When it comes to homeowners insurance, it’s important to be covered against every possibility. Tornadoes are among some of the most expensive natural disasters and are common in the United States. While the majority of tornadoes touch down in Tornado Alley in the Midwest, tornadoes can occur anywhere, making tornado insurance a necessity. Learn more about tornado insurance and find out if your home is covered against damage or destruction caused by tornadoes.
What is Tornado Insurance?
In many cases, tornado insurance is not a separate rider or insurance policy. Most homeowners insurance policies cover damage or destruction caused by tornadoes all over the United States. However, coverage against tornado damage or destruction to vehicles is different and requires a comprehensive auto insurance policy.
Because of the highly destructive nature of tornadoes, coverage is often needed for damages caused by high winds and the complete destruction of homes directly in the storm’s path. Homeowners insurance also covers personal possessions such as clothing, jewelry, furniture, electronics, and artwork, all of which can be damaged or destroyed during a tornado as well. Many homeowners insurance policies limit certain categories of items based on the total coverage limit of the policy, so consider getting additional replacement value coverage to protect all of your valuable personal belongings.
What to Have in Your Tornado Insurance Coverage
Since tornados are possible all around the country and not just in Tornado Alley, it’s important to understand what is and is not covered in your homeowners insurance policy in the event of a tornado. These key things and questions can make a significant difference for you if you ever have to file a claim after a tornado.
Windstorm Coverage
Windstorm coverage may or may not be included in your homeowners insurance policy, but it’s a very important thing for your home to have before a tornado hits. While damage from standard wind, hail, and trees are usually covered in most policies, tornados bring much stronger levels than standard. Every state and region is different, and policies differ based on previous claims and risks. You might need a separate deductible for high winds and hail, so it is best to speak with an agent from your insurance provider.
An All-risk Policy
An all-risk or peril insurance policy is important to have to ensure the maximum protection and coverage of your property. Like the name suggests, all risk or peril insurance policies offer protection and coverage against all risks or perils that could damage your home and personal property, unless specifically excluded. Earthquakes and floods are the common exceptions to these policies and coverage is available against them through specific separate policies. Tornadoes, however, are usually included in all-risk or peril policies, protecting all insured homes.
Loss Of Use Coverage
Ensure that your homeowners insurance policy covers living expenses in the event that your home is unlivable. Your policy should cover hotel and restaurant expenses when you are forced to live elsewhere, as well as reimbursement and rebuilding costs after your property has been damaged or destroyed. It is also a good idea to have an inventory of important or valuable personal belongings that should be covered in your homeowners insurance policy as well, should they need to be replaced.
It’s best to review your entire homeowners insurance policy and be sure that your home is not underinsured. Understand your policy’s deductibles and limits, and familiarizing yourself with your insurance company‘s claims process so you know what to expect if you need to make a claim.
The Risks of Tornado Insurance
The biggest risk when it comes to tornado insurance and homeowners insurance in general is being underinsured. Insurance companies require at least 80% of your home’s reconstruction value be covered by dwelling coverage. Many homes are already underinsured and with the level of damage and destruction that tornadoes bring, it can be a very expensive surprise for you if your home is hit by one.
Some policies include the option for inflation adjustment, but it might not actually cover variable labor and material costs. This is especially true because regional inflation might severely raise the cost of materials and labor in your area following the aftermath of a tornado where many homes were damaged or destroyed.
Understand your policy’s dwelling coverage to ensure you meet the minimum requirement, and understand your policy’s limits. Some guaranteed or exceed replacement cost or actual cash value limits may be capped, so your home may be underinsured in the event of a tornado. Review your homeowners insurance policy and ensure that you have the proper coverage to repair or rebuild your home following a tornado.
How Much Does Tornado Insurance Cost?
You generally don’t need to pay anything more for tornado insurance since most standard homeowners insurance policies already offer coverage from tornado damage or destruction. However, it is still important to review your policy to ensure that your home and personal property are fully covered against tornadoes as your policy currently stands.
If you live in an area where tornadoes are a regular occurrence or risk, your homeowners insurance premiums already likely reflect that risk. While your policy might be more expensive, you should have the proper policy and coverage to protect your home and wallet from tornado damage or destruction. Still, it is important to review your current homeowners insurance policy and speak to an agent from your provider to ensure you have proper coverage at fair rates.
