From 1997 to 2010, Florida had more lightning strikes per square mile than any other state, according to the National Lightning Detection Network. That time span includes a few fierce hurricane seasons, of course. The property damage from those storms totaled somewhere in the billions, with each storm costing more than the last.
The Insurance Information Institute has isolated damage caused by lightning strikes during that period and discovered an anomaly. It turns out that U.S. insurance claims related to lightning strikes declined by almost one-third, but the costs of the claims nearly doubled. Digging a little deeper, the III concluded that the country's victims of unlucky lightning strikes own many more expensive electronics items that can get zapped.
The NLDN estimates that more than 23 million instances of lightning occurred in the U.S. in 2011. Unfortunately, when lightning strikes, it can inflict catastrophic damage in, literally, a flash. Nationwide, costs shot up 93 percent for individual claims during the study period, up to more than $5,100 per claim.
The public has become electronic-centric. Consumers have filled their homes with high-price flat screens, multiple computers and video gaming consoles which are all vulnerable to power surges caused by lightning. From 2007 to 2011, consumer shipments for electronic items increased by 15 percent, according to the Consumer Electronics Association.
One theory for the decline in claims is that consumers are increasingly investing in surge protectors that save electronic equipment from power overloads caused by lightning strikes. But insurance companies paid almost $1 billion for damage caused by lightning last year, despite the drop in claims.
It's more expensive to replace fried electronic equipment than it used to be, for a number of reasons. In just the last couple of years, for example, floods and earthquakes in Asia -- not to mention the tsunami in Japan -- have had a dramatic impact on the supply of electronics and electronic components.
In the end, it comes down to supply and demand: Shortages lead to price increases, price increases lead to more expensive equipment, and damage to more expensive equipment leads to higher claim payouts. Florida insurers and electronic-centric homeowners alike are hoping that Tropical Storm Debby is the only storm the state sees this year.
Source: Reuters, "Rise of gadgets doubles costs of lightning damage," Ben Berkowitz, June 21, 2012