Understanding Tornado Insurance Basics [After the Twister]

According to the Insurance Information Institute (III), about 1,200 tornadoes occur annually in the United States. While they may not be as damaging as hurricanes or wildfires, strong tornadoes can cause significant destruction, wiping out homes, businesses, and trees.

Tornadoes can produce winds over 200 miles per hour and sometimes bring hailstorms. If you live in "tornado alley" or in states with frequent high winds, you may need tornado insurance.

This article will cover everything you need to know about tornado insurance, including whether house insurance covers tornado damage and how much it costs.

Key takeaways

• Most standard home insurance policies cover damage from tornadoes and other wind-related issues. Some insurance providers may have separate deductibles for wind and hail in areas where tornadoes are common.
• Flood damage isn't covered by standard home insurance.
• If you live in a tornado-prone area, homeowners insurance rates may be higher.
• Tornado insurance costs vary depending on location, home value, and coverage needs.
• Proper home preparation can reduce the risk of severe damage from tornadoes.

What is tornado insurance?

Tornado insurance is a type of coverage that protects your home from damage caused by tornadoes. Typically, tornadoes can cause damage through strong winds, hail, and sometimes even water damage. 

Often, wind and hail damage is covered under your home insurance – as "insurance perils." Perils are events that can harm your home or belongings, such as theft, fire, or storms. 

The specific perils covered depend on the type of home insurance you have. Some common perils include fire, theft, lightning, sleet, wind, ice, snow, hail, vandalism, smoke, and freezing.

If you reside in "tornado alley," an area in the southern plains from central Texas to northern Iowa and from central Kansas and Nebraska to western Ohio, you may need extra coverage for damage from high winds. 

This is because the region frequently experiences tornadoes each year.

Causes of tornado damage

Tornadoes can cause extensive damage through high winds, flying debris, and heavy rainfall. Some common causes of damage include:

• High Winds: Tornadoes can produce winds exceeding 200 mph, capable of ripping roofs off buildings and hurling debris.
• Hail: Tornadoes often come with severe thunderstorms that can produce large hailstones, damaging roofs, vehicles, and other property.
• Flying Debris: Objects caught in the wind, such as branches or construction materials, can become dangerous projectiles. This may cause damage to windows, siding, and more.
• Flooding: Heavy rains accompanying tornadoes can lead to flooding, which is not typically covered under standard homeowners insurance policies.

Tornado insurance vs. hurricane insurance

Tornado and hurricane insurance cover damage caused by strong winds but differ in scope and specifics.

Tornado coverage is usually part of a standard homeowners policy and covers damage from tornadoes, which can occur almost anywhere in the country.

In contrast, hurricane insurance may require additional endorsements or separate policies, especially in coastal areas prone to hurricanes. 

Homeowners must understand the differences and ensure adequate coverage for both types of storms.

Does homeowners insurance cover tornado damage?

Are you wondering, 'Is tornado damage covered by homeowners insurance?'

Luckily, most standard homeowners insurance policies cover damage caused by tornadoes and strong winds – unless your policy explicitly excludes wind damage. 

It's crucial to note that flooding, which may accompany storms with tornadoes and heavy rains, requires separate insurance coverage.

When it comes to tornado damage, the home insurance policy typically includes:

• Dwelling Coverage: This coverage helps cover the structure of your house and attached structures, such as decks or garages.
• Personal Property Coverage: This covers your personal belongings if they are destroyed or damaged. 
• Loss of Use Coverage: This tornado insurance coverage pays for temporary housing and other living expenses, such as food and Laundromats, if a disaster leaves your property inhabitable.

Tornado coverage is typically included in a standard home insurance policy. However, if you live in an area prone to tornadoes, you may have to pay more for your homeowners insurance because of the higher risk.

Most home insurance policies don't have specific exclusions for tornadoes. Similarly, many renters insurance also covers personal property damage caused by tornadoes. 

However, since every policy and company can differ, it's better to review your policy and talk to your agent as part of your tornado preparedness plan.

Tornado insurance coverage limits and deductibles

When you file a tornado insurance claim, you'll usually have to pay your homeowners insurance deductible first – the amount you pay before your insurer covers the rest of the claim.

Also, remember that your policy has limits, which is the maximum amount it will pay for a covered loss. Your insurance company can help you review your policy to ensure coverage limits are enough to repair or rebuild your home.

