Cost of Tornado Insurance in Texas
Tornado insurance costs between $1,600 and $2,700 in Texas. The cost of tornado insurance in Texas varies based on the location, size, and condition of your home or commercial property. Some of the factors that affect the price of your insurance include:
Location of your home or business property: If your home or business property is located in a high-risk area such as Johnson County, your tornado insurance premium cost might be relatively high. This is due to the higher likelihood that you will be making claims.
Type and condition of your home: Your insurance provider will also consider the type of your home. That is if you live in a mobile home, modular building, or regular concrete and other permanent structures. Additionally, the insurer will take into account any reinforcements you might have made to your home to mitigate tornado damage. The condition of your home as a new or old structure and the style of construction will also be taken into account as they indicate the type of damage that might occur.
The price of your tornado insurance may also be influenced by the amount of the selected deductible. Having a higher deductible will result in lower premium costs and vice versa.
Because tornado insurance is typically subsumed under homeowners, renters, or business insurance, prices typically differ based on the coverage and extent of coverage under these insurance policies.
How Much Should I Pay for Tornado Insurance in Texas?
Similar to how you would plan coverage for a fire that can destroy the home or a business, when you want to get tornado insurance, you should consider the actual value of your insured property. You need to determine the cost of rebuilding and replacing damaged or destroyed properties in your home or business in the event of a tornado incident. The amount you should pay for your tornado insurance in Texas is also determined by:
The location of your property: If your insured building or property is in a high-risk area, the cost of your tornado insurance will be higher than if the insured building or property is in a moderate or low-risk area. This is because the insurer considers the likelihood of a claim being made as one of the factors in deciding the price of your insurance.
The size and condition of your property: The cost of tornado insurance for a large home will be different and more expensive than that of a smaller, more moderate home. This is because the cost of repairs or replacement of the larger home will be more than that of the smaller home. Additionally, if your home is a new building with tornado-resistant features, you may not have to pay much for tornado insurance due to the reduced risk of damage to the property. On the other hand, if your property is old or built with inferior materials, your insurance premium may be higher than normal. However, if you have wind-resistant roofs and windows or other modifications that affect your property's susceptibility to windstorms, the cost of your insurance may be lower.
What Affects the Cost of Tornado Insurance
Factors that affect the cost of your tornado insurance include:
Coverage type - The type of coverage you purchase on your insurance determines the cost of your insurance coverage. Residential tornado coverage through Homeowners policies is almost always less expensive than commercial property coverage.
Risk probability - Insurance companies tend to consider the likelihood of claims and how well you have taken precautions to protect your property from damage. Homes with a higher risk probability will have higher premiums, while homes with perceived lesser risk will have lower premium rates. For example, securing your roof and windows is a good precaution to take against tornadoes.
Location of your property - The location of your home or business can affect how much your insurance will cost. If you live in a city like Keene or Joshua with high frequency of tornadoes yearly, the cost of your insurance will be higher than in cities like El Paso, with lower chances of tornado storms.
Building type and precautions taken- Insurers will also consider the type of structure you have and the measures you have taken to make the building resistant to tornado damage. For example, if you reside in an older building, you might have to pay more for your insurance because the building may be considered more prone to damage and destruction due to age.
Deductible - The amount of your Wind and Hail deductible is also another important factor that can determine the cost of your tornado insurance. Having a higher deductible will result in a lower premium price, while reducing your deductible could have the opposite effect. The average wind/hail deductible in Texas is $500.
Can you Lower the Cost of Tornado Insurance in Texas?
Yes. You can take measures that could lower the overall cost of your tornado insurance; some of which include:
Taking actions to reduce the risk of your home being damaged by a tornado. Reinforcing your doors and windows and installing a tornado-resistant roof could result in reduced premium costs from your insurance provider.
Combining the policy with other insurance policies. Some insurers give discounts and lower prices to customers with multiple policies as an incentive.
Maintaining a claim-free report and good credit rating. This can make you eligible for discounts and incentives, which helps you get lower prices for your tornado insurance.
Getting a higher deductible. A deductible is the amount you will have to pay out of pocket before your insurance company satisfies your claim. Having a higher deductible could result in a decreased premium. However, increasing your deductible consequently increases the amount you will have to pay out of pocket in the event of a claim.
