Tornados – Is Your North Carolina Home Insured?

Over the past 18 Months, North Carolina residents have seen the devastation caused by Tornados.  These disasters arrive & leave in minutes, yet for those left behind in the storm’s path…the devastation lingers on.

As an Insurance Professional, I take for granted the basic knowledge I have gained over my years in this business.  It wasn’t until recently that I came to understand that MOST people have no idea about what role their insurance plays in the aftermath of Tornado.  This point was made clear in a phone call I received from my Dad (I guess some things never change).  After checking on the kids, like he normally does, my Dad asked if the damages from the recent tornados in Tennessee would be covered by insurance?

If my own Dad doesn’t know the answer to that question, then I would assume the majority of average people would have no idea either.  In order to right this wrong, I have decided to share some “TIPS” with regard to making sure you are covered against damage(s) caused by a tornado!


The Standard Homeowner’s Insurance “Form” (another word the policy and endorsements that make up the homeowner’s policy in North Carolina) is pretty consistent among all Insurance Carriers in North Carolina.  That means (generally speaking) that a Homeowners Insurance Policy provided by one carrier should be very similar to one provided by another carrier.  The most commonly found Homeowners Insurance “Form” in North Carolina is referred to as the “HO-3”.

This “Form” provides protection(s) for the following:

Coverage A – Dwelling (Your House)

Coverage B – Other Structures

Coverage C – Personal Property (this is “your stuff”)

Coverage D – Loss Of Use (the expenses you incur while your home is being repaired after a loss)

Some companies are providing a newer Homeowners Form in North Carolina called the “HE-7”.  I explain the HE-7 to people as simply an HO-3 on steroids.  The HE-7 simply takes the coverages provided by the HO-3 and adds in a bunch of extras.  The biggest thing to be aware of is the “Loss Settlement”.  In insurance lingo, your policy either pays in terms of “Replacement Cost” or “Actual Cash Value”.  The difference?  Replacement Cost does just what it says, it replaces your items (house, clothes, tv’s, etc) with today’s equivalent.  Actual Cash Value takes your items and applies depreciation.  You want to make sure your policy has REPLACEMENT COST coverage.



In the insurance world, we use the term “PERILS” to describe the types of losses your policy protects you from.

Here is the good news….as long as your Homeowners Policy is on an HO-3 or HE-7 Form, you are covered against ALL PERILS unless the policy SPECIFICALLY excludes a certain peril.  There are other “HO Forms” that do not provide “ALL PERILS COVERAGE”, but the vast majority of Homeowners Policies in North Carolina fall into either the HO-3 or HE-7 buckets.

Example of a PERIL that is not covered in NC…Earthquake!  You are able to purchase this coverage back on to your policy!

The question should then be what?  Does my policy cover damage caused by a Tornado?

The answer is YES (most of the time, I will explain later)!  Damage caused by WIND is COVERED by both the HO-3 & HE-7 in North Carolina.


As I stated earlier, North Carolina Homeowners Policies DO cover damage caused by Tornados (on the HO-3 & HE-7 Forms).  There is an exception!  As a general rule of thumb, most insurance carriers EXCLUDE losses caused by WIND & HAIL the closer you get to the Coastal Counties.  As a general rule of thumb, I encourage anyone EAST of I-95 to examine their Homeowners Policy for this Exclusion (it is labeled as HO 32 94).


Hopefully, you are now armed with a little more knowledge of what your Homeowners Policy covers with regards to Tornados.  However, if your want a little more peace of mind…here is the conversation your should have with your Insurance Agent!

QUESTION 1?  Do I have an HO-3 or HE-7 Policy?

QUESTION 2 (if the answer is HO-3)? Do I have Replacement Cost on my dwelling AND Personal Property?

QUESTION 3? Does my Policy EXCLUDE damages from WIND?

Side note…if you want to make your Insurance Agent look bad, ask if your policy includes the HO 32 94 Endorsement (this is the endorsement that EXCLUDE Wind & Hail).


When I talk to potential customers, more times than not they have NO IDEA about any of the coverages they have.  Whether it is their Homeowners, auto, life, or business insurance, I find that they simply pay their premium(s) and ASSUME they are “covered”.  If you are unsure what you are actually paying for….ASK!  I can guarantee you that if you purchase a new computer and I have no idea how to make it work that you would be on the phone in an instant with “tech support”.  If you “mess” up your computer, what have you lost?  If you were to lose your home, auto, or life…what type of loss would you and your family have?  I think you have more at stake with the latter!