Category Archives: Thunderstorms

U.S. Tornado Losses Dominate 2012 Nat Cats So Far

Extreme weather event losses in the United States dominated natural catastrophe loss statistics in the first half of 2012, according to a review by Munich Re and the Insurance Information Institute (I.I.I.).

In  the 2012 half-year natural catastrophe review, Munich Re noted that some 85 percent of worldwide insured losses and 61 percent of overall losses were incurred in America, predominantly in the U.S. – compared with an annual average of 65 percent and 40 percent respectively since 1980.

Severe thunderstorm, tornado events in the U.S. accounted for the five costliest natural catastrophes for the insurance industry in the first six months of the year.

The most severe single event was a squall line that crossed several states between 2 and 4 March. Some 170 tornadoes were counted in and around the Ohio and Tennessee River alone, and a small number of communities were almost completely destroyed. Insured losses totaled $2.3 billion.

In a press release Peter HÃ ¶ppe, Head of Munich Re’s Geo Risks Research unit, noted:

Overall, most of the severe thunderstorm-related outbreaks with tornadoes affect a limited area, and may cause serious damage locally but are not comparable in scale to events like severe hurricanes. However, due to the number of events, the aggregate annual loss amounts can attain the level of a major hurricane landfall, as seen last year.†

The good news for insurers is that natural catastrophe losses in the first half of 2012 were relatively moderate. Overall global losses to the end of June were $26 billion, of which some $12 billion were insured.

In a recent post over at the Property/Casualty Insurance blog, Gary Kerney commented that for decades, hurricanes got the headlines and caused more insured losses than tornadoes and thunderstorms, but last year, all that changed.

More facts and statistics on tornadoes and thunderstorms from the I.I.I.

Lightning Claims Analysis

Every year lightning strikes the ground 30 million times and injures about a thousand people in the United States, according to the Lightning Protection Institute (LPI).

As next week is Lightning Safety Awareness Week, here’s a recap by the numbers of this underrated weather hazard and cause of property damage, courtesy of the Insurance Information Institute (I.I.I.).

Note to readers: numbers are based on an analysis of homeowners insurance data by the I.I.I. and State Farm:

186,000: The number of lightning claims paid out by homeowners insurers in 2011. Losses ranged from damage to expensive electronic equipment to structural fires that destroyed entire homes.

$5,112: The average cost of a lighting claim in 2011, up 5.5 percent from 2010.

93%: The increase in the average cost per claim from 2004-2011, even as the actual number of paid claims fell by over 33 percent over the seven-year period. This decline may be due to increased use of lightning protection systems.

Loretta Worters, vice president of the I.I.I., sums up the findings:

The number of paid claims is down, but the average cost per claim continues to rise, in part because of the huge increase in the number and value of consumer electronics in homes. Plasma and high-definition television sets, home entertainment centers, multiple computer households, smart phones, gaming systems and other expensive devices—which can all be destroyed by power surges—continue to have a significant impact on claims losses.†

With this in mind, it’s good to know that damage caused by lightning, such as fire, is covered by standard homeowners and business insurance policies. Some home and business insurance policies provide coverage for power surges that are a direct result of lightning striking a home or business, according to the I.I.I.

There is also coverage for lightning damage under the comprehensive portion of an auto insurance policy.

Check out more I.I.I. facts and statistics on lightning here.