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April 6, 2015 12:18 am
When a tornado strikes, the economic and insurance repercussions can be costly. From 1994 to 2013, tornadoes accounted for 37.2 percent of insured catastrophe losses (Property Claim Services) – $10.3 billion in losses were reported in 2013 alone (Munich Re).
According to the Insurance Information Institute (I.I.I.), standard homeowners and business insurance policies cover wind damage, including that caused by tornadoes, to the structure of the building and its contents. Homeowner policies also provide for additional living expenses (ALE). ALE coverage pays the costs of living away from home if you cannot inhabit your house due to damage from an insured disaster.
If you own a business that has been damaged, business income (also known as business interruption) insurance covers the profits a business would have earned had the disaster not occurred. This includes additional operating expenses—such as operating out of a temporary location—incurred as a result of the disaster.
Damage to cars from a tornado is covered under the optional comprehensive portion of a standard auto insurance policy.
Published with permission from RISMedia.
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