Number Of Lightning Related Homeowners Insurance Claims Dropped In 2014, But Severity Up; Fewer Thunderstorms, Awareness And Protection Efforts Contributing Factors

Number of Lightning Claims Dropped In 2014, But Severity Up

FOR IMMEDIATE RELEASE
New York Press Office: (212) 346-5500; media@iii.org

NEW YORK, June 22, 2015 — The number of insurance claims from lightning strikes in the United States continued its steady decline, as severe thunderstorm activity eased from near-record levels and dry weather prevailed throughout much of the western half of the country. Despite fewer storms, insurers still paid $739 million in lightning claims to nearly 100,000 policyholders in 2014, according to the Insurance Information Institute (I.I.I.).

 

Total insured losses from lightning were up 9.7 percent from 2013, though overall incurred losses between 2010 and 2014 are still down 28.5 percent. 

 

An analysis of homeowners insurance data by the I.I.I. and State Farm® found there were 99,871 insurer-paid lightning claims in 2014, down 13 percent from 2013. Yet the average lightning paid-claim amount was up 26 percent, from $5,869 in 2013 to $7,400 in 2014.

 

The drop in the number of claims is consistent with data from the National Weather Service, which recorded 127 days in 2014 in which lightning caused property damage, while 137 such days were recorded in 2013.

 

“The incidence of lightning claims last year is a continuation of a downward trend,” said James Lynch, FCAS MAAA, Director of Information Services and Chief Actuary at the I.I.I. “Since 2010, the number of paid lightning claims is down more than 53 percent. The sustained decline in the number of claims may be attributed to an increased use of lightning protection systems, technological advances, better lightning protection and awareness of lightning safety—as well as to fewer storms.”

 

“While this is good news for homeowners, lightning is still an extremely costly weather-related event,” warned Lynch.

HOMEOWNERS INSURANCE CLAIMS AND PAYOUT FOR LIGHTNING LOSSES, 2010-2014

 

Year Value of Claims ($ millions) Number of claims Average cost per claim
2010 $1,033.50 213,278 $4,846
2011 952.5 186,307 5,112
2012 969 151,000 6,400
2013 673.5 114,740 5,869
2014 739 99,871 7,400
% change, 2013-2014 9.70% -13.00% 26.10%
% change, 2010-2014 -28.50% -53.20% 52.70%

Source: Insurance Information Institute, State Farm®.

Despite the drop in the number of paid claims in 2014, the average cost per claim rose nearly 53 percent from 2010 to 2014. By comparison, the consumer price index rose by 8.6 percent in the same period.

 

The average cost per claim is volatile from year to year, Lynch noted, but it has generally continued to rise, in part because of the huge increase in the number and value of consumer electronics in homes. In addition, better protection systems may have eliminated some smaller claims, while larger claims remain that drive the average higher.

Florida was the top state for lightning claims in 2014, with 10,440, followed by Georgia, Texas and Louisiana.

TOP 10 STATES WITH ESTIMATED NUMBER AND COST OF LIGHTNING CLAIMS, 2014

 

State Number of claims Average cost per claim Value of claims ($millions)
FL 10,440 $7,075 $73.90
GA 9,805 6,341 62.2
TX 5,622 10,671 60.0
LA 5,007 5,009 25.1
NC 4,886 5,891 28.8
AL 4,853 8,079 39.2
IL 4,049 6,348 25.7
PA 3,960 5,491 21.7
TN 3,638 8,583 31.2
IN 3,262 6,832 22.3
Top 10 55,522 7,025 $390.1
Other 44,349 7,869 $349.0
USA 99,871 7,400 $739.0

Source: Insurance Information Institute, State Farm®.

Insurance Coverage

Damage caused by lightning, such as fire, is covered by standard homeowners and business insurance policies. Some home and business policies provide coverage for power surges that are the direct result of a lightning strike. The optional comprehensive portion of an auto insurance policy also provides coverage for lightning damage.

 

Reducing the Risk of Lightning Damage 

In recognition of Lightning Safety Awareness Week (June 21 to 27), consider the following tips from the Lightning Protection Institute (LPI) and the Insurance Institute for Business & Home Safety (IBHS) to protect your home or business against lightning:

 

  • Have a lightning protection system installed for your home and/or business.
  • Be sure the lightning protection system is designed and installed in accordance with accepted industry standards and meets National Fire Protection Association, Lightning Protection Institute and UL requirements.
  • Include protection for electrical, telephone, cable or satellite TV lines entering the structure.
  • Make sure all equipment is UL-listed and properly labeled.

 

Lightning protection systems are designed to protect a structure and provide a specified path to harness and safely ground the super-charged current of the lightning bolt. The system neither attracts nor repels a strike, but receives the strike and routes it harmlessly into the earth, thus discharging the dangerous electrical event. Investment in a lightning protection system will protect your property, belongings and equipment. To locate a LPI-certified lightning protection system installer in your area, click here.

 

Lightning Safety Tips

“Lightning-related fires are more common in summer months and in the late afternoon and evening,” said Kim Loehr, Director of Communications for the LPI. “Peak seasons for lightning-related fires vary by region, as do weather patterns in general,” she continued. “No matter what the season or the region, if you are outside and hear thunder, seek indoor shelter right away. Most lightning victims are just steps away from safe shelter.”

 

The Lightning Protection Institute also advises the following:

  • Seek lower elevation areas.
  • Never use a tree for shelter.
  • Immediately get out and away from pools, lakes and other bodies of water.
  • Stay away from all metallic objects (fences, power lines, poles, etc.)
  • Do not raise umbrellas or golf clubs above you.

 

RELATED LINKS

 

ADDITIONAL RESOURCES

The I.I.I.’s free mobile apps can help you create a disaster plan, learn about selecting the right insurance for your needs and budget, and create and maintain a home inventory. Learn more about our suite of apps here.

 

The I.I.I. has a full library of educational videos on its You Tube Channel.

 

THE I.I.I. IS A NONPROFIT, COMMUNICATIONS ORGANIZATION SUPPORTED BY THE INSURANCE INDUSTRY.

 

Insurance Information Institute, 110 William Street, New York, NY 10038; (212) 346-5500; www.iii.org

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