Adjusting your policy coverage limit. Higher policy limits will result in higher prices, while lower policy limits will result in lower premium rates. You can discuss with a state-licensed agent to conduct an audit to determine whether you have more coverage than necessary. You can reduce the limits to save on your insurance if you do. Assess your property insurance coverage needs annually, to make sure that your insurance needs are balanced.
What is the Average Cost of Tornado Insurance in Texas?
While the average cost of tornado insurance in Texas is approximately $1,700 per year, it is typically dependent on the type of policy (homeowner, renters, or commercial) and the extent of coverage you settle for. You should contact a Texas-licensed insurance agent to better understand the cost of tornado insurance as it applies to your needs and compare different prices offered by different insurance agencies.
How Much Tornado Insurance Coverage Do I Need?
How much tornado insurance you need will depend on different factors, including the size of your property and what you intend to cover. It is important to get enough coverage to cover the cost of rebuilding your house or restoring your house to its initial state, suppose it was damaged by a tornado. Texas is one of the states in the Tornado Alley due to the high frequency of tornadoes within the state. As a result, you should purchase sufficient tornado insurance to protect your home or business properties, especially if they are located in high-risk areas.
Tornadoes could cause significant damage to your property and may even extend to the destruction of your entire building. To avoid a situation where you have to pay exorbitant amounts for the repair or rebuilding of your home, you should get maximum (Replacement Value) coverage if your residential or commercial building is located on a coastline or in an area that is directly exposed to tornado storms. However, you can get less coverage if you have taken steps to protect your building or live in an area that is considered less prone to storms, such as Amarillo, Rockwall, or Laredo. Irrespective of the amount of coverage you want, there are certain limits:
Dwelling coverage ranges from $25,000 with a limit of $1,773,000.
For general commercial liability, the minimum insurable limit is $25,000, while the maximum limit is $2,000,000
You should contact a state-licensed Texas insurance agent to access your needs and suggest how much coverage will be sufficient for you.
How Much is Tornado Insurance Premium?
The amount you pay as your tornado insurance premium is determined by a number of factors such as:
Type of property (residential or commercial),
Location of the property,
Coverage limits - based on the value of the property,
Policy's deductible, and
Method of payment. If you pay upfront, in a lump sum, for the whole policy term - you always get the lowest price. If you go with monthly payments, they can add extra costs due to the required extra processing manpower, or for premium finance interest rate (additional 7% to 12%) for commercial tornado insurance coverage.
Depending on the area of Texas that you live in, tornado insurance could cost an average of $1,700 to $2,400 annually for standard policies. Contact a licensed insurance agent for advice on the prices of your insurance premium and price comparisons across different insurance providers.
How to Save on Tornado Insurance in Texas?
You can save on your tornado insurance in various ways:
Choosing appropriate coverage limits - Choose coverage limits based on the realistic, current, and provable values of the insured property, without over-insuring. Your Texas-licensed insurance agent can access your needs and help you determine the amount of risk that your property is exposed to and the appropriate coverage you should get. As a result, you will know that you are not overpaying.
Mitigating risks to your home - You can save on your tornado insurance by mitigating the risks that could affect your home in the event of a tornado. Some preventive measures that you could adopt include reinforcing your windows and changing your roof to a tornado-resistant type. Insurance companies tend to give discounts or offer lower prices to homeowners that have taken enough precautions to ensure that the damage that a tornado can do to their house is greatly reduced.
Discounts and loyalty bonuses - You can take advantage of discounts your insurance company offers. Some typically available discounts include claims-free discounts, loyal customer discounts, or discounts for paying your entire premium upfront. If you have multiple insurance policies with the same insurer - check for a multi-policy discount.
Adjusting your deductible - You can also save on your tornado insurance cost by opting for a higher deductible. By having a higher deductible, you will be able to make lower premium payments. This might be advisable if you live in an area that is less prone to tornadoes. However, having a higher deductible could mean that you will have to pay more for repairs or replacement of your property if a tornado storm actually occurs.
The best way to save on tornado insurance in Texas is to contact a knowledgeable Texas-licensed property insurance agent with access to multiple insurers. An experienced insurance professional assesses your needs and provides you with multiple options of quotes from different insurers to compare their prices and their coverage plans.
