If you own a home or operate a small business, you probably need to purchase homeowners or commercial insurance to protect your assets from hazards like fire, natural disasters, and vandalism. Tornado insurance is an optional coverage that can protect your home and business against such hazards. However, with so many questions surrounding the topic of Tornado Insurance, it’s no wonder so many people remain unfamiliar with this essential piece of protection. In this article we cover the most important FAQs about Tornado Insurance and provide practical tips to help you get the most out of your coverage.
What is Tornado Insurance?
Tornado insurance is coverage that protects you and your assets against the risk of a tornado affecting your area. This is separate to natural disasters like flooding and fire which are covered by other types of insurance. Windstorm coverage is available from the vast majority of all insurance companies and is an important part of your overall insurance protection. To determine what type of coverage you need, you’ll need to know the maximum wind speed your area is known to experience in a tornado. In most areas, the maximum wind speed is either F2 (112km/h) or F3 (153km/h). Consequently, a tornado that could cause F3 damage could be as short as 400m or as long as 2.5km in length.
How much does a basic Tornado Insurance policy cost?
It depends on a number of factors, including your age, location, and type of coverage. The average insurance cost for a basic policy is around $250 per year. A basic policy covers you and your property up to certain limits. Generally speaking, if winds are less than these limits (e.g. F1 winds), then you don’t have coverage against a tornado. If winds are greater than these limits (e.g. F2 or F3), however, you can receive up to $100,000 of coverage. If you’d like more coverage for your extra premium, you may be able to purchase Professional Windstorm coverage, which covers events up to F5 (with the extra premium).
Is there a Premium Discount for combined Dwelling & Business coverage?
You could save a few dollars on your policy if you add the Combined Dwelling & Business coverage option. Some insurance companies will discount your premium by as much as 40% if you choose this option. Plus, this is a great way to protect your home and business from a variety of hazards including fires, storms, and vandalism. Combined Dwelling & Business coverage can be a good option if you operate a small business or have a rental property that’s also your primary residence.
Can you get more coverage for an additional premium?
Yes, but only if you have a Professional Windstorm policy. Professional coverage can be added as an additional premium to your basic policy. Generally speaking, professional coverage costs around $300 per year. So, if you’re interested in protecting your assets and assets up to a higher wind speed (e.g. F5), you’ll need to purchase a Professional Windstorm policy. If the wind speed is higher than F5, the structure may collapse or be destroyed. Your assets, such as your home, office building, and contents, would be protected against this type of extreme event.
Are There Any Required Conditions to Get Tornado Coverage?
No. There are no conditions required to get basic Tornado Insurance, although some policies may exclude certain locations or exclude certain wind speeds. There are also no restrictions on where you may get this coverage. If you don’t have comprehensive coverage on your home, you may find it expensive or difficult to get an insurance policy. A standard homeowner’s policy may not cover the damage caused by a tornado. For this reason, it’s important to have some sort of coverage that will protect your assets and income.
Should You Purchase Optional Coverage as Well?
Yes, we highly recommend it. If your area experiences a lot of tornadoes, we recommend buying both Basic and Professional Tornado Insurance. This is because many tornadoes only cause minimal damage. In these cases, you may not need to protect your assets with Professional Windstorm coverage. However, if your area experiences a particularly severe tornado or if you live in a high-risk area, this is the coverage you’ll need to protect your assets from the full force of a tornado. With both types of coverage, you can rest assured your home and assets are adequately protected from a variety of hazards including fires, storms, and vandalism.
Understanding the Limits of Standard Tornado Insurance
If the wind speed is less than the standard wind speed threshold of 113km/h, then your home isn’t covered against a tornado. Therefore, the only time you’ll receive coverage is if the wind speed is greater than 113km/h. As previously mentioned, the standard wind speed threshold for a tornado in most areas is 113km/h. If the wind speed is lower than this, then your assets are not covered against a tornado. In some areas, the standard wind speed threshold for a tornado is 120km/h, while in other areas it is 130km/h. It’s important to know the standard wind speed threshold for your area so you know if you’re getting coverage.
Final Words
Tornadoes pose a significant threat to life and property in many areas of the country. Coverage against this threat is available from most insurance companies and provides important protection against these events. The Federal Emergency Management Agency publishes a list of tornado-prone areas. If you live in a high-risk area, we recommend taking the time to review your policy and upgrade your coverage.
