KANSAS CITY, Mo. - Insurance companies in Moore, Oklahoma are preparing for thousands of claims after Monday's tornado destroyed entire blocks of homes, schools and businesses.
Local insurance companies say this latest storm will drive up premiums in Oklahoma. In fact, the state has some of the highest premiums already because of the threat of severe weather, often 1 to 2 percent of the value of a house. That compares to much lower rates in Missouri and Kansas, which often require a flat deductible between $500 and $1,500 ,according to Rick Elliot of the Rick Elliot Insurance Group.
Elliot believes this latest round of storms could force some insurance companies to pull out of Oklahoma all together.
Ben Javaheri, owner of Heartland Insurance Company in Prairie Village, Kan., speculates if we had a similar-sized tornado in Missouri or Kansas, we could see our premiums rise as well.
“Realistically every business is in it to make a profit and if they're losing money one way of recouping it is by raising rates so it wouldn't surprise me at all," Javaheri explained. “"The good old days of a $1,000 deductible for everything are gone. You might have $1,000 for everything else but wind in hail which could be 2% or 5% on the value of your property. So the deductible could increase from $ 1,000 to $35,000."
However, Scott Holeman, the communications director for the National Association of Insurance Commissioners (NAIC), disputes that.
Holeman says if we did have a large scale disaster in Kansas or Missouri, we wouldn't see a huge increase in premium rates right away because insurance companies plan for the possibility of severe weather and disasters.
Holeman says Missouri insurance companies paid $2 billion out in claims since the Joplin, Mo., tornado two years ago, and homeowners in Missouri have not seen any significant changes in their premium rates since then.
Elliot, Javaheri and Holeman agree that the Moore tornado is a good reminder for homeowners to take a detailed inventory of everything in their homes. That way, if we do have damaging severe weather in the Kansas City metro, residents can be sure to have all of their valuables replaced.
NAIC developed a free, simple myHOME Scr.APP.bk IPhone/IPad app that does the dirty work for you. Simply follow the instructions to scan serial numbers, take pictures and put together a list of any ideas you would want replaced. The app then allows you to email the list to yourself and your insurance agent. NAIC says a nationwide study determined less than 50% of homeowners have made an inventory list.
Holeman says for those who aren’t as technically savvy, you can make a list on paper and give it to your insurance agency. Another good option is to use a video camera to take footage of your valuables. You can walk room-to-room and open up drawers inside your house to show any prized possessions, then make a copy of the video for your insurance agent. Holeman also suggests talking to your insurance agent once a year to make sure you’re properly insured for your belongings.
“Keep serial numbers, take photos, detail the cost and keep a record then email a full report to yourself and your insurance agent. That way you have an electronic record,” Holeman explained, “You don't want to store that on your computer at home if there's a fire or tornado."
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