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Last updated on April 18, 2014 at 17:08 EDT

Thunderstruck! Average Lightning Claim Costs Up By 25 Percent, But Number Of Claims Continues To Fall

June 25, 2013

Lightning Safety Awareness Week Is June 23-29

NEW YORK, June 25, 2013 /PRNewswire-USNewswire/ — While the destruction caused by tornadoes and hurricanes may grab the headlines, intense lightning storms also take their toll throughout the United States. In fact, lightning strikes cost nearly $1 billion in insured losses in 2012, according to the Insurance Information Institute (I.I.I.).

An analysis of homeowners insurance data by the I.I.I. and State Farm® found there were 151,000 insurer-paid lightning claims in 2012, down nearly 19 percent from 2011. The I.I.I. puts the average lightning paid-claim amount at $6,400 in 2012, up 25 percent from 2011. Taken together, these two factors resulted in $969 million in total paid lightning claims, up 1.7 percent from 2011.

The incidence of lightning claims in 2012 continues a downward trend. Since 2004, the number of paid lightning claims tumbled an average of roughly 7.5 percent per year, resulting in a 46 percent drop over the eight-year period through 2012. This decline may be attributed to an increased use of lightning protection systems. Despite this drop, the average cost per claim rose 142 percent from 2004-2012. (By comparison, the consumer price index rose by 21.5 percent in the same period.)

“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,” said Loretta Worters, vice president of the I.I.I.”

    HOMEOWNERS INSURANCE CLAIMS AND PAYOUT FOR LIGHTNING LOSSES, 2004-2012

                                              Number of paid claims                 Insured losses ($ millions)          Average cost per claim

    2004                                                                   278,000                               $735.5                         $2,646.0

    2005                                                                   265,700                                819.6                          3,084.0

    2006                                                                   256,000                                882.2                          3,446.0

    2007                                                                   177,100                                942.4                          5,321.0

    2008                                                                   246,200                              1,065.5                          4,329.0

    2009                                                                   185,789                                798.0                          4,296.0

    2010                                                                   213,278                              1,033.5                          4,846.0

    2011                                                                   186,307                                952.5                          5,112.0

    2012                                                                   151,000                                969.0                          6,400.0

    Percent change,                                                          -19.0%                                 1.7%                            25.2%
    2011-2012

    Percent change,                                                          -45.7%                                31.7%                           141.9%
    2004-2012

    Source: Insurance Information Institute, State Farm (R).

Worters noted that given last year’s record tornado activity and the fact that tornadoes are usually accompanied by severe thunderstorms, it was not surprising that the number of lightning claims remained close to $1 billion.

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 23-29), consider the following tips from the Lightning Protection Institute and (LPI) and Insurance Institute for Business & Home Safety (IBHS) to protect your home or business against lightning.

  • Have a lightning protection system installed for your home 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.

LIGHTNING SAFETY TIPS
“If you are outdoors in a thunderstorm, no place is safe,” says Kim Loehr, Director of Communications for the LPI. “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:

Outdoors

  • 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.

Indoors

  • The safest place to be in a storm is in a structure protected with an LPI certified lightning protection system.
  • Stand clear from windows, doors and electrical appliances. Unplug appliances well before–never never during–the storm.
  • Avoid contact with piping including sinks, baths and faucets.
  • Do not use the telephone, except for emergencies. Cellphones are safe to use.

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.

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SOURCE Insurance Information Institute


Source: PR Newswire