Does your home insurance cover tornado damage?
Good question! Imagine coming home from work to find your entire neighborhood, not just your house, completely destroyed. That’s what happened to thousands of homeowners in Moore, Oklahoma, on May 20, 2013, when an EF5 tornado destroyed more than 13,000 homes, killing 25 people and causing more than $2 billion in damage.
Tornadoes can strike almost anywhere in the United States, but they are particularly common in the Midwest and South Central US, the region known as Tornado Alley. The insurance industry classifies tornadoes as windstorms, and most homeowners policies will cover damage to your home in a tornado, including your personal belongings, the cost of loss of use of your home, the home itself, plus any additional structures on your property, such as sheds, carports, and garages.
But as with all things insurance, don’t assume your policy does. Pull it out and read the exclusions and limitations, or call your agent and ask. (It’s also worth repeating that no standard homeowners policy covers flooding or water damage that can accompany a tornado. You need separate coverage for that.) While you’re at it, see how much coverage your policy provides. Even with the recent drop in property values, if your policy is more than a few years old, it may not be enough to repair or replace your home and its contents in today’s market.
What is covered in standard homeowners policies?
Windstorm is one of many perils classified by homeowners insurance policies. Others include fire, theft, and vandalism. These risks are usually covered in open risk insurance policies as standard covers, sometimes called package policies. But you should be aware of the limitations of homeowners policies, especially with regard to tornado insurance.
Unless you get additional coverage, known as a policy extension, your standard homeowners policy may not cover all of your losses if your home is leveled by a tornado. Some insurance providers limit the amount of damage your policy will cover, leaving you with a high deductible. Most insurers restrict windstorm damage coverage if you live in Tornado Alley. If you live in an area prone to tornadoes, we recommend that you review your homeowners policy and purchase specific extended coverage for perils.
The problem for many homeowners in Tornado Alley is that the risk of tornado damage is so much higher that an insurance company asks not “if” but “when”. In such cases, the only way to get adequate tornado insurance is to add an endorsement to your standard policy. Additionally, many state governments in Tornado Alley offer separate insurance policies to continue where the insurance industry refuses to go. The best way to know if you have adequate tornado insurance is to carefully read your policy and talk to your insurance agent.
What to do before a tornado damages your home?
Strong tornadoes typically strike in the spring and summer, so now is the perfect time to make vital preparations. Review your homeowner’s insurance policy carefully to make sure you have enough tornado insurance to recover from a total loss. If your home is covered for $200,000, you must bring an additional $100,000 to replace your lost belongings.
Take a complete inventory of your possessions and file this list, as well as other important documents, in a safe deposit box away from home. It’s also a good idea to take videos or photos of your home and major possessions, which will provide your insurer with a valuable record if everything is lost in a tornado.
Definitely have a plan so you and your family know what to do if a tornado strikes. Know which evacuation routes to take or, if escape is impossible, take cover in a safe room, such as a basement.
What to do after a tornado damages your home?
But what to do after a tornado? The sooner you file your claim, the sooner your insurance will do its job. If your home is simply damaged but still livable, carefully document each repair you make so your insurance will reimburse you. If you have to live in a hotel for a few weeks, save all receipts so that living expenses can be reimbursed.
The first settlement check you receive will most likely be a down payment rather than a final payment. Even if it is a settlement on the spot, you have the right to reopen your claim later and request additional damages. If that’s the case, he’ll be only too happy to put a video or detailed list of your home and its contents in an external safe.
If your home is foreclosed, your settlement check for home repairs will be made out to you and the lien holder, who likely has the contractual right to withhold a portion of the settlement payment until you can show that they have been mortgaged. Made all necessary repairs. You are, of course, responsible for the deductible according to your policy.
Knowing what your homeowners policy does and does not cover is essential to protecting your family and understanding the limits of tornado insurance coverage.
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