Florida Has Most Lightning Claims but Texas Has Highest Cost Per Claim

July 6, 2015     (Insurance Journal)

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. Despite fewer storms, insurers still paid $739 million in lightning claims to nearly 100,000 policyholders in 2014, according to the Insurance Information Institute.

Florida led the way with the number of lighting claims in 2014, followed by Georgia, Texas and Louisiana. The Lone Star State had the highest average cost per lightning damage claim: $10,671.

Across the United States, total insured losses from lightning were up 9.7 percent from 2013, though overall incurred losses between 2010 and 2014 are still down 28.5 percent.

An analysis of homeowners insurance data by the INSURANCE INFORMATION INSTITUTE and State Farm found there were 99,871 insurer-paid lightning claims in 2014, down 13 percent from 2013. Yet the average lightning paid-claim amount was up 26 percent, from $5,869 in 2013 to $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.

“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 INSURANCE INFORMATION INSTITUTE “Since 2010, the number of paid lightning claims is down more than 53 percent. 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.”

That may be good news for homeowners, but “lightning is still an extremely costly weather-related event,” Lynch said.

Despite the drop in the number of paid claims in 2014, the average cost per claim rose nearly 53 percent from 2010 to 2014. By comparison, the consumer price index rose by 8.6 percent in the same period.

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.

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