2010 Lightning Damage Cost Industry More Than $1B

Individual insurers have reported insured losses, ranging from $50 million to $1 billion, from recent storms and tornadoes. New numbers, from the Insurance Information Institute (I.I.I.), reveal the cost of recent lightning damage--more than $1 billion in insured losses in 2010.

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

The I.I.I. puts the average lightning claim at $4,846. By comparison, in 2009, there were about 185,000 lightning claims, which caused nearly $800 million in insured losses with the average claim totaling $4,296. The average cost per claim rose nearly 13% from 2009 to 2010, and more than 80% from 2004 to 2010, even as the actual number of claims fell by a little over 23% in the 6-year period.

“The number of claims is down, but 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,” says Loretta Worters, VP of I.I.I. “Plasma and high-definition television sets, home entertainment centers, 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.”

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 such claims increased substantially in 2010. 

 “The record losses are a result, in part, of the large number of storms occurring last year,” says Worters. “Catastrophe losses in 2010 totaled $13.6 billion.”

 

 

For reprint and licensing requests for this article, click here.
Core systems Claims Customer experience Policy adminstration Data security Security risk
MORE FROM DIGITAL INSURANCE