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Homeowners’ claims from lightning strikes in the U.S. dropped in 2014, but severity up: Insurance Information Institute


June 22, 2015   by Canadian Underwriter


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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.

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% from 2013

Despite fewer storms, insurers still paid US$739 million in lightning claims to nearly 100,000 policyholders in 2014, the Insurance Information Institute (I.I.I.) said in a press release on Monday. Total insured losses from lightning were up 9.7% from 2013, though overall incurred losses between 2010 and 2014 are still down 28.5%.

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% from 2013. Yet the average lightning paid-claim amount was up 26%, from US$5,869 in 2013 to US$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. [click image below to enlarge]

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

“The incidence of lightning claims last year is a continuation of a downward trend,” said James Lynch, director of information services and chief actuary at the I.I.I., in the release. “Since 2010, the number of paid lightning claims is down more than 53%. 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.

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.

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 release said, adding that the optional comprehensive portion of an auto insurance policy also provides coverage for lightning damage.