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When lightning strikes, insurance can cover shocking damage costs

According to Nationwide Insurance, 20 million cloud-to-ground lightning strikes occur every year in the United States. Each lightning strike carries 100,000 volts or more and can spark significant damage, even miles from the point of impact. Power surges caused by power fluctuations from a utility company or from overloaded electrical panels also can exact a shocking cost on your home or business.

According to the Insurance Information Institute, homeowners filed more than 185,000 lightning strike-related claims in 2009. The average claim totaled nearly $4,300, and lightning claims cost nearly $800 million. The 2008 numbers were actually higher: more than 246,000 claims and more than $1 billion in losses.

Home Insurance Protection from Lightning

Will my insurance cover my home or business from lightning strikes?

According to the Insurance Information Institute, standard homeowner’s insurance and business insurance policies should cover lightning-related damage — including fire damage stemming from a lightning strike. A comprehensive auto insurance policy also will provide protection from lightning damage. The Insurance Information Institute says that certain business insurance and home policies will provide coverage for power surges set off by a lightning strike.

State Farm Insurance cautions consumers about the limitations of lightning policies. For instance, you may not get fully repaid because of equipment deprecation or the cost of your deductible. And if utility work or some other non-lightning source causes the power surge, the damage may not be covered, or the coverage may be subject to significant limitations. Fortunately, cautious home or business owners can get special surge protection coverage for power surges not tied to lightning.

Why is lightning damage costly?

Both lightning strikes and power surges send energy into conductive materials, such as phone lines, cables, electrical wires and even ductwork and plumbing. Spikes and sags in power can destroy the motherboards of expensive computers, break down hard drives and even cause fires.
Surges also can lead to electrical “arcing” as the energy jumps around. Arcing can set off fires.

With electronic circuitry in modern American buildings becoming denser, more compact and increasingly interconnected, home and business owners are becoming more vulnerable to damage from lightning and power surges, according to State Farm.

Some places are more at risk than others. For instance, Florida sees more than 1.5 million lightning flashes a year and experiences more than 26 strikes per square mile, according to the National Lightning Detection Network. Missouri, by comparison, experiences only 950,000 flashes a year and 13.7 per square mile. The Empire State Building gets hit by lightning dozens of times each year.

How can I protect my home or business from lightning?

According to Nationwide, power surges and sags can be caused by things other than lightning, such as:

  • Turning on a big piece of equipment, like a photocopier.
  • Operating lots of equipment during peak demand time, such as the middle of summer.
  • Utility line work or construction work causing a power loss.

Nationwide recommends that homeowners and business owners adopt three main protective measures:

  1. Use point-of-device surge protectors to protect individual electronic devices, like TVs, computers and printers.
  2. Use a service panel suppressor to manage large power surges before they enter your building. Note that a panel suppressor alone may not be enough protection. For instance, a direct lightning strike on your building would bypass the suppressor and cause direct damage to electronic devices unprotected by point-of-device surge protectors.
  3. Get equipment breakdown insurance. This coverage can protect your property if power fluctuations cause damage to products or lead to things like spoiled food, lost income or emergency repairs.

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