Tornado Insurance: What Does It Cover and Do I Need It?
Tornadoes can happen in any state in the U.S., and with more than 1,200 occurring annually, they are not uncommon. If you live in Texas, Kansas, Florida, Oklahoma, or Nebraska — the five top states for tornadoes — be sure your homeowners insurance has tornado coverage.
Even if you don’t live in a state where tornadoes are common, it’s worth noting that the only state that hasn’t had at least one tornado in the past decade is Alaska. No matter where you live, checking your home insurance policy for what it covers is a smart move.
What is tornado insurance?
Tornado damage can be caused in different ways, and so insurers include coverage for tornadoes as different parts of your policy, though mostly tornado coverage falls in the category of hazard insurance.
For example, the damage caused by the wind that occurs with tornadoes is covered by your windstorm coverage. This is usually part of a basic HO-3 policy, the most common type of homeowners insurance. Water damage from a tornado, however, may or may not be covered by a basic coverage. Water that damages your property after rushing in through a broken window is probably, though not always, covered. Water that results in flooding is not and requires a separate flood insurance policy.
It pays to read and understand your policy before you’re faced with damage from a tornado. Every homeowner policy is unique and is based on the criteria of each individual policyholder. Whether coverage for the wind and water of a tornado is included in your policy is something you should find out when you first purchase the policy.
Do I need tornado insurance?
It’s a good idea to have it. With climate change, tornadoes are becoming more frequent in the U.S., which is the world leader in the number of tornadoes annually. If you live in “Tornado Alley,” the area of America that stretches north and east of Texas, you’re particularly at risk — but as we noted above, tornadoes happen across the U.S., even in some states where they are less common, but not unknown.
Top 10 states most affected by tornados
The ten states with the most average tornadoes per year, according to the National Oceanic and Atmospheric Administration (NOAA) are:
- Texas: 155
- Kansas: 96
- Florida: 66
- Oklahoma: 62
- Nebraska: 57
- Illinois: 54
- Colorado: 53
- Iowa: 51
- Minnesota: 45
- Missouri: 45
Average cost of tornado insurance
According to the Insurance Information Institute, the average cost of homeowner insurance is $1,211 per year. A portion of that premium covers you for tornado damage. Your policy may also include something called a windstorm deductible that would kick in if you made a claim based on tornado insurance.
Normally, your deductible would be a dollar amount — say, $1,000 — that you would pay before the insurance pays the rest. In contrast, a windstorm deductible is a percentage of the value you have insured your home for. So, if your home is insured for $300,000, and the windstorm deductible is 5 percent, you may have to pay the first $15,000 of a claim instead of $1,000. This raises the average cost of tornado insurance considerably.
Another factor that impacts the average cost of tornado coverage is flooding. Flooding generally happens two ways in a tornado: either water enters the property through a damaged roof or window, or the tornado causes generalized flooding. If the former happens, you should be covered because your insurer will reason that it’s the wind that damaged the roof, which caused the water damage.
But if generalized flooding occurs, and there is damage to your home because of it, you will not be covered unless you have a separate flood insurance policy from the Federal Emergency Management Agency (FEMA). Your insurer manages this program. It’s created by the government and covers damage up to $250,000 caused by flooding.
What does my tornado insurance cover?
As we have noted, tornado damage can be caused by different aspects of the tornado, and thus are covered in different ways by your insurance agency. Damage caused by the wind or hail that are part of a tornado are covered by most basic HO-3 homeowner policies. This includes damage from falling objects, such as a tree that falls on your house and damages the roof and gutters.
Water damage is a bit more tricky, though, depending on the source of the water. If it’s rain that comes through a window broken by the tornado, and it damages your new living room suite, you are probably covered. If, however, the tornado damages the water main line on your street and there is flooding in your basement, you will only be covered if you have an additional flood policy.
Something else to be aware of if you live in a tornado-prone state: your homeowner insurance won’t cover any damage to your car if, say a tree falls on it or the garage roof collapses during a tornado. Talk to your auto insurance agent to ensure that your car is covered for tornado damage.
Finally, note that your coverage is different depending on whether you have actual cash value coverage or replacement cost coverage. Actual cash value takes into account the depreciation of your home and belongings and is cheaper to buy. So, if that couch cost $2,500 new but now, five years later, is worth $500, that may be all your insurer will pay to cover it.
If you have replacement cost coverage, however, your insurer will reimburse you for the cost it would take to buy a new couch of roughly the same value as your old one. So, you’d get an amount closer to the original $2,500. Replacement cost coverage is more expensive but can be a lifesaver if you have significant losses after a tornado.
Steps to prevent tornado damage
While you can’t prevent storms themselves, you can take steps to minimize damage. Here are some things you can do:
- Maintain your home and property: Insurance will not cover damage that has, as its root cause, your lack of proper care. For example, if a tree falls on your house during a tornado, you might not get covered for it if the insurance adjuster finds that the tree was rotted out near the base and ready to fall over.
- Prepare for a tornado: If you hear a tornado warning, put away any garden furniture, tools, grills and other outside items that could be blown into your house during high winds. If possible, garage your car or at least park it away from any overhanging branches or large trees.
- Board your windows: If it’s possible, board up your windows to keep them from breaking due to flying debris.
- Make quick fixes: If you have enough warning that a tornado may be coming, walk around your house with a hammer and nails and look for loose shingles and do a quick and temporary fix if you have time. Later, when the tornado has passed, you can have a professional do a more permanent fix.
- Use hurricane clips: If you live in a tornado-prone area, have a professional add hurricane clips or straps to your roof. These are relatively inexpensive but can strengthen the ability of your roof to withstand tornado damage.
- Install a strong garage door: Again, if you live where there are many tornadoes, consider having your garage door replaced with a door that is designed to handle the water and wind stress of tornadoes and hurricanes. FEMA has guidelines on this that are helpful.
- Know how to turn off utilities: Well before any tornado warnings, make sure you know how to turn off your home’s electrical, gas, and water switches and valves.
These steps can help you avoid more severe damage. If you take these precautions and still have to file a claim, you can at least know you did everything you could to protect your home.