Although North Dakota is far removed from the infamous "Tornado Alley," twisters are still a common occurrence in the state. In fact, each year North Dakota residents experience dozens of tornadoes. Is your homeowners insurance sufficient to help you recover following the destructive power of a tornado?
Before you search for tornado insurance, however, there are several factors to consider.
North Dakota Tornado Facts
According to the Tornado History Project:
- The most severe tornado to hit North Dakota struck Cass and Clay counties in Minnesota and traveled west toward Fargo in 1957, killing 10, injuring hundreds and causing tens of millions of dollars in property damage.
- North Dakota experienced 56 tornadoes in 2012.
- A 2011 tornado that struck LaMoure County caused $500,000 in property damage and $250,000 in crop losses.
- A 2009 tornado that touched down only briefly just outside of Dickinson in Stark County injured two people and caused $20 million in property damage in a path that was less than 10 miles long.
What is Tornado Insurance Coverage?
Unlike floods or earthquakes, tornado damage is covered under your traditional homeowners insurance policy. Due to the capabilities and tendencies of tornadoes to cause massive damage, however, homeowners are strongly encouraged to review their existing policies every year or two to determine if they carry adequate coverage. You don't need to look for a separate tornado insurance policy, but you should carefully examine your current protection to ensure you can recover quickly if a twister touches down near you.
How Do I Know if My Coverage is Enough?
The amount of property damage coverage offered by your homeowners insurance policy should be enough to completely rebuild. As tornadoes are known to level entire city blocks, chances are you could lose everything in a twister.
If your home hasn't been evaluated by a professional assessor in the last few years, it may be a good investment to have your home appraised. Housing prices in North Dakota have experienced sharp increases in recent years as the oil and gas booms have attracted more residents to the state. Be sure your current property damage limits reflect any recent change in your home's value.
Are the Contents of My Home Protected?
The next thing you should review on your existing policy, or on any new policy you may consider purchasing, is your personal property or contents coverage. To determine how much coverage you need, go room to room in your home. Inventory all of your possessions from books and electronics to appliances and clothing. Assign a dollar value to each item. The total amount should give you an idea of how much contents coverage you should carry. Tornadoes can not only destroy your home, but also everything inside can also be a total loss during a severe twister.
How Do I Choose the Right Coverage Options?
Most homeowners insurance providers in North Dakota give you the option of whether to cover your contents with actual cash value or replacement cost compensation. The difference between the two can mean the difference between recovering quickly following a tornado or experiencing a slow and frustrating process.
- Actual cash value: This type of reimbursement takes depreciation into account. For example, if your 10-year-old stove is destroyed by a tornado, your insurance company would compensate you for the cost of purchasing a used 10-year-old stove.
- Replacement cost: This type of reimbursement ignores depreciation. Using the same example, your insurance company would compensate you for the cost it of purchasing a brand new stove with comparable features to replace your old one.
The other option you choose as you build a homeowners insurance policy is your deductible. You will want to review the deductible you chose initially when you purchased the policy to determine if it is still an acceptable amount.
Is Having Adequate Coverage Expensive?
As you adjust your homeowners insurance policy to reflect any changes to your property value or if you decide to change some coverage options, you may be quoted premium prices that are higher than you are currently paying. You may also find that a few tweaks and adjustments result in only a slight change to your quote.
Choosing replacement cost over actual cash value coverage may increase your premiums. If your home contains older appliances and electronics, however, you may decide the added coverage is worth a $50 to $200 increase to your annual premium.
And while choosing a higher deductible will result in lower quotes, you want to be certain that the deductible you choose is one you can comfortably afford to pay should you need to file a claim. You don't want to wait around for months following a tornado as you scrape together the deductible before your insurance company starts to compensate you for your losses.
Can I Find Savings on My Insurance?
Determining how much insurance coverage is sufficient to protect you from the devastating forces of a tornado can be confusing, but you don't have to go it alone. Knowledgeable, independent insurance agents on the Trusted Choice® network are always available to answer your questions, suggest coverage options and even assist you in filing a claim.
These agents have years of experience working with North Dakota insurance providers, enabling them to find you a number of quotes with a variety of coverage options at the most affordable rates. Contact a Trusted Choice member agent near you to find out how you can obtain a homeowners insurance policy that includes tornado protection while meeting your needs and fitting your budget.