Lightning Strikes, Insurance Responds

Next time you’re home when a heavy thunderstorm rolls in, take a moment to think about how damaging lightning losses can be and how insurance helps.

In fact, insurers paid out $790 million in lightning claims last year to nearly 100,000 policyholders, according to a new analysis by the Insurance Information Institute (I.I.I.) and State Farm.

Damage caused by lightning, such as fire, is covered by standard homeowners policies and some policies provide coverage for power surges that are the direct result of a lightning strike.

As James Lynch, vice president of information services and chief actuary of the I.I.I. says:

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

It’s due partly to the enormous increase in the number and value of consumer electronics that the average cost per claim has continued to rise, Lynch explains.

There were 99,423 insurer-paid lightning claims in 2015, down 0.4 percent from 2014, but the average lightning claim paid was 7.4 percent more than a year ago: $7,497 in 2015 vs. $7,400 a year earlier.

The average cost per claim rose 64 percent from 2010 to 2015. By comparison, the Consumer Price Index (an inflationary indicator that measures the change in the cost of a fixed basket of products and services, including housing, electricity, food, and transportation) rose by 9 percent in the same period.

In recognition of Lightning Safety Awareness Week (June 19-25), the I.I.I. and the Lightning Protection Institute (LPI) encourage homeowners to install a lightning protection system in their homes. These systems are designed to protect the structure of your home and provide a specified path to harness and safely ground the super-charged current of the lightning bolt.

The growing market for smart home technology makes installing a lightning protection system even more important, noted the I.I.I. It is also an opportunity for designers, builders and code officials to include lightning protection systems in their plans.

Kimberly Loehr, director of communications for the LPI adds:

“Just as smart homes provide the ultimate in safety and comfort, lightning protection systems ensure that state-of-the-art home automation systems aren’t damaged by direct or nearby lightning strikes.”

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