- Wind and hail are the leading causes of homeowners insurance losses, accounting for more than one-third of damage.
- Tornado damage is covered under a standard homeowners insurance policy, but there may be policy limits.
- Many states require your homeowners policy to have a wind deductible separate from the standard deductible.
- Living in a tornado-prone area may increase your homeowners insurance premiums and deductibles significantly.
You don’t have to live in Tornado Alley—which includes the Midwest and central plains states most prone to these storms—to be at risk for a tornado popping up where you live. Tornadoes in the mid-Atlantic and Northeast are not as rare as you might think. Some states, such as Virginia, can experience up to 15 tornadoes annually.
According to the Insurance Information Institute, wind and hail damage is the leading cause of homeowner insurance losses, accounting for more than a third of damage in 2019. No matter where you live, it’s important to make sure you have the tornado coverage you need. But do you need separate tornado insurance or is your standard homeowners policy enough?
“Standard insurance does cover tornado damage,” says Ian Gutterman, CEO of Informed Group, which educates consumers on the insurance industry. “There aren’t any exclusions. The biggest issue would be whether you have the right coverage.”
Read on to find out how your homeowners insurance can protect you in the event of a tornado, whether you should have additional coverage and, if so, how much you can expect to pay.
Inside this article
How much tornado coverage do I have on my policy?
A tornado is typically listed as a peril that’s covered in standard homeowners insurance policies. That’s good news if you live in an area that’s prone to tornadoes.
“Unlike flood damage caused by rising water—which is not covered under a standard homeowners policy—tornadoes and wind events causing damage are generally included as covered items,” says Alan Himmel, founder of Allstar Public Adjusting Inc.
There are three different parts of your standard homeowners policy that could provide protection for damages sustained during a tornado:
Dwelling coverage: This portion of your policy covers damage to your home. Whether your home simply needs a few repairs or is entirely destroyed, your dwelling coverage should take care of it up to your insurance limit.
Personal property coverage: Also included in a standard homeowners insurance policy is protection for your personal belongings. If items in your home are damaged or destroyed by a tornado, this part of your policy will cover them.
Loss of use coverage: If your home is damaged in a tornado, you may need to stay somewhere else until repairs are complete. Falling under “loss of use,” this portion of your policy covers you for additional living expenses during that time.
What’s not covered?
Just as important as knowing what is covered by your homeowners insurance policy in case of a tornado is knowing what’s not covered.
First, there are certain hazards that aren’t covered by homeowners insurance—no matter what the cause. Take flooding for instance: If a tornado causes a broken pipe or another issue that creates flooding in your home, that damage won’t be covered by your standard policy.
It’s also important to note that even for damage that homeowners insurance does cover, it may not reimburse you for the full replacement value of your property or belongings.
“Many policies now only pay for roof damage on a depreciated basis,” says Gutterman. “This means as your roof ages, the insurance company pays for less. For example, “a 10-year-old roof might only be 50% covered by insurance,” he says.
To address that gap, many insurance companies offer replacement cost coverage, which covers the cost of a new roof.
How much does adequate tornado coverage cost?
For certain hazards, including flooding and earthquake, you need a separate insurance policy or an addition to your current homeowners insurance policy to have coverage. The good news is that isn’t the case for tornadoes. Wind damage, including that from a tornado, is covered under a standard homeowners insurance policy.
But how do you know if it’s enough? No one expects to lose their entire home in a tornado. But if you live in or near, say, Tornado Alley, that’s a possibility. So you definitely want to check your policy to make sure that if your home is destroyed, you have enough coverage to rebuild.
Areas that often experience extreme weather can have an impact on your homeowners insurance costs, including increased premiums, since the insurance company takes on more risk to insure those homes.
“If you compare the cost of an insurance policy in a very low-risk state such as Delaware versus a state such as Kansas, you will see that the cost in Kansas, which is a state known for tornados, would be many times higher,” says Himmel.
Supporting Himmel’s claim: According to the Insurance Information Institute, the average homeowners insurance premium in Kansas in 2018 was more than $1,600, which is hundreds of dollars higher than the national average and more than double the annual rate found in some states.
Tip: If you live in an area that’s prone to tornadoes, budget accordingly. Double-check the wind and hail deductibles on your insurance policy and be sure you have an emergency fund set aside to cover it.
The higher premium isn’t the only cost you can expect. Some insurance companies, and certain high-risk regions, may require a separate deductible for wind damage.
“In many states, there is a wind deductible,” says Gutterman. “Most homeowners are unaware of this. This deductible is often much higher than your standard deductible. For example, if you have a $500,000 home with a 1% wind deductible, you have to pay $5,000 for a claim even though your overall deductible may only be $500.”
According to the International Risk Management Institute, this separate deductible is often expressed as a percentage of your home’s value or your dwelling coverage limit, whereas a standard insurance deductible is usually expressed as a flat number.