It’s Brutal Out There

I.I.I. puts the average claim for lightning
at $5,321.

Oklahoma Gov. Brad Henry on July 15 toured drought-damaged areas in Cimarron County in the Oklahoma Panhandle, an area that has been experiencing drought so severe climatologists and longtime Panhandle residents have compared it to the Dust Bowl days of the 1930s.

Meanwhile, the Texas Forest Service recently completed a study of drought conditions, comparing the state’s 2008 fire season to the severe fire seasons of 2000 and 2006. Much of the state is running at or above normal drought conditions. Drought readings so far are nearly as high as in 2006 and have surpassed the 2000 levels. The peak of summer fire activity is generally around the third week of August, the Forest Service says, so activity is expected to increase significantly in the central one third and southeastern portions of the state.

The northwest portions of Arkansas are experiencing a low fire conditions but in the rest of the state a moderate wildfire risk exists, a condition likely to worsen as the summber wears on.

As a rule, in this area of the country at this time of the year thunderstorms offer the best hope of relief from the brutal heat. But thunderstorms usually bring lightning strikes along with them.

Given this year’s tinderbox conditions, it’s crucial that property owners are adequately covered. The cost of homeowners claims for damage due to lightning strikes has increased dramatically – up 28 percent over the last four years, according to the Insurance Information Institute. An analysis of homeowners insurance data by the I.I.I. found there were more than 177,000 lightning claims in 2007, causing nearly $1 billion in insured losses. The I.I.I. puts the average claim for lightning at $5,321. By comparison, in 2006, there were about 256,000 lighting claims, which caused more than $880 million in insured losses with the average claim totaling $3,446. The average cost per claim doubled between 2004 and 2007.

It’s been estimated that from 50 percent to 70 percent of homeowners do not have enough insurance to rebuild their homes in the event it is completely destroyed.

Insurance companies say they can’t force people to pay for more coverage as consumers seek lower premiums. Regardless, given the data on wildfire and lightning losses, agents and brokers would be wise to remind customers that damage caused by lightning, such as fire, is covered by standard homeowners and business insurance policies, and be sure their customers are adequately covered. Some home and business insurance policies provide coverage for power surges that are the direct result of lightning. There is also coverage for lightning damage under the comprehensive portion of an auto insurance policy.

Now is the perfect time for policyholders to protect their belongings. Lightning might not strike twice, but remind your customers it only takes one strike or one fire to have a significant loss. And that’s brutal.

Topics Claims Homeowners