Does Your Homeowners Insurance Cover Tornado Damage ?

The recent killer tornado outbreak in central Florida is being referred to as Florida's second worst in recorded history. In light of this recent event, I feel compelled to offer some important advice to ensure that if you suffer a loss from a tornado, that you do not lose everything and that you receive the most reimbursement from your homeowners insurance company.

Before you suffer tornado damage (or any damage):

1. Tornado damage is usually considered wind damage under your homeowners insurance policy. But to be on the safe side, call your insurance company or agent and be sure you are covered for tornado damage. If you are not covered for tornado damage ask the agent what coverage is available.

2. If your home is in an area that has never had a tornado or isn't located in what is referred to as Tornado Alley, please do not let your false sense of security cloud your judgment regarding this insurance coverage. Tornadoes can and do occur in every state and can happen anywhere at any time of the year.

3. Photograph your belongings and make an itemized list with the date of purchase and price you paid for each item. The best way to do this is to have a list ready and each time you purchase an item, add it to the list. There is also free software available online that you download and use to insert the photos and all the other details of each item you own. You will need this information to minimize your losses.

4. Take photographs of different angles of the inside and outside of your home, including floors, walls and ceilings of each room. Then photograph any sheds, garages, fences, barns etc and note their condition of either poor, good or excellent. This is because most times your homeowners insurance company has assessed your buildings and will not know what the true value was before the loss. If a building were a complete loss how would you prove your shed or garage was in excellent condition if it was old and you remodeled it? That is where the photos will come in to maximize your settlement.

After tornado damage (or any damage) has occurred to your home:

1. Call your insurance company the minute you are safely able to. There may be a time limit on how long you have to submit a claim so if have suffered a loss, ask if you are covered, how to submit a claim and how long you have to do so. Please remember that insurance claims can take a long time to be completely processed, sometimes months, especially if there was a big loss in your area. The most damaged homes more than likely will be taken care of first! With that in mind, it is in your best interest to file your claim with all supporting documents at the absolute soonest time after you have had the damage occur.

2. If you do not have an itemized list and photographs of your belongings, contact your credit card companies to get a list of all items you have purchased which will give you the details of the date of purchase, item, price and other details that will be essential in your attempt to recover as much damaged property as possible. (Keep in mind insurance companies do NOT want to pay anything and they will nickel and dime you on every item and what they are willing to pay you to replace or repair each item. You can avoid most of the homeowners insurance companies ridiculously low estimates of your belongs if you have adequate proof of the cost of each item you want to include in your loss claim.)

Please either print this out and highlight the questions you should ask your homeowners insurance company or take some notes as you read the below.

Call your homeowners insurance company TODAY and ask them if your policy is what is commonly called an "Actual Cash Value" policy or if it's what is commonly called a "Replacement Cost Coverage" policy and what items there may be a maximum limit on. Some companies for example will limit coverage on old roofs to minimize their costs. Valuables such as jewelry, collectibles and computer systems may need additional coverage, ask your homeowners insurance company about this!

The difference in the two coverage types sound easy enough but I'll give you an example to make it easier for you to realize what your policy covers and what you may be risking.

The first option "Actual Cash Value" is exactly as it reads. It means that you are only covered for the value of the item at the time of loss and let's say you have a TV that you paid $2,000.00 for 3 years ago. You may be in for a big surprise at what they are willing to pay you for that item after they use their handy depreciation chart. Ninety-nine percent of the time you would never get enough to replace or repair the item that was damaged, you will get far less and be forced to buy a smaller version or a used item.

The second option "Replacement Cost Coverage" covers each item based on the amount it would cost to walk into a store and buy the exact item or one of similar quality at the time of the loss.

While on this topic of homeowners insurance and making a list of what to ask your insurance company, (You are making that list right now right?) I also recommend you ask about surge protection from lightning strikes. Tornadoes usually spawn from severe thunderstorms and can have intense cloud to ground lightning. If the tornado spares your home, the lightning may not and it can actually fry all of your electronics. Be sure you are covered for this also and you may want to ask whether you are covered for hail damage, as storms can contain huge hailstones that can cause significant damage to your property.

In closing I urge everyone to see what the difference in the cost of your homeowners insurance premium is between Actual Cash Value and Replacement Cost Coverage. You may be pleasantly surprised that it is a mere $300.00/year or less. It is usually in the area of 10% of your current premium to add replacement cost coverage to your policy. Personally I only pay an extra $100.00 or so per year on my premium and if I ever suffer a loss I will be able to replace everything I own and have proof of.

Don't forget to compile the proof today! Do not wait for damage to occur, doing so will cause you too much work, headache and misery. You will not only have to remember every piece of clothing, gift, knick knack, etc that you owned but you will have to track down every bit of information on every single piece you want to include in your claim.