After the Lightning Strike: The Hartford Finds Costs from Property Damage on the Rise in Recent Years, Despite Fewer Reported Claims
Company links trend to higher rebuilding costs and prevalence of cutting-edge electronics; cautions policyholders to protect property and make sure they have adequate insurance
HARTFORD, Conn., Sept. 13 /PRNewswire-FirstCall/ -- Lightning is one of the most common, yet dangerous, weather hazards in this country. Experts say approximately 20 million cloud-to-ground strikes occur every year, with each bolt containing nearly 100 million electrical volts and reaching temperatures of 50,000 degrees Fahrenheit. Besides causing severe bodily injury and death, a powerful lightning strike can produce extensive property damage by sparking a fire or simply by surging through the electrical circuitry of a home or business. In fact, insurance industry resources note that lightning, on average, is responsible for more than $5 billion in annual losses.
In reviewing its own claims data from the past five years, The Hartford Financial Services Group, Inc. (NYSE: HIG) one of the nation's leading providers of investment and insurance products, identified a notable trend among its homeowners and business insurance policyholders who experienced losses from lightning. While company records showed that the number of lightning-related claims had declined during this period, possibly due to more customers taking precautionary measures, the total costs of those claims had risen significantly.
"When you think about it in terms of consumer trends and the cost of living, it does make sense," explained Vicky Pace, an assistant vice president of claims at The Hartford. "People are purchasing many more higher-end appliances and electronics, such as flat screen televisions, home theatre systems, computers, and office equipment, which can be very expensive to replace when damaged. Labor and material costs associated with rebuilding have also been rising and can add to the price tag of a claim."
According to The Hartford's data, the number of lightning-related claims declined by 48 percent from January 2001 through July of 2006, while the cost of replacing property and belongings grew by 77 percent during that same period. Company data also showed that 73 percent of all lightning strike claims in those five years were reported during the months of June through September. Thirty-seven percent of total lightning losses, the greatest amount, occurred in the Southeast region, while the Northeast, in second place, generated 18 percent.
"Lightning is an extremely powerful force that should never be underestimated," noted Maggie Griesing, vice president of loss control for The Hartford. The Loss Control team helps the company's underwriters and claims professionals evaluate risk, and also assists customers to identify and control risk that can create losses. "Often, people think it 'won't happen to me.' We hope this data will alert home and business owners to take some simple but necessary measures to safeguard themselves, as well as their property and belongings."
Just ask Hartford customers, Jim and Gailya Miazza of Simsbury, Conn. They know all too well how nature's electricity can wreak havoc on a home. This past June, an errant lightning bolt struck the Miazza's house, starting a fire that caused extensive damages. "My wife and I never guessed a lightning storm could take away our most prized possession in a matter of minutes," admitted Mr. Miazza. "Luckily, we managed to get out of the house safely and are now in the process of rebuilding. But it's a wake-up call we won't soon forget. We'd urge any homeowner to take necessary measures to protect their property from this risk."
Some of the steps Griesing and her team recommend include the following:
Before a Storm
- If you live in a lightning prone area, consider installing a lightning protection system on your home, building or a nearby tree. This can help provide a safe path for lightning currents to follow and discharge,reducing the potential for damage to your property. Keep in mind, these systems should be installed in accordance with your local building code and Underwriters Laboratories (UL) and/or National Fire Protection Association (NFPA) guidelines.
- Also consider installing electrical surge arrestors and suppressors. This equipment can help divert power surges and reduce the amount of voltage your circuitry and electronics are exposed to if a lightning strike occurs.
- Back up all data on your computer system, storing the backup off premises, if possible, and install an uninterrupted power supply (UPS) system to protect against blackouts.
During and After a Storm
- When a severe storm is approaching, listen to the radio or TV for updated weather information. An AM radio is sensitive to electrical disturbances and the presence of background static can indicate that a storm is in the area.
- Prior to thunder and lightning activity, unplug computer and other electronic equipment to reduce the potential for damage from power surges.
- Unless there is an emergency, stay off the telephone. A lightning strike can travel through utility and telephone lines into your home. Avoid showering, bathing, washing dishes or other activities involving water since water and metal pipes can conduct electricity.
- Afterwards, check the area for fires and electrical damage.
- Inspect surge arrest and suppression equipment for any damage from a direct hit and repair damage if necessary.
- Check all main electrical equipment and circuits if a direct hit is uspected, and before powering equipment that was shut down.
"Equally important," added Griesing, "is to review and update your insurance policy to make sure there's enough coverage for expensive electronics and equipment in your home or business. In some cases, you may need to identify a list of those items for your insurer, 'scheduling' them separately on your policy and, if necessary, purchasing additional protection."
The Hartford, a Fortune 100 company, is one of the nation's largest financial services and insurance companies, with 2005 revenues of $27.1 billion. The Hartford is a leading provider of investment products, life insurance and group benefits; automobile and homeowners products; and business property and casualty insurance. International operations are located in Japan, Brazil and the United Kingdom. The Hartford's Internet address is http://www.thehartford.com/.
