Feature Article

Lightning versus power surge damage

Lightning may be one of the most claimed perils for equipment related losses. Despite its frequency, there is a lack of parity in the insurance industry regarding investigating and determining lightning related losses. Processes range from requiring a direct strike to the loss location to including storm or lightning on an estimate or invoice. To determine if lightning occurred, some of our partner companies may rely on lightning probability while others review verified strikes within a set distance of a loss location.

lightning bolts over neighborhood

To assist in better understand lightning related losses, FM Research completed a study for FM Boiler Re to specifically evaluate Lightning-Induced Over-voltages (LIOVs). This research was conducted with the intentions of developing a scientific fact-based approach in claims investigations to help determine cause or origin of power quality issues (lightning/power surge) which result in electrical breakdown damage.

LIOVs are observed due to the interaction of distribution lines with electrical fields generated by nearby lightning strikes to ground. Although less potent than direct strikes to an overhead line, LIOVs can be of significant magnitude and cause damage to electrical equipment. The following conclusions were provided:

  • Strike distance, strike current and line height were identified as contributing factors for lightning induced over-voltage conditions.
  • Off-premises strikes in close proximity to distribution lines pose a greater impact on severe damage than simply reviewing the distance from strike to loss location.
  • A strