The Skyrocketing Cost of Lightning-Caused Insurance Claims in 2020: A Deep Dive into the Impact of U.S. Wildfires

The Dramatic Rise in Lightning-Caused Homeowners Insurance Claims

For the fourth consecutive year, the number of lightning-caused U.S. homeowners insurance claims decreased in 2020, even as the average value of those claims has more than doubled since 2017, according to Triple-I’s analysis of national insurance claims data. Lightning-related homeowners insurance claim costs nationally rose dramatically due to a series of lightning strikes across Northern California in 2020. The average cost per lightning claim in California was $217,555 in 2020, while the national average for this type of claim was nearly $29,000.

The Financial Impact of Lightning-Caused Claims

Triple-I also found that more than $2 billion in lightning-caused U.S. homeowners insurance claims were paid out in 2020 to 71,000-plus policyholders. The average cost of a lightning-caused U.S. homeowners insurance claim increased 141 percent between 2019 and 2020 (from $11,971 to $28,885) and 168 percent from 2017 to 2020 (from $10,781 to $28,885). The average number of lightning-caused U.S. homeowners insurance claims decreased by nearly 7 percent between 2019 and 2020 (from 76,860 to 71,551).

State-by-State Analysis and Homeowners Insurance Coverage

Florida, which has the most thunderstorms, remained the top state for lightning-caused homeowners insurance claims in 2020, with 6,756, followed by Georgia (4,686), Texas (4,675), and California (4,233). Damage caused by lightning, which results in a fire, is covered under standard homeowners insurance policies. Some policies provide coverage for power surges that are the direct result of a lightning strike, which can cause severe damage to appliances, electronics, computers and equipment, phone systems, electrical fixtures and the electrical foundation of a home.

In recognition of Lightning Safety Awareness Week, June 20-26, the Triple-I and the Lightning Protection Institute (LPI), a national organization that establishes standards for specifying and installing lightning protection systems and promotes lightning safety, encourage homeowners to install lightning protection systems in their homes. “When we think of lightning safety, we should make a distinction between personal safety and property protection,” said Tim Harger, LPI’s Executive Director. “Personal safety is what we do during a storm and the safest place in any lightning event is within a structure protected by a properly designed, inspected and certified lightning protection system,” he said. “Installing lightning protection systems in our homes or businesses is an action we can take before a storm that can mitigate against property damage.”