Lightning Awareness + Homeowners Insurnace Part 2

Traditional homeowners insurance covers damage related to a lightning strike. It is important to confirm policy exclusions, limitations, and loss settlement clauses that affect dwelling and personal belonging claims before a loss occurs. For example, damage from a direct lightning strike or near miss is typically covered, but damage from an artificially generated current (electric line or transformer-related power surge) is not.

Lightning damage to the dwelling is a structural loss. This type of loss is settled on a replacement cost basis, which means the claim is not reduced for depreciation. Detached garages and sheds are appurtenant structures. Losses to these buildings are also unaffected by depreciation. Depreciation does, however, apply to personal belonging loss settlements. Policyholders can overcome this by purchasing contents replacement cost coverage as an add-on.

Note the dwelling limit on your homeowners insurance policy. Ask your local agent to confirm your home's replacement cost. Replacement cost is based on how much it takes to rebuild the house with like kind and quality materials. Depreciation, market value, assessed value, and outstanding mortgages do not affect replacement cost. It is best to insure your home for its full replacement cost. Insuring below this amount could result in a claim settlement less than the amount necessary to repair the damage.

Pay attention to the contents coverage limit too. Most people own more personal property than they realize. Create a room-by-room personal property inventory to assess your contents insurance needs. Describe each belonging and include year, make, model, serial number, receipts, photos, and appraisals when possible. Review policy limitations on jewelry, high-value items, business equipment, and more. Look for coverage gaps. A local agent can help you secure additional protection for contents if neccessary.

If your home or property is damaged by lightning:

  • Assess damage. Take pictures. Record date, time, and pertinent details.
  • Verify your homeowners insurance deductible. This is how much you pay out-of-pocket before the insurer steps in. Compare the deductible to the amount of damage.
  • Contact the insurance company to report the loss as soon as possible. The insurer will assign a file number and adjuster to resolve the claim. Store this information and other claim-related details in an easy-to-locate file.
  • Make temporary repairs to prevent further damage. Save receipts as these expenses are reimbursable.
  • Cooperate with the adjuster as she conducts a detailed investigation to affirm coverage, assess the damage, estimate costs to repair or replace, and prepare a settlement offer.
  • Do not discard anything or make permanent repairs without the adjuster's approval.
  • Although dwelling damage is typically settled on a replacement cost basis, claims are usually resolved in two payments. The first, reduced for depreciation, can be used to begin repairs. The balance will be paid when work is complete.