For replacing your belongings, insurers typically reimburse in one of two ways:

• Actual cash value: This pays the current value of the item minus depreciation.
• Replacement cost: This reimburses the cost of replacing the item with one of similar type and quality.

You can choose which type of coverage you want when buying insurance. If you pick replacement cost coverage, your premium might be higher.

Watch out for wind deductibles

In some cases, policies may have a separate windstorm deductible, especially in states with severe windstorms, such as Oklahoma, Texas, and the Midwest. 

These deductibles usually range from 1% to 5% of your dwelling coverage. For instance, if your house is insured for $300,000 and you have a 5% wind deductible, you would need to pay $15,000 for wind damage repairs before your insurance coverage starts.

How much does tornado insurance cost?

Want to know "How much is tornado insurance?"

The tornado insurance cost can vary depending on where you live. The premiums are typically higher in states with a high risk of tornadoes – such as those in Tornado Alley. 

On average, homeowners insurance in the United States costs around $1,411 per year, but tornado insurance can be about $1,700 annually. This means the total cost, including homeowners insurance, would be around $3,111.

The exact amount you'll pay depends on several factors, such as your home's value, location, specific risk level, claims history, coverage limits, and deductible.

If you add flood insurance, windstorm coverage, or extra coverage for loss of use, your total insurance costs will increase.

How to buy tornado insurance

To buy tornado home insurance, review your existing homeowners insurance policy to see what coverage is already included.

If you need additional coverage, contact your insurance provider to discuss your options. Consider adding an insurance rider for specific items or situations not covered by your standard policy. 

It's best to shop around and compare quotes from different insurers to find the best coverage for your needs and budget.

Tips for protecting your home from tornadoes

If you grew up in a place where tornadoes are common, you're probably used to tornado warnings and hearing sirens. Often, these warnings don't lead to an actual tornado. 

However, this doesn't mean you should show apathy towards these risks. Even if you hear the sirens repeatedly, you must take tornado preparedness seriously.

Listed below are a few things you can do to prepare your house for a tornado better – and some may even lead to discounts on your homeowners insurance:

• Start home inventory: Make a list of your personal belongings and save it in an easily accessible place, such as a note or document in a cloud drive. Include details about each item, like the purchase year, model, brand, and cost. This information can help your insurance provider determine the replacement value. If possible, take photos of your items.
• Maintain the property: Keep your property in good condition. For example, trim dead tree branches or secure loose items such as trampolines. This can help protect your property and even save lives.
• Know where to find shelter: During a tornado, a safe place is a room on the ground floor or in the basement without windows. It can be a bathroom, center hallway, or closet – preferably away from heavy objects such as a refrigerator or piano on the ground above you. If your house doesn't have a safe room, find one nearby at a neighbor's house or a local school. It's best to know this before a tornado happens.
• Create an emergency plan: Sit with your family to create an emergency plan. Decide who will get children, pets, or family members with mobility problems to the designated shelter. If possible, practice tornado drills with everyone so that they know what to do.
• Stock tornado shelter: If the tornado shelter is at your house, make sure it has essential supplies. This includes a first aid kit, water, snacks, a light source, and necessary medications.

Still have questions?

Interested to learn more about tornado insurance and how to protect your home? Here are some frequently asked questions.

Is tornado coverage worth it?

Yes, especially if you live in a tornado-prone area. Tornadoes can cause significant damage; having the right coverage can save you from financial hardship.

Do you need tornado insurance in Texas?

Yes. Since Texas is one of the states in the Tornado Alley, it experiences a high number of tornadoes each year. This makes tornado insurance a wise investment for homeowners in the state.

What is the difference between a tornado and a windstorm?

A tornado is a specific type of windstorm characterized by a rotating column of air extending from a thunderstorm to the ground. General windstorm coverage may include damage from straight-line winds, hurricanes, and tornadoes.

How can you deal with damage after a tornado?

After a tornado, document all damage with photos and videos, and contact your insurance provider to file a claim. Make temporary repairs to prevent further damage, but keep receipts for any expenses incurred.

What is a tornado weakness?

Tornadoes are less likely to form in areas with stable, cool air masses. However, they can still occur in these conditions, so always be prepared.