The other day, we had a terrible thunderstorm. The giant elm tree in my backyard was struck by lightning and fell over, damaging the back end of my neighbour's house. She's pretty angry about it. Now I'm afraid I will have to pay, not only to remove and replace my tree, but also to fix her house. Will my insurance cover any of this? -- Out on a Limb

Dear Limb:

As the old saying goes, every cloud -- even a thundercloud -- has a silver lining! Yes, both you and your neighbour are covered, on all counts. From an insurance standpoint, it doesn't matter whose tree caused the damage (although I'm sure your neighbour would disagree!), since both of you claim for any loss or damage under your respective homeowners' policies. After all, you can't be held responsible for damage caused by something as unpredictable and unavoidable as a bolt of lightning. The stricken elm falls under the category of "falling object," a peril (cause of loss) that is covered under just about any homeowners' policy.

Therefore, your neighbour can claim for the damage to her house under her own homeowners' policy, although she will have to pay the deductible (the portion of the claim that the policyholder agrees to pay). Meanwhile, you are covered for the cost of your tree, as well as the removal of the debris, up to the limit specified in your policy -- usually a maximum of five per cent of the total insurance on your house, or, for any one plant, a maximum of $500, less your deductible.

You also have the option NOT to make a claim, depending on your deductible and the value of the tree. Let's say it would cost $800 to replace your tree, and your deductible is $500. In that case, you would receive $300 for the tree. You may decide instead to pay for it out of pocket, rather than having such a small claim blemish your insurance record -- after all, it's the frequency of claims, not the total dollar value, on which insurers base their ratings. Remember, insurance is really meant for catastrophic losses that you COULDN'T afford to pay for out of pocket, but the choice is yours.

If, on the other hand, your neighbour's insurer claims that your tree was at risk of falling down anyway, and that you were therefore negligent, you will want to call on the liability portion of your homeowners' policy. It will pay, not only for any damages that may be awarded against you, but also for your legal defence. As for your neighbour, I suggest you offer her an olive branch and hope that lightning doesn't strike twice!