If a natural disaster like a tornado hits your state, your state insurance department is there to ensure that insurance companies will meet their customers claims. They prioritize consumer protection and are there to help out if you have a complaint against your insurer.
insuranceQuotes.com recently met with John Doak, Insurance Commissioner of Oklahoma. His state suffers an average of 55 tornadoes every year; in 2013, 82 tornadoes touched down in Oklahoma. He discusses how homeowners can protect themselves against tornadoes and how to make the most of their home insurance coverage.
Q: What are your main roles and responsibilities as the Insurance Commissioner of Oklahoma?
A: My main role and responsibility for the state of Oklahoma is to educate the general public on insurance matters, regulate the industry and protect consumers. We have the responsibility of making sure insurers have the ability to respond whenever a consumer has an issue, and most importantly to ensure the solvency (of insurance companies) during major natural catastrophes.
Another component is to make sure consumers are treated fairly and in a responsible manner by the insurance companies when they do have a claim. Consumer protection is a very high priority for the state of Oklahoma.
Q: What tips and advice can you give about protecting yourself from the financial threat of a tornado?
A: The best thing for a consumer to do is to understand their deductibles. Find out if you’re subject to a flat deductible or, what’s getting more prevalent in the United States, wind-hail deductibles. That’s where you may have a separate deductible on a homeowner’s policy that would be subject to a tornado event or a severe weather hail event that has high winds.
For auto insurance, consumers need to make educated decisions about carrying full coverage comprehensive and collision. They may choose to drop these coverages once they have their financial obligations taken care of.
Also, (consumers should create and periodically review their) home inventory to make sure that they have the proper contents coverage. It can be frustrating for consumers who don't understand that they need to provide a home inventory list once they’ve had a major catastrophe or loss, to be able to meet the terms and conditions of their insurance policy.
Q: What’s the best way to do a home inventory?
A: Consumers can get a free downloadable home inventory through the National Association of Insurance Commissioners (NAIC) and Oklahoma insurance department websites. Many folks take (inventory) pictures with their iPhones today.
If you have pictures of your home, you can upload them to the cloud or keep on your phone (that would be with you) if you were to have a significant loss. A picture can be worth more than a thousand dollars.
Just close your eyes and think about what is in your kitchen, cabinets, closets, and living room—understand the value of paintings, fine art, and collectibles. In Oklahoma, many folks carry guns and have gun collections. They need to understand the specific (insurance) limits on those items so they aren’t underinsured.
Q: What are some aspects of insurance that are commonly misunderstood?
A: Many of the common misconceptions come back to needing a home inventory— (consumers) not knowing that they should have one. That can be a very high frustration point for a consumer who has lost their home or suffered damage.
(Another problem is consumers) not understanding those types of separate deductible that apply in Oklahoma and many other states.
To protect against that (problem), we’re strong advocates for consumers sitting down on an annual basis with their insurance agent or broker and going through the scenario.
Additional living expenses are often never discussed, to the satisfaction of consumers, when they initially buy their policy. Many don’t know how critical that component of insurance can be to maintain their lifestyle.
For a tornado in Oklahoma, it’s not out of the question for someone to be out of their home for six months to a year and a half, depending upon the availability of contractors in the area.
I think that’s one of the main issues: understanding the components of a policy. They’re all very important, not only for your contents, but the value of your home and making sure that data is up-to-date during a time of loss.
Q: What type of coverage is available for mobile homes in Oklahoma?
A: In Oklahoma we have a rural population and many folks find that mobile homes are very affordable. We have to make sure that there are insurance markets available for mobile home insurers and wholeheartedly believe in a free market open competition in our state for those companies to do business.
For a state with non-coastal borders, Oklahoma has more catastrophic losses than any other state. (There are specific guidelines when insuring) mobile homes, which vary by terms and conditions of the policy or underwriting. For instance, they may need additional tie downs and security features.
Q: Have you or your family ever been personally affected by a tornado?
A: I’ve lived in Oklahoma my entire life and was in the insurance business for 24 years before becoming a commissioner. I’ve interacted with consumers and family members that have had losses related to storm events and other types of events. It gives me a unique perspective as an insurance commissioner.
It’s very important that our department shows up and helps the consumers of Oklahoma. We want to make sure that insurance companies make the claims process seamless and timely.