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Do I Need Tornado Insurance?

Article Details
  • Written By: Jeany Miller
  • Edited By: O. Wallace
  • Last Modified Date: 30 September 2019
  • Copyright Protected:
    2003-2019
    Conjecture Corporation
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Tornadoes may strike in any region, although they are likely to occur repeatedly in designated areas. As a result, home owners must often know the coverage provided by their insurance policy. Windstorms and wind events may both be common inclusions of a home owner’s plan, but the extent of damage covered may be insufficient. Tornado insurance may thus be a requirement for those without adequate protection as well as those who live in high-risk areas. National or local governments as well as mortgage lending institutes may also delineate who needs tornado insurance.

Many insurance companies exclude certain coverage for home owners in high-risk weather areas. In the United States, for example, Tornado Alley is a region between the Appalachian and Rocky Mountains prone to seasonal windstorms. Additional areas that experience high levels of tornado activity include western Asia, northern Europe and the United Kingdom. Residents in some of these regions, however, struggle to obtain tornado insurance, largely because of the costs involved with repairing damage.

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For this reason, it is often important for home owners to be aware of the coverage afforded by their insurance policies. Those natural disasters likely to be covered by a standard plan include fire, lighting, hail and windstorms. The extent of windstorms can vary significantly, from a localized burst of wind to more organized storms. The damage caused by winds is also likely to vary, and home owners’ policies may offer only limited coverage. To illustrate, homes close to a tornado may be damaged by flying debris, but the insurance policy may pay only for repairs and not the cost to rebuild.

One of the best ways for people to understand their home owner’s policy and the details of its coverage is to meet with the insurance agent. He or she can likely answer questions regarding straight-line winds and tornadoes and how they are defined by an insurance policy. The agent can also likely explain those policies that protect against wind events, which is a category of weather likely to include tornadoes.

When a policy does not provide adequate protection against tornadoes, it may thus become necessary to purchase disaster insurance. This type of policy is likely to provide home protection against floods, earthquakes and wind or hurricane damage. Each natural disaster often requires its own policy, and underwriters are likely to dictate coverage requirements that relate to the deductible or condition of the home. Some companies, for example, may require home owners to replace a faulty roof before enacting the tornado insurance policy.

Once the insurance policy and related options are understood, people should determine if tornado insurance is relevant to their needs. In some instances, national or local statutes delineate those areas that do and do not need coverage. Similarly, insurance rates and deductibles may also be governed by law. At other times, the mortgage lender may require a home owner to purchase tornado insurance to safeguard financial interests.

The need to purchase disaster insurance is often conveyed to the home owner by the insurance agent or finance representative. When tornado insurance is required, the agent may refer the home owner to a local provider who specializes in such coverage. A national provider may also be required if local agents do not underwrite certain policies.

To maximize the benefits of tornado insurance, home owners are generally advised to receive annual construction estimates concerning their home’s rebuild cost. This can help policy holders revise their coverage as necessary. Home owners are also encouraged to purchase the guarantee for replacement building costs when available. If something happens to the physical structure of a home, this policy helps a home owner rebuild with less financial burden. This is especially important if a disaster influences a local economy, thus making it harder and more costly to rebuild.

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