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Tornado insurance: What is it and do I need it?

Fact-checked with HomeInsurance.com

In 2019, NOAA’s Storm Prediction Center recorded 1,520 tornadoes in the United States. If a tornado touches down in your area, it can be incredibly destructive. Not only do tornadoes create high winds, but they can also bring hail and flash floods. If you live in a state that gets hit by tornadoes frequently, you should strongly consider purchasing tornado insurance. 

Most of the damages a tornado could cause—like wind or hail damage—are covered by your standard homeowners insurance policy. However, your policy’s limits may not cover the full cost of the damages. Having a tornado insurance policy ensures that any damages are covered in full by your insurance. 

Which states are most prone to tornadoes?

Certain regions are at a higher risk of tornadoes than others. The majority of tornadoes in the United States occur in Tornado Alley, a collection of states in the Midwest and central plains. The states that are most prone to tornado activity include:

  • Texas
  • Oklahoma
  • Kansas
  • Nebraska
  • Missouri
  • Iowa
  • South Dakota

Florida, Louisiana and Mississippi also experience tornadoes each year due to tropical climates producing frequent thunderstorms and seasonal hurricanes that come with high winds.

Assess your tornado damage coverage

If you have home insurance, you’re covered for most tornado damage. Before you purchase tornado insurance, review your home insurance policy to determine what coverage you already have and how much. 

Here are the main types of coverage that tornado damage would be covered by.

Windstorm damage

Check your policy documents to find the limits of your windstorm coverage, and determine if you have a separate wind and hail deductible. Make sure your policy doesn’t explicitly exclude windstorm damage, and see if your policy includes additional living expenses coverage. That will help you pay for hotel and food expenses if your home gets damaged by a tornado and you’re unable to live there temporarily.

Flood damage

Tornadoes can cause flooding by ripping through pipes or other water storage. Standard home insurance policies don’t cover flood damage, but check to see if you have a flood insurance endorsement. If you have a mortgage, your lender may require you to purchase flood insurance, especially if you live in a high-risk flood or tornado area.

How to choose the right policy for tornado insurance coverage

To find the best tornado insurance policy, consider what type of claims payout you want. Your policy will either be actual cash value (ACV) or replacement cost value (RCV). An ACV policy is cheaper, and it reimburses you for losses with depreciation factored in. An RCV policy is more expensive up front but it reimburses you to rebuild your home and replace personal belongings at their current value.

You should also look into the policy’s limits. It should be enough coverage to protect the structure of your home and your belongings. Make sure that windstorm and hail storm damage is not written out of your policy or limited in any way. You should also use the policy limits to determine if you’ll need to purchase extra coverage for certain items.

Above all else, be prepared. Tornadoes can strike at any time, so purchase insurance before you need it. Create a checklist of ways you can prepare your family and your home for a potential tornado. Increasing the safety of your home and property can help you get a bigger settlement if you have to file a claim after a tornado.

Questions to ask about your tornado insurance coverage

Before you get a tornado insurance policy, there are a few questions you should ask your agent. 

What type of policy is it?

Find out if you have a named peril or open peril policy. In a named peril policy, you’re only covered from a specific list of events written in your policy. With an open peril policy, you’re covered from every event that is not explicitly excluded from your policy.

What is the deductible?

Your deductible is the amount of money you have to pay out-of-pocket towards a claim before insurance money will kick in. If you live in a high-risk area, you might have to pay a higher deductible. Know what your deductible is and that you can afford it.

What is the claims payout?

As mentioned, your policy will either reimburse you for actual cash value or replacement cost value. Understanding the difference is important because it will make a significant difference in your payout after a covered loss.

Cost of tornado damage

In 2018, insurance claims related to tornado and thunderstorm damage cost $14.1 billion. Tornado damage can be incredibly costly to fix, and a severe tornado can easily destroy a home in minutes.

Having tornado insurance is an added cost, but it’s well worth it. If you don’t have tornado insurance, your home insurance may not cover the full cost of damages after a tornado hits. In that case, you would be responsible for paying out-of-pocket to make up the difference.

Preventing tornado damage

Homeowners who live in high-risk tornado states can protect their home against severe tornado damage. Here are some things you can do:

  • Secure loose items on your property, such as outdoor furniture, plants, and yard equipment.
  • Keep up with landscaping to avoid overgrown trees that could fall during a tornado.
  • Properly store flammable liquids and keep hazardous chemicals in a secure place.
  • Keep your car in the garage.
  • Create a safety kit with nonperishable food, water, a first aid kit, flashlights and a battery-powered radio.
  • Make a safety plan with your family so everyone knows what to do in the event of a tornado.

How to file a tornado damage claim

If your home is damaged or destroyed by a tornado and you have to file a claim, time is of the essence. When it’s safe, inspect your property and determine what has been damaged. Then, contact your insurance company to request for an adjuster to survey the damage in person.

The adjuster will visit your home and assess the extent of the damage to your home’s structure and your personal belongings. They will help you understand what is and isn’t covered by your policy based on the damages. Once your claim is filed and approved, you’ll receive your payout and can start making repairs.

The takeaway

  • Having tornado insurance is a valuable supplement to your home insurance policy.
  • Tornado insurance can increase your coverage limits for wind and hail storm damage.
  • To choose the right tornado insurance policy, talk to an agent about the coverage limits, deductible and claims payout.
  • Determine if an ACV or RCV policy is better for your needs and budget.
  • Take preventative measures to protect your home against tornado damage to increase your payout after a claim.

If you live in a state that is prone to tornadoes, having tornado insurance can save your finances. Although you’ll pay an additional fee for tornado insurance, it’s worth the cost. Having tornado insurance can give you peace of mind knowing that your home and your belongings are protected from tornado-related damage.

Before purchasing a policy, understand the coverage limits, deductible, claims payout and exclusions. Know exactly what’s covered before you need to file a claim. Even if you’ve never experienced a tornado before, it’s a good idea to purchase coverage before you need to use it.

Elizabeth Rivelli

Elizabeth is an insurance writer for coverage.com, where she covers insurance providers and reviews policies to help consumers find comprehensive and affordable coverage for every area of their life. She has more than three years of writing experience for top online insurance and finance publications.

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