Canadian Underwriter

Number of lightning-related homeowners insurance claims in the U.S. up in 2016, but average cost for insurers down: I.I.I.

June 16, 2017   by Canadian Underwriter

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The number of homeowners insurance claims from lightning strikes and electrical surges in the United States rose in 2016, compared with 2015, but the average cost that insurers paid on those claims fell, according to a new analysis by the Insurance Information Institute (I.I.I.).

The New York City-based I.I.I., a non-profit, communications organization supported by the U.S. insurance industry, conducted a study in partnership with State Farm, I.I.I. said in a press release on Thursday.

The study found that:

  • More than US$825 million in lightning claims was paid out last year to more than 109,000 policyholders;
  • The average cost per claim last year was US$7,572, down from US$7,947 in 2015;
  • Total insured losses caused by lightning rose 4.5% from 2015 to 2016, although overall losses have declined 12.4% since 2007;
  • There were 109,049 lightning claims in 2016, up 9.7% from 2015; and
  • Over 50% of claims were related to electrical surge damaging components or wiring, while power surges from transformer or service line shorts were also contributing factors.

“The average cost per claim dropped 4.7 per cent from 2015 to 2016,” noted James Lynch, chief actuary at the I.I.I, in the release. “However, the overall average cost per claim has risen 42.3 per cent since 2007.” By comparison, Lynch said, the Consumer Price Index, which the U.S. Bureau of Labor Statistics says “produces monthly data on changes in the prices paid by urban consumers for a representative basket of goods and services,” rose only 15.8% in the same period.

Looking at lightning claims by states, Florida – the state with the most thunderstorms – remained the top state for lightning claims in 2016, with 10,385, followed by Texas (9,098), Georgia (8,037) and Louisiana (5,956).

(PRNewsfoto/Insurance Information Institute)

The I.I.I. explained in the release that damage caused by lightning, such as a fire, is covered by standard homeowners insurance policies. Some policies provide coverage for power surges that are the direct result of a lightning strike, which can cause severe damage to appliances, electronics, computers and equipment, phone systems, electrical fixtures and the electrical foundation of a home.

In recognition of Lightning Safety Awareness Week, which runs from June 18 to 24, the I.I.I. and the Lightning Protection Institute (LPI) encourage homeowners to install a lightning protection system in their homes.

“Lightning protection systems that follow the guidelines of [the National Fire Protection Association] are designed to protect your home by providing a specified path to harness and safely ground the supercharged current of the lightning bolt,” said Kim Loehr, communications director for LPI, a national organization that promotes lightning protection education, awareness and safety.

In 2016, there were 38 lightning deaths in the U.S., compared with 26 in 2015 and 2014.

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1 Comment » for Number of lightning-related homeowners insurance claims in the U.S. up in 2016, but average cost for insurers down: I.I.I.
  1. Edward Dauenhauer says:

    My computer and related items are protected by surge protectors, but they do have exceptions. A few weeks ago my house was hit by lightin. It hit the back left side of the house, traveled along the wall, destroying as it went. It hit my hot water line under the kitchen sink, breaking it lose. flooding the house with 1 to 2″ of water(we were not at home). Any appliance that had a printed circuit, you can forget about. Dish washer, washing machine, garage door opener, can opener(if electric) television, my security camera system, phone landline, the list goes on. Unforgettably we are still coming across items that we don’t use that often. It is/was a nightmare that you wouldn’t wish on anybody. The list goes on. We were lucky, as the house didn’t catch on fire and our 2 dogs were alright. Let me say that nothing is safe from a lightin hit.

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