As people in central Oklahoma emerge from the wreckage of the tornado that flattened entire neighborhoods, some will face another bitter realization: Residents of Moore and neighboring areas may lack insurance coverage to compensate them for the loss of all of their worldly possessions.
About 98 percent of homeowners carry insurance, according to the Insurance Information Institute. Standard homeowner and business insurance policies cover wind damage from tornadoes and thunderstorms, but some individuals and companies choose to buy less insurance than they need to keep costs down. As a result, some Oklahoma homeowners and businesses will find that they lack enough insurance to fully rebuild, even though their policies may cover a portion of their losses.
Many residents affected by tornado damage in Oklahoma are renters, and are unlikely to have an insurance policy to cover any losses at all, Oklahoma Insurance Commissioner John Doak told NewsOK.
“It's not just mobile homes, there’s apartment complexes,” John Wiscaver, vice president of public affairs for Oklahoma Farm Bureau Insurance, told The Huffington Post in an interview Tuesday. “There are remarkably many renters in those large apartment complexes that did not carry renters coverage.”
According to a 2012 Insurance Information Institute poll conducted by ORC International, just 31 percent of U.S. renters carried renters insurance. Renters in Oklahoma face a high hurdle when aiming to protect their property against disaster. The state has the third-highest rental insurance premiums in the nation, according to 2010 data from the National Association of Insurance Commissioners. That's because Oklahoma sits in Middle America's Tornado Alley.
Homeowner insurance policies typically cover furniture, clothes and other personal items when homes are destroyed by a tornado. Most companies cover from 50 percent to 70 percent of the amount of insurance on the home, and will also cover the costs of living away from home -- including hotel bills and restaurant meals -- if a resident’s house has been rendered uninhabitable.
Businesses with business income insurance can make claims for sales they would have made absent the tornado. However, Loretta Worters, a vice president at Insurance Information Institute, said that many small businesses in the U.S. don’t carry insurance. Around 25 percent of businesses do not reopen after being hit my a major disaster, according to the Institute for Business and Home Safety.
Cars damaged by the tornado are covered under the optional comprehensive portion of a standard auto insurance policy. Three out of four drivers in the U.S. choose to buy comprehensive coverage, according to the Insurance Information Institute.
Insurance appraisers were already on the ground in Central Oklahoma to survey the damage from Sunday’s storm when new tornadoes ravaged the region on Monday, according to NewsOK. Doak issued an emergency order Monday to allow insurance appraisers from out of state to help handle claims quickly.
Insured losses due to thunderstorm damage, which includes tornadoes, across the U.S. have increased sevenfold since 1980, according to risk management firm Munich Re. In 2012 alone, severe thunderstorms and tornadoes cost $14.9 billion in insured losses and $27.7 billion in economic losses, the organization reported. It remains unclear which insurers are most exposed to the catastrophe. Travelers, Liberty Mutual and Zurich Insurance Group have the greatest share of the property insurance market in the state of Oklahoma, according to SNL Financial.
“It will take weeks to calculate the number of insured losses and claims resulting from yesterday’s natural disaster,” said Worters. “I can tell you that tornadoes this spring have been some of the costliest -- and deadliest -- in U.S. history.”
Also on HuffPost:
May 2013 Central U.S. Tornadoes (GRAPHIC IMAGES)
05/23/2013 12:46 PM EDT
Oklahoma Governor: Missing Have Been Accounted For
05/23/2013 12:43 PM EDT
Oklahoma Governor Posts Update
05/23/2013 6:26 AM EDT
Volunteer Shows Dedication To Helping Tornado Victims, Rescuers
05/23/2013 5:41 AM EDT
Storm Lights Up Skies Above Moore
05/23/2013 4:58 AM EDT
Rough Weather Forecast To Hit Tornado-Ravaged Region
05/23/2013 2:05 AM EDT
Okla. Mom Recalls Being In Labor During Tornado
While the Moore Medical Center crumbled around her on Monday afternoon, Shay-la Taylor was in labor with her second baby boy.
The mom-to-be knew about the severe weather watch as she checked into the hospital to be induced at 9 a.m. that morning, but says she wasn’t really nervous.
“We’re used to tornadoes and sirens,” the 25-year-old mom told HuffPost in a phone interview. “If you freaked out every time you heard a siren, you’d have an anxiety attack every May in Oklahoma.”
Click here to read the rest of her tale.
--Farah L. Miller
05/23/2013 12:47 AM EDT
Sheriff's Department Offers View Inside Plaza Towers Elementary
05/22/2013 11:37 PM EDT
California Cupcakery Holds Fundraising Event For Oklahoma
Sprinkles Cupcakes in Los Angeles plans to donate all of the proceeds from their (ever-popular) Red Velvet cupcake sold on May 22 to support Oklahomans affected by Monday's tornado.
"As a native Oklahoman with my parents and brother still living in Oklahoma City, I am especially heartbroken by this devastating tragedy," Charles Nelson, co-founder of Sprinkles, stated on Facebook.
For more, click here.
05/22/2013 11:07 PM EDT
PHOTO: Kevin Durant Tours Tornado-Ravaged Moore
Basketball player Kevin Durant viewed tornado-damaged homes in Moore, Okla., on Wednesday. The Oklahoma City Thunder star also donated $1 million to the American Red Cross for relief efforts. The Thunder later matched the $1 million donation. (Sue Ogrocki / AP)
05/22/2013 10:56 PM EDT
Mail Service Alternatives Offered In Storm-Damaged Areas
The post office branch in Moore, Okla., was one of the thousands of buildings damaged or destroyed by Monday's twister. To help residents impacted by the disaster, the US Postal Service is setting up mail service alternatives in the area, News9.com reported.
Some of the options being offered include held mail, portable post offices and delivery service through an alternative office nearby. Letter carriers will also attempt to deliver mail wherever possible.
Click here for more.