is:
a. the result of a condition on the insured location or the ways immediately adjoining;
b. caused by the activities of an insured;
c. caused by a residence employee in the course of employment by an insured; or
d. caused by an animal or creature owned by or in the care of an insured.

Or owner still has to prove negligence for Liability Insurance to take effect?

You mean "claimant" not "owner." It's a claimant (injured person) that has to prove negligence.

What would be the example that owner won't be negligent, assuming owner isn't intentionally hurting people or commit crimes

Well, using your sidewalk thing as an example, you've kept the sidewalk in perfect condition, no defects, no roots sticking up, no cracks to trip on, the curb well marked. Here comes a fat old lady walking along with her grocery bags in her arms obscuring her view ahead. She misjudges her steps, one foot slips off the curb, she loses her balance, down she goes, ends up needing a $50,000 hip replacement and has no medical insurance.

Did you do anything, or fail to do anything, that resulted in her accident? Of course not. No negligence there.

By the way, I buy the lowest possible Medical Payments limit and wouldn't have it at all if it wasn't built in to my policy. I don't want klutzes collecting from my insurance if I'm not at fault. :cry:
 
@adjusterjack thank you. Insurance is ... complicated.

One last question: I am re-reading the exclusion, it's saying

"
Violation of ordinance, penal law or criminal acts. We do not cover bodily injury, property damage or personal injury arising from, during the course of or in connection with a violation of any ordinance, order or penal law committed by, or with the knowledge or consent of any insured, or any criminal act by an insured.

For purposes of application of this exclusion, a plea of guilty, no contest, or true in a criminal proceeding, which involves the same acts or activities which are the basis of a claim for damages against the insured, shall conclusively bar any bodily injury, property damage or personal injury arising or resulting from or caused by such acts or activities from coverage under this policy. This applies whether the insured actually admits or admitted guilt by plea.
"

It seems to be that the exclusion definitely will apply if there's a criminal violation determined. But I don't think uneven sidewalk that's caused by say tree root or something will be considered criminal at all.

For the purpose of discussion, what do you think this exclusion applies? Is violation of the city code ordinance for sidewalk enough or it has to be more severe like criminal violation of laws?

Thanks.

Dan.
 
The word "or" appears in the first paragraph, so you read the exclusion like this:

Violation of ordinance, penal law or criminal acts.

1 - We do not cover bodily injury, property damage or personal injury arising from, during the course of or in connection with a violation of any ordinance committed by, or with the knowledge or consent of any insured.

2 - We do not cover bodily injury, property damage or personal injury arising from, during the course of or in connection with a violation of any order committed by, or with the knowledge or consent of any insured.

3- We do not cover bodily injury, property damage or personal injury arising from, during the course of or in connection with any criminal act by an insured.

Now that we've split the exclusion into it's three elements, the second paragraph applies only to criminal acts and the first two elements stand alone.

The violation of a city ordinance is enough to invoke the exclusion.
 
@adjustjack is this exclusion common in most of HOs that you know of? Or Farmers are more strict on this? Thinking about changing if there are providers that at least will be on homeowner side in this case of uneven sidewalk!
 
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