Filed Under:Risk Management, Loss Control

Insurers paying more for fewer lightning strikes, report says

Here are 3 tips for Lightning Safety Awareness Week

Although the number of lightning strikes is down, the dollar value of claims has increased. Is your property protected adequately? (Photo: iStock)
Although the number of lightning strikes is down, the dollar value of claims has increased. Is your property protected adequately? (Photo: iStock)

Along with the first day of summer, many places experience increased thunderstorms, often accompanied by lightning. Although most images we get from movies show lightning striking trees or isolated areas, lightning does strike buildings as well, causing extensive damage.

The good news is that the number of Homeowners’ insurance claims from lightning strikes in the United States fell in 2015. The bad news? A new analysis by the New York City-based Insurance Information Institute found that the total insurers paid on those claims — $790 million to nearly 100,000 policyholders — rose by nearly 7%.

The New York City-based institute and Bloomington, Ill.-based State Farm analyzed homeowners insurance data for claims from lightning strikes and found:

  • Total insured losses from lightning rose 6.9% from 2014 to 2015, although losses have declined 23.6% overall since 2010.
  • There were 99,423 insurer-paid lightning claims in 2015, down 0.4% from 2014.
  • The average lightning claim paid 7.4% more than a year ago: $7,947 in 2015 vs. $7,400 a year earlier.
  • The average cost per claim rose 64% from 2010 to 2015. By comparison, the Consumer Price Index rose by 9% in the same period.

Related: Weathering the storm of lightning claims

Southern United States

(Photo: iStock)

Florida, Georgia, Texas and Louisiana lead in lightning claims

“The average cost per claim is volatile from year to year,” said James Lynch, FCAS MAAA, vice president of information services and chief actuary for the Insurance Information Institute, “but it has generally continued to rise, in part because of the enormous increase in the number and value of consumer electronics, including increasingly popular home automation systems.”

The analysis also found that the drop in the number of claims is consistent with data from the National Weather Service, which recorded 334 events with property damage in 2015, down from 401 such events a year earlier. There were 135 days in 2015 in which lightning caused property damage, while 128 such days were recorded in 2014.

As you might expect, Florida — the state with the most thunderstorms — remained the top state for lightning claims in 2015, with 11,898, followed by Georgia, Texas and Louisiana, respectively.

Generally, damage caused by lightning, such as fire, is covered by standard homeowners insurance policies, the institute explains. Coverage for power surges that are the direct result of a lightning strike may also be included in some policies. 

“Not only does lightning result in deadly home fires,” said Lynch, “it can cause severe damage to appliances, electronics, computers and equipment, phone systems, electrical fixtures and the electrical foundation of a home.”

Related: 5 ways to protect your home during a storm

In recognition of Lightning Safety Awareness Week (June 19–25), the Insurance Information Institute offers the following tips to protect homes and businesses against power surges and lightning strikes: 

Lightning rod

The first step is to install a lightning protection system. (Photo: iStock)

1. Install a lightning protection system

lightning protection system supplies structural protection by providing a specified path on which lightning can travel.

When a building is equipped with a lightning protection system, the destructive power of the lightning strike is directed safely into the ground, leaving the structure and its contents undamaged.

A lightning protection system includes a “rooftop network” of lightning rods or air terminals at the top of the house connected by a series of down conductors to carry the current down to a grounding network (grounding rods or ground plates, depending upon soil conditions). Lightning protection is not a “do-it-yourself” project, so make sure you contract with am Underwriters Laboratories-listed lightning protection specialist to install the system in accordance with national safety standards.

Homeowners may be at an increased risk if they have a corrugated stainless steel tubing product in their home and should bring this to the attention of the lightning specialist. 

Switchboard protector

Ideally, you should have a surge protection device on your electrical panel. (Photo: iStock)

2. Use surge protectors

The sensitive electronic equipment currently in use is particularly vulnerable to lightning.

To assure the highest level of protection, an Underwriters Laboratories-listed surge protection device should be installed on electrical service panels. Most electric utilities will rent or sell a surge device for the electric meter to “clamp down” on incoming surges. A licensed electrician can also be engaged to put similar equipment on the electrical panel. Installations typically include surge protectors for the main electric panel, as well as incoming phone, cable, satellite and data lines.

Surge protectors guard against damaging electrical surges that can enter a structure via power transmission lines. By filtering and dissipating the harmful surges, the devices prevent electrical fires and protect against electrical discharges that can damage a building’s electrical system, computers, appliances and other systems.

UL-listed transient voltage surge suppressors can also be installed to protect high-valued, sensitive electronic equipment such as computers, TVs, corded telephones, microwave ovens, washing machines, refrigerators, garage door operators, and irrigation system controllers, for example. Keep in mind that power strips offer little protection from electrical power surges.

Surge protector

Don't rely just on surge protectors. Actually pull the plugs. (Photo: iStock)

3. Unplug expensive electronic equipment

As an added precaution, unplug expensive electronic equipment such as TVs, computers and the like if you know a storm is approaching.

Related: Are those shiny new toys covered?

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