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Does Your Homeowner’s Insurance Cover Tornado Damage?

Even though tornadoes aren’t popular in the Twin Cities, they are the subject and fear of the Midwest and Minnesotans every summer.

For anyone from the Midwest, tornado drills and funnel clouds are part of the norm. But if you’re not from here, the fear of tornadoes can be a lot more extreme than reality. Tornadoes in the Midwest are like hurricanes in the Southeast and Monsoons in the Southwest.

It’s best to be preventative, because if damage from a tornado happens and you’re underinsured, it can cause some serious financial hardship.

Here’s how to understand if damage from a tornado is covered by your homeowner insurance.

Know the Risk: Tornados in the Twin Cities

The Twin Cities are located just beyond the Northeastern tip of Tornado Alley. Approximately 1,835 tornadoes were recorded in Minnesota from 1950 to 2016, with 30 making landfall in Hennepin County, which is where the Twin Cities are located. That’s roughly one tornado every other year, near the Twin Cities.

Understand What “Actually” Caused the Damage

You’ve got to think like an insurance agency when vetting the type of tornado coverage you need. As the saying goes, the devil is in the details. Here are some of the key items to check in your insurance policy.

Perils — Most homeowners insurance covers events called “perils.” These typically cover damage from things like lightning strikes, windstorms, hail, water damage and falling objects, which are all common causes for damage during a tornado. It’s important to check your policy to understand your specific coverage.

Dwelling Insurance — This type of coverage ensures that the insurance company will also help you rebuild your home if it is destroyed during a “peril.”

Personal Property Coverage — If you want to have an insurance company help replace personal possessions like computers, sound systems, and clothing, you’ve got to have some form of personal property coverage. It’s important to know the limitations of your policy. Know what type of damage is excluded from your policy. For example, a lot of personal property plans don’t replace items lost from the wind. Keep photos and receipts and proof of ownership of important items saved on the cloud.

Car Insurance Policy — Most car insurance policies offer coverage for damage caused by a tornado. However, this is usually included in a comprehensive insurance plan, which is not required by Minnesota state law to have. Check to make sure your auto policy has storm coverage.

Deductibles and Payouts — You will likely have to pay your deductible upon getting help from your insurance company. This can be anywhere from $500 to a percentage of the home’s total value. Also understand that there is a maximum that your policy will payout for your repair or your home to be rebuilt.

Depreciation — Whether it’s assessing the materials to use for your home repair, or how much you should get to replace personal items, know that the insurance company will likely calculate depreciation, in their favor. If you bought a new television last year.

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