Apr 24, 2008

Tornadoes Cause Serious Damages to Autos

With wind speeds sometimes in excess of 300 mph, tornadoes are presenting insurers with another natural-catastrophe fear factor and car owners with just one more thing to worry about. Losses from “tornado events” are beginning to rival those of a major hurricane, reaching or eclipsing $1 billion more frequently, according to new A.M. Best Co. research “U.S. Tornado -- Catastrophe Review,” highlighted in BestWeek U.S./Canada.

The special report notes the Super Tuesday tornado outbreak in the Mid-South on February 5 and 6 was the deadliest string of U.S. twisters in almost 13 years, and the March 14 storm in Georgia is believed to be the first tornado to touch down in downtown Atlanta. Damage estimates are approaching $250 million there and are likely to go higher.

Damage caused by wind is covered under most homeowners’ policies, while damage to vehicles caused by wind, hail, tornadoes and flooding is insured with comprehensive auto coverage. Even in 2006 and 2007 when the insurance industry’s total catastrophe losses were manageable, losses from tornadoes dragged down financial results in the property/casualty arena, the study found, and that could mean higher insurance rates in your future. In other words, tornadoes blow.