Lightning insurance claims shows that costs are still increasing

Lightning insurance claims

Lightning insurance claims

Product shortages and price spikes in electronics are being blamed for this trend.

Though it has been the deadly and highly damaging tornadoes that have been attracting the insurance news attention regarding natural disasters in many states in 2012, the country has also been facing a massive amount of lightning storms that have also been wreaking havoc.

The Insurance Information Institute said strikes of lightning led to nearly $1 billion in insured losses last year.

A State Farm and I.I.I. analysis of homeowners insurance data have determined that in 2011 alone, there were over 186,000 claims resulting from lightning strikes, and, as high as that number may seem, this was a decrease of almost 13 percent from the year before. The average claim last year was, according to the I.I.I., $5,112. This value was an increase of 5.5 percent over the year before.

Data has also shown that from 2004 to 2011, the average cost per lightning insurance claim increased by 93 percent, even though there was a 33 percent drop in the number of paid claims within that same period of time. This could potentially be the result of an increase of use of protection systems against lightning damage, such as various types of surge protectors.

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According to the I.I.I. vice president, Loretta Worters, “The number of paid 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.” She went on to explain that new high def flat screen televisions, expensive home entertainment centers, and the fact that many households now have several computers, gaming systems, smartphones, and other pricy electronic devices that can all be harmed by surges in power caused by lightning, can all have had some impact on the cost of the losses.

The recent spike in the price being paid to replace these consumer electronics could also be an important factor behind the skyrocketing claims costs. Shortages of products last year and into this year’s first quarter from countries such as Japan and Thailand, which were facing struggles in their supply chains, could also have played a role in the insurance news focusing on the increased costs of the claims.

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