Is tornado damage covered by homeowners insurance?

According to statistics, the United States sees about 1,000 tornadoes every year. These storms end up causing roughly $17 billion damage in property damage each year which is why carrying the proper amount of homeowners insurance is a necessity. Tornadoes can cause life changing damage and if you are uninsured or underinsured you may end up having to cover the cost of the damage or even rebuilding your home. 

Keep reading to learn everything you need to know about tornadoes and homeowners insurance.

Homeowners insurance and tornado damage

Almost all standard homeowner policies cover tornado damage. However, there are some areas where coverage for tornado or windstorm damage may require a separate rider or endorsement on your policy. 

 A homeowner policy protects you against tornado damage in a few different ways:

Structural damage to your home: If your home is hit by a tornado, a homeowners insurance policy will help cover the cost to repair or rebuild the home (up to your coverage limits) after a tornado strike. This could include repairs such as a roof blowing off, windows blown out or even a total collapse of your home. 

Personal property: It’s not just your home that can be damaged. All of your personal property inside your home can also be damaged or destroyed in a tornado. When it comes to personal property, homeowner policies can be replacement value or actual cash value. Here is a brief overview of the two:

• Replacement value: A replacement value policy will replace your possessions with brand new ones regardless of how old they were or the deprecation they experienced. As an example, if you have a 10-year-old TV, a replacement value policy will replace it with a brand new one of similar quality and size. 
• Actual cash value: An actual cash value policy on the other hand takes depreciation into account. This means that your 10 year old TV will be almost worthless as far as your insurer is concerned and the claim check you receive for it will most likely not cover the cost to replace the TV. 

While an actual cash value policy is cheaper, it is usually a much better deal to spend a bit more for a replacement value policy, the difference can be dramatic if you have to make a claim. 

Additional living expenses: This portion of your policy will cover expenses if you are forced to move out of your home while it is being repaired or rebuilt. It helps with expenses such as hotel bills, restaurant tabs and even costs such as dry cleaning. 

Windstorm damage can be excluded

There are areas of the country where windstorm damage is excluded from a homeowners policy or requires a separate deductible. Homes located in Tornado Alley, certain parts of Texas and Florida are examples where a windstorm deductible may come into play. 

If you live in one of these areas, you may need a separate windstorm policy, or a windstorm rider attached to your policy. This will cover damaged caused by wind, tornados or hurricanes. Unfortunately, these policies usually have a percentage deductible. 

This means that instead of a normal flat deductible when you make a claim ($500 or $1,000 are common) your deductible for windstorm damage will be a percentage of your coverage levels. Percent deductibles range from 1 percent up to 5 percent in most cases. As an example, if you are carrying $350,000 in coverage on your home and your deductible is 3 percent, your deductible would be $10,500 for windstorm damage. While this is expensive, it is certainly less than having to repair or rebuild your home on your own. 

The best advice is to check with your agent and read your policy to make sure windstorm and tornado damage is covered and if a windstorm deductible comes into play for tornado damage. 

What to do if you need to make a claim for tornado damage

If you have been hit by a tornado that severely damaged or destroyed your home, you should take these steps to ensure your claim is handled quickly and fairly:

• Itemize and document your damage: After a tornado or other major storm damages your home you should document the damage and itemize your losses as soon as it is safe to return to your home. Take photos and video of all the damage from different angles to help support your claim and make the adjusters job easier. 

Itemize your personal possessions that were damaged or destroyed, documenting the damage with photos or video. You will need to submit all of this to your insurer and adjuster so they can get going on your claim. 

If you need to move out of your home you will also need to keep receipts for hotels, restaurants and other daily expenses related to being out of your home. 

• Keep detailed notes: You should keep detailed notes on your interactions with your insurer. Jot down when you talked, who you talked to including their title and a brief overview of the conversation. This will help if you end up in an argument with your insurer over the claim amount.

• Claims are negotiable: Claim amounts are not set in stone and if you are unhappy with the amount being offered to cover your losses you can negotiate with your insurer. Be sure to have facts to back up your claims.