Lightning – an expensive shock to the system?

Tornado outbreaks recently cut a swathe of destruction across multiple states in the US, with properties in the path of a touchdown often turned to matchwood. But the intense lightning storms associated with this seasonal weather phenomenon also left many homeowners and businesses out of pocket.

No figures are available yet for the damage done by lightning in the first half of 2011 in the US. But the signs are that it will be significant, if previous years are anything to go by, because of the record tornado activity in April and May this year.

According to the Insurance Information Institute (I.I.I.), lightning strikes cost more than $1 billion in 2010, a big increase over 2009.

An analysis of US homeowners insurance data by the I.I.I.found there were more than 213,000 lightning claims in 2010, a rise of 15% compared with 2009. The losses ranged from damage to expensive electronic equipment to structural fires that destroyed entire homes.

Surging claims

Interestingly, the actual number of claims was down in 2010, but the cost per claim went up. The I.I.I. attributes the claim inflation to the big increase in damage to electronic hardware owned by people that is vulnerable to power surges.

The institute puts the average lightning claim at $4,846. By comparison, in 2009, there were around 185,000 lightning claims – which  caused nearly $800 million in insured losses with the average claim totalling $4,296. So the average cost per claim rose nearly 13% from 2009 to 2010, and more than 80% from 2004 to 2010, despite the actual number of claims falling by around 23% in the six-year period.

“Plasma and high-definition television sets, home entertainment centres, multiple computer households, gaming systems and other expensive devices—which can all be destroyed by power surges—are having a significant impact on claims losses,” said Loretta Worters, vice president of the I.I.I.

Damage caused by lightning, such as fire, is covered by standard homeowners and business insurance policies. But not all home and business insurance policies provide coverage for power surges that are the direct result of a lightning strike.

Conduct and survive

The good news about lightning is that unlike hurricanes and tornadoes, risk mitigation for structures is available and affordable, says Kim Loehr of the Lightning Protection Institute (LPI), a nationwide not-for-profit organisation founded in 1955 to promote lightning protection education, awareness and safety.

“A lightning protection system is the best way to dissipate lightning's dangerous discharge to eliminate damage to a structure,” he says. “The system provides a low-resistance network to safety intercept lightning's dangerous electricity and direct it to ground without impact to the structure or its occupants,” Loehr explains.  “When lightning's harmful electricity is confined to a conductive path via the lightning protection system, damage to a structure is minimized or eliminated.”

The LPI is currently collaborating with the National Fire Protection Association to promote lightning protection education, awareness and safety and also has an inspection programme that helps companies ensure they have lightning protection systems that are compliant with national standards.

Loehr thinks more needs to be done to raise lightning awareness, in view of its destructive potential. “Lightning is definitely an underrated weather hazard,” he says. “Tornadoes and hurricanes receive much news coverage, but lightning happens all the time, which is why there is so much apathy about this overlooked threat.”