Does Homeowners Insurance Cover Lightning Strikes?

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Homeowners insurance does cover damage from lightning strikes, although only for certain types. Our guide explains how and when your insurance company would cover or pay out for lightning strikes, and what homeowners can do to mitigate damages or issues when filing claims. Lightning strikes were responsible for $739 million in homeowners insurance losses incurred by nearly 100,000 policyholders last year, an increase of 9.7% from 2013, according to the Insurance Information Institute. Additionally, the average homeowners insurance claim related to lightning strikes was approximately $7,400 in 2014, a rise of 26.1% from the year prior, based on data by I.I.I. and State Farm. 

How Homeowners Insurance Covers Lightning Damage

A lightning strike can create a fire inside or outside your home, ruin sensitive appliances, electronics and wiring inside the walls, and even shock and injure occupants. The good news is that lightning strikes, as well as fire caused by lightning, are covered as perils in almost all homeowners insurance policies, with no exclusions. A standard homeowners insurance policy should also provide coverage for:

  • Personal property, which can include any electronics, appliances, furnishings, or other interior possessions damaged or destroyed by a lightning strike. Typical policies reimburse for “actual cash value” – what you would pay for similar item at today’s prices minus depreciation. Most insurers provide coverage for personal possessions at approximately 50 to 70 percent of the amount of insurance you have on the structure of your home. Your policy should provide an option for replacement cost coverage if you prefer it, which pays what it would cost to replace your personal possessions at their current value.
  • Additional living expenses, which covers the cost of living elsewhere while your damaged home is being repaired or rebuilt – this coverage usually equates to approximately 20% of the dwelling’s value.
  • Other structures, including a garage or shed – this coverage often equates to approximately 20% of the dwelling’s value.

How Insurers Treat Lightning Damage

Leigh Needelman, CEO and president of Florida Assurers, Inc., says lightning is typically defined for insurance purposes as “naturally generated electricity from the atmosphere” and is generally classified in three ways:

Direct strike: when a bolt of lightning enters and passes through your home or other property on its way from the atmosphere to the ground. This type of lightning typically causes the most damage, including but not limited to fire and charring. “This is generally the easiest claim to collect, since the damage is clearly evident,” says Needelman.

Near miss: occurs when lightning strikes in an area near the insured’s home but does not hit the structure directly. In this case, the damage is usually less. However, it can be more difficult for an insurance company determine the cause of damages of this nature. The average homeowners’ policy excludes artificially generated current, such as sparks from a power company’s electrical lines or transformers, which can create damage similar to a “near miss.

Ground surge: happens when lightning strikes and causes a spike in electricity throughout an area. This is the most common lightning-related claim. Having a ground surge from a nearby lightning strike can be more difficult to prove and consequently, fewer claims are paid out for this damage.

Amount of Coverage

Even if someone lives in an area prone to lightning strikes, home owners do not need to purchase any additional coverage due to lightning. If your home is adequately covered by your homeowners insurance policy, lightning is a peril that falls under the coverage and it does not have a specific claim limit.

“I would not necessarily recommend increasing your coverage for the sole purpose of safeguarding against lightning strikes,” says Hank Wilson owner of Wilson Insurance & Financial Planning (www.wilsoninsurance.net). “However, I suggest that you annually review your policy to make certain that the coverage is consistent with current replacement cost estimates.”

Extra Protection Can be Worth the Investment

Equipping your home with an electrical ground, grounded weathervane, lightning rod, and/or surge suppressors may not provide adequate protection from lightning. Consequently, many experts recommend having a complete lightning protection system installed on your home. Lightning protection systems work to intercept a lightning strike and offer a safe and efficient path that dissipates dangerous electricity to the ground, detouring it from traveling through the structure’s electrical or plumbing system.

A complete lightning protection system includes strike termination devices, aluminum or copper braided cable conductors, ground terminals/rods (installed at least 10 feet deep into the earth), interconnecting bonding that minimizes side flashing (lightning that jumps between two objects), and surge suppression devices installed at the electrical panel. This system should also include protection for electrical, telephone, cable and/or satellite TV lines entering the structure. Additionally, any tree within 10 feet of and/or taller than the home should also be protected by its own lightning protection system to prevent the risk of side flashing.

Installing advanced lightning protection should be done by an experienced electrician or contractor who is UL-listed and LPI-certified. Installation plus equipment costs typically equate to less than 1% of the home’s value.

Filing a Claim for Lightning Damage

If you need to file a claim for damages incurred by a lightning strike, here’s what you can expect:

  • After you file the claim, an adjuster will inspect the damage to your home.
  • If the cost to repair your home exceeds the deductible of your policy, you will need to make a decision whether to file a claim.
  • If you choose to file a claim, the adjuster will offer you a settlement for repairs.
  • You receive the settlement from your insurance company in two increments. The first half of the settlement to be used to begin making repairs. The second will be for the remaining cost of the repairs after they have been made. “If you are offered an on-the-spot settlement, you can accept the check right away,” Worters says. “Later on, if you find other damage, you can reopen the claim and file for an additional amount.”
  • When both your home’s structure and personal property are damaged, you generally receive two separate checks from your insurance company – one for each category of damage. You should also receive a separate check for additional living expenses you might  incur if your home in not uninhabitable until repairs are made.
  • Note that most policies require claims to be filed within 60 days from the date of disaster.

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