Navigating an Insurance Claim After Damage from a Tornado

Published on 12/27/2021 by Bar List Publishing

When a family is taking shelter from an impending tornado, figuring out how to handle adjusters and insurance carriers after the damage is done is likely at the bottom of their priority list. However, after surviving such an ordeal and looking upon the damage caused to their home or property, it may seem like they exited one nightmare scenario and entered another.

This is the reality for thousands of people across western Kentucky who experienced varying levels of loss earlier in December as a result of the tornado.

Unfortunately, these weather events are becoming more erratic and happening with higher frequency as a result of climate change. Additionally, the increased incidents have been causing insurance carriers to make more payouts to their clients. Specifically, the tornado in western Kentucky that happened on December 10th, 2021 has reached almost $5 billion in payouts due to claims.

Tornado Insurance Claims

Most insurance policies provide coverage for wind damage as a standard practice. However, there are some companies that have created special deductibles specifically for tornadoes. These deductibles must be paid before an insurance company begins providing coverage for the remainder of the payout. The deductibles can vary from company to company; for example, some companies may charge a deductible equal to the percentage of the coverage amount, whereas others may charge a flat rate typically between $500-$1000.

For people living in states most affected by tornadoes, reading the fine print on how their insurance covers their property may be confusing if special deductibles exist. Getting a clear explanation from the insurance carrier is important in order to avoid unforeseen expenses.

Homeowners should carefully monitor their insurance policies for changes over the coming years. Climate change is visibly creating unpredictable catastrophes across the US. As insurance companies assess their net-leverage, policy-holders may see increased premiums, and additional or new special deductibles. Insurance companies will focus on their bottom line, and this requires mitigating risk against the ongoing challenges presented by climate change. 

Insurance Adjusters

Given the nature of widespread catastrophe, and its impact on almost all infrastructure in an area, it can be challenging to handle insurance claims in a timely and effective manner. In other situations, such as a car crash, an insurance adjuster could easily travel to your home or mechanic, inspect your vehicle, and hand in their report. However, with thousands of people, homes, and businesses affected, as well as numerous roads closed, internet/phone outages, the process of streamlining insurance claims has to overcome many hurdles.

In Kentucky, some insurance agents are attempting to file claims themselves instead of waiting for an adjuster to be assigned. For example, the manager of Kentucky Farm Bureau, Mike Cartwright, has been filing claims using his cellphone while driving around Mayfield. This initiative is helping claimants get a headstart on having their claims reviewed.

According to KFVS12, local, state, and federal assistance has become available to assist tornado victims with a variety of necessities. This includes beginning the process of filing a claim. The assistance is also being used to provide food and temporary housing.

Temporary Housing

Temporary housing is another infrastructure aspect that is affected by widespread catastrophe. In isolated instances where a family experiences a house fire and must find another home while they rebuild, there is generally availability through hotels and apartments. However, in this circumstance, over a thousand homes have been destroyed, according to the Courier Journal.

This creates an influx of displaced people who will be seeking shelter in nearby hotels or apartments. However, due to the heightened demand and effects on local infrastructure, it may be challenging for many families to find temporary housing nearby. Some families may choose to leave the area permanently in order to avoid future natural disasters. The concept of “climate refugees” is taking hold across the US as people leave their homes for good to avoid climate induced catastrophes such as wildfires in California, flooding in Florida, and tornadoes in numerous plains states.

Insurance generally has provisions to provide coverage for families to acquire temporary housing while their home is being rebuilt. These provisions cover not only rent, but should also cover things such as storage for items, food, moving costs, laundry fees, and costs of new utilities.

Demand Surge

Although there are numerous government assistance programs, as well as insurance companies taking initiative to file claims, there will still be an increased stress on various necessary supplies.

As previously mentioned, hotels and short-term housing will be in short supply as a result of how many people were displaced. However, building supplies will also be in short supply as thousands of homes and businesses try rebuilding at the same time.

This demand surge may hike up the prices for these necessary supplies, and may cause issues for insurance holders as they receive their payouts. For example, if a business or home is valued at $100,000, it may end up costing the owner more money than they receive in their payout to cover the cost of rebuilding. This is due to the fact that thousands of other property owners will be trying to rebuild at the same time. As a result, some policyholders may find themselves still trying to scrape together additional money to rebuild even if their claim is fully paid out.

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