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Home insurance: Does it guard against a tornado?

April 2011 will go down in weather history.

The National Oceanic and Atmospheric Administration says a record-breaking 875 tornadoes swarmed the United States that month. Insured losses for cars, homes and business property caused by tornadoes and thunderstorms that hit between April 22 and 28 may climb as high as $5.5 billion.

The April 2011 tornado outbreak is a stark reminder that it's critical for you to understand how home insurance can protect you and your assets if a twister touches down in your neighborhood.

The most critical thing to know: Most homeowner's insurance policies will cover damage from a tornado, even though the policy may not mention that particular brand of storm by name.

home insurance tornado

“A policy doesn’t use the word ‘tornado.’ It says wind or windstorm damage,” says Kevin Lynch, assistant professor of insurance at The American College in Bryn Mawr, Pa.

Here are three things to keep in mind regarding homeowner's insurance coverage for tornadoes:

The devil's in the details. The specifics of what's covered vary from policy to policy, so Lynch encourages homeowners to read their policies carefully. For instance, a lot of policies won’t cover landscaping, fences or outbuildings damaged by wind.

Different deductibles. Lynch says a policy often has separate deductibles for different types of damage. For example, the roof may have a 1 percent deductible while the deductible for the rest of the house is 2 percent or 3 percent.

Know your limits. “Homeowners should review their policy and check if the limits of insurance are enough in case they suffer a total loss,” says Kevin Foley, an independent insurance broker in New Jersey. “They should review the limits for the structure, their personal belongings, and ‘loss of use,’ which pays money for the insured to live elsewhere while his home is repaired.”

Experts offer six pointers for making the insurance claim process as smooth as possible in the wake of a tornado:

1. Take a home inventory.

Ronald Reitz, head of the public insurance adjuster company Quality Claims Management, says every homeowner should take a home inventory and update it annually. Walk through the entire property (inside and out) with a video camera, meticulously documenting what you have and how much it may be worth.

“That way,” Reitz says, “you already have your inventory done after the tornado hits. It’s a very emotional process to try and go through your scattered and damaged possessions after a disaster. Do it before you experience the loss.”

2. Line up the contractors.

Reitz recommends making a list of reputable contractors to call if your home requires substantial repairs after a tornado. Too often, he says, disasters like this attract scam artists who are merely preying on other people’s misfortune.

“I wouldn’t necessarily rely on the people who show up immediately after a disaster,” Reitz says. “They aren’t always the best people.”

3. Get your ducks in a row.

Before you even think about contractors, however, you should call your insurance company immediately after the damage has occurred and file a claim. Don’t clean up, don’t throw anything away and don’t try to make any hasty repairs on your own. This can hurt the possibility of getting your maximum claim amount.

home insurance tornado

“A lot of people’s first instinct is to clean up and throw things out right away,” says Tina Nicholson, a lawyer who specializes in insurance claims related to natural disasters. “You need to take photos and document it. And don’t throw away anything until the insurance company has someone come out and look at it.”

4. Prevent more damage.

Lynch says it's the homeowner’s responsibility to lessen any future damage from the elements.

“If there’s a hole in your roof," Lynch says, "you’re responsible to cover that hole and not leave it open to the weather for three days until the adjuster gets there. Also, put boards over broken windows and turn off the water if a pipe burst.”

5. Communicate clearly.

Homeowners should be careful about the information they provide their insurance company as well as the terminology they use in conveying the details of the damage. For example, there's a significant difference between water damage from a burst pipe and flooding. Make sure you communicate as specifically as possible to avoid parts of your claim being denied.

6. Don’t fret about funds.

Don’t worry about accepting a check for repairs and then discovering later that it’s going to cost more money than originally estimated.

“It’s not over when the insurance company hands you that check,” Nicholson says. “If you take that check, that’s not the end of it. You’re not admitting that’s the final amount, and it’s not legal for them to make you sign a release form in order to get your money. You can always call them back later if there’s more work to be done.”

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