Protect Your Home and Finances Against Twisters

Tornado season is upon us. Make sure you are prepared.

If you live in a tornado-prone area, you know twister season is upon you. You probably know what to do to protect yourself if a tornado has been spotted in your area. But do you know how to protect your finances against disaster? Follow these tips:

Check your insurance coverage. If a tornado damages or destroys a home, standard homeowners policies usually cover the costs of living away from home while the house is being repaired or rebuilt, according to the Insurance Information Institute (III). Make sure your policy provides this coverage.

Standard homeowners policies cover wind damage caused by tornadoes, according to III, but make sure your coverage limits reflect the cost of rebuilding your home. Check the local cost of building a home like yours. The insurance company is concerned with replacement value, not the market value of your home. If your home is insured for less than what it would cost to rebuild, you'll foot the bill for the difference.

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Contractors in your area should be able to provide you with some ballpark cost-per-square-foot estimates. But this generic calculation won't be of much use if have custom features such as marble mantels, hand-carved banisters and stained-glass windows that are more expensive to replace. For a more precise number, bring in an appraiser or check, which can calculate how much it would cost to rebuild your house.

For more information, see Get the Right Protection for Your Home and Six Steps to Protect Your Home.

Build an emergency fund. Set aside several thousand dollars in a money-market or savings account to cover potential out-of-pocket costs. Many common storm-related expenses -- such as removing fallen trees, which can cost thousands of dollars -- generally aren't covered unless the tree lands on your house. For more information, see Your Essential Emergency Kit.

Take inventory. You need to know what you have in your home -- and the replacement value of those items -- so you can file an insurance claim. Take photos of possessions or videotape your home room by room. Store the proof on a CD or flash drive and put it in a safe place. To find out how insurers handle storm-damage claims, see Protection After the Storm.

Cameron Huddleston
Former Online Editor,

Award-winning journalist, speaker, family finance expert, and author of Mom and Dad, We Need to Talk.

Cameron Huddleston wrote the daily "Kip Tips" column for She joined Kiplinger in 2001 after graduating from American University with an MA in economic journalism.