TVs, Video Game Consoles Driving Up Cost of Lightning Damage Claims

(Reuters) - The cost of insurance claims for lightning strikes nearly doubled between 2004 and 2011, even as the actual number of claims shrank dramatically, and an industry trade group says fancy new TVs and videogame consoles are to blame.

The Insurance Information Institute, in a study released on Thursday, found insured losses related to lightning strikes reached nearly $1 billion in 2011. That was actually down from a year earlier, and the number of total claims also fell.

The institute, which acts as a communications and research arm for the industry, said the increased use of lightning protection equipment in homes was responsible for the decline in claims. In fact, from 2004 to 2011, the number of paid claims fell 33 percent.

Yet even with the sharp decline in total claims, the average cost per claim rose 93 percent to $5,112 over that period.

One of the biggest culprits, the III said, was the increased home use of electronics like flat-screen TVs, computers and videogame consoles, all of which are susceptible to power surges related to lightning strikes.

According to the Consumer Electronics Association, from 2007 to 2011 shipments of consumer electronics (like TVs and consoles) rose 15 percent, supporting the notion that more homes have more surge-prone items than in the past.

Replacement costs are also on the rise, according to the III study, in part because last year's earthquake in Japan and floods in Thailand disrupted many companies' supply chains, leading to shortages and price increases.

The National Lightning Detection Network recorded nearly 23.4 million lightning flashes nationwide in 2011. (Reporting by Ben Berkowitz in Boston; editing by Matthew Lewis)

Comments

Resource Center

View All »

Is It Time To Step Up And Own An Agency?

Download this eBook for insight on how to determine if owning an agency is right...

Claims - The Good The Bad And The Ugly

Fraudulent claims cost the industry and the public thousands of dollars in losses. This article...

Leveraging BI for Improved Claims Performance and Results

If claims organizations do not avail themselves of the latest business intelligence (BI) tools, they...

Top 10 Legal Requirements for E-Signatures in Insurance

Want to make sure you’ve covered all your bases when adopting e-signatures? Learn how to...

Get $100 in leads with $0 down!

NetQuote's detailed, real-time leads have boosted sales for thousands of successful local agents across the...

The Growing Role of Excess & Surplus Lines in Today’s...

The excess and surplus market (E&S) provides coverage when standard insurance carriers cannot or will...

Increase Sales Conversion with this Complimentary White Paper

This whitepaper will share proven techniques - used by many of the industry's top producers...

D&O Policy Definitions: Don't Overlook These Critical Terms

Unlike other forms of insurance where standard policy language prevails, with D&O policies, even seemingly...

Environmental Risk: Lessons Learned from Willy Wonka and the Chocolate...

Whether it’s a chocolate factory or an industrial wastewater treatment facility, cleanup and impacts to...

More Data, Earlier: The Value of Incorporating Data and Analytics...

Incorporating more data earlier in claims lifecycles can help you reduce severity payments by 25%*...

Personal Lines Pro eNewsletter

Critical insights into the personal auto, homeowners, and other consumer insurance markets to help P&C professionals stay informed – FREE! Sign Up Now!

Advertisement. Closing in 15 seconds.