According to the Insurance Information Institute, lightning losses in the United States reach $5-6 billion annually. Of those losses, more than $1 billion are in the homeowner sector, representing roughly five percent of total residential claims.
Despite these statistics, lightning is often reportedly overlooked by underwriters as a specific peril even though substantial claims and great devastation result from it. While there is no industry policy regarding discounts for lightning protection, insurers may refuse to renew coverage after a lightning claim, unless the insured obtains a lightning protection system. A properly installed lightning protection system which meets U.S. Safety Standards (UL, NFPA and LPI) will provide a safe electrical path (ground) into the earth for the lightning’s destructive energy.
Aware of the problems lightning causes homeowners, American International Group Insurance (AIG) now offers a 2 percent credit off its base insurance rate for homeowners who purchase a UL Master Labeled lightning protection system, installed by a Lightning Protection Institute certified installer.
According to Krista Komo, AIG Risk Management Services, “Discounted systems must include the lightning rod system for the structure, surge arresters for the electrical entrance and surge suppressors for the residence’s electronic devices.”
According to N.J.-based, Property Claims Services, severe thunderstorms caused an estimated $4.9 billion in insured loss claims during the second quarter in 2003 – the second highest for
a second-quarter period in the last nine years.
Other statistics by the Insurance Services Office (ISO) cite lightning as the leading cause of homeowner losses, over a four year period from 1999-2002 – greater than losses due to wind and hail, water damage and freezing, or theft.
“To assess when and where lightning protection is needed, underwriters can familiarize themselves with three essentials: the basic principles of lightning, risk assessment for structures and fundamentals of protection systems,” said Bud VanSickle, executive director of the Lightning Protection Institute (LPI). “It’s also important that customers contract with qualified and experienced, LPI-Certified specialists trained in accordance with national safety standards of Underwriters Laboratories, the National Fire Protection Association and LPI,” explained Vansickle.
“Years ago, insurance companies offered discounts for lightning protection systems,” said Guy Maxwell, president of the Lightning Safety Alliance (LSA), a non-profit, national league of lightning protection professionals and consumers dedicated to the promotion of lightning protection and safety. “The trend to reinstate these discounts provides an important safety measure for the public.”
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