Lightning-Related Homeowner Claims Dropped in 2013

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Insured losses to homes from lightning strikes in the United States fell to their lowest level in a decade last year, as severe thunderstorm activity eased from near-record levels and dry weather prevailed throughout much of the western half of the country. Despite the respite, insurers still paid $673.5 million in lightning claims to more than 100,000 policyholders in 2013, according to the Insurance Information Institute (I.I.I.).

Although total insured losses from lightning were down by nearly one-third (30.5 percent) in 2013, the decline since 2004 is a much more modest 8.4 percent. In the prior three years (2010 – 2012), home insurers paid approximately $1 billion per year, on average, to policyholders.

An analysis of homeowners insurance data by the I.I.I. and State Farm found there were 114,740 insurer-paid lightning claims in 2013, down 24 percent from 2012. The average lightning paid-claim amount was also down in 2013, slipping by 8.3 percent to $5,869 from $6,400 in 2012.

The decline in lightning damage last year is consistent with data from the National Weather Service, which recorded 137 days in 2013 with lightning causing property damage, while 160 such days were recorded in 2012—a 14 percent decrease.

The incidence of lightning claims last year is also a continuation of a downward trend. Since 2004, the number of paid lightning claims is down nearly 60 percent over the nine-year period through 2013. 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 fewer lightning storms.

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

HOMEOWNERS INSURANCE CLAIMS AND PAYOUT FOR LIGHTNING LOSSES, 2004-2013

Year

Number of Paid Claims

Insured Losses

($ millions)

Average Cost per Claim

2004

278,000

$735.5

$2,646

2005

265,700

819.6

3,084

2006

256,000

882.2

3,446

2007

177,100

942.4

5,321

2008

246,200

1,065.5

4,329

2009

185,789

798.1

4,296

2010

213,278

1,033.5

4,846

2011

186,307

952.5

5,112

2012

151,000

969.0

6,400

2013

114,740

673.5

5,869

Percent change, 2004-2013

-58.7%

-8.4%

121.8%

Percent change, 2012-2013

-24.0%

-30.5%

-8.3%

Source: Insurance Information Institute, State Farm.

Despite the drop in the number of paid claims in 2013, the average cost per claim rose nearly 122 percent from 2004-2013. By comparison, the consumer price index rose by 23.3 percent in the same period.

The average cost per claim has generally continued to rise, in part because of the huge increase in the number and value of consumer electronics in homes, according to the I.I.I.

TOP 10 STATES WITH ESTIMATED NUMBER AND COST OF LIGHTNING CLAIMS, 2013

State	Number of Claims	Insured Losses ($ millions)	Average Cost per Claim
GA	11,184	$56.0	$5,007
TX	6,419	54.2	8,436
NC	5,711	34.1	5,965
LA	5,547	21.6	3,902
AL	5,199	34.8	6,702
PA	4,483	22.4	4,987
TN	4,317	23.2	5,381
SC	4,011	23.1	5,755
OH	3,942	17.1	4,344
IL	3,849	25.6	6,646
Top 10	54,662	312.1	5,709
Other	60,078	361.4	6,015
U.S.	114,740	673.5	5,869
Source: Insurance Information Institute, State Farm.

The I.I.I. noted that Georgia was the top state for lightning claims in 2013. The state had an estimated 11,184 claims paid to policyholders, totaling $56 million. Texas, however, had the highest average cost per claim at $8,436, but had about one-third fewer claims than Georgia.

Source: I.I.I., State Farm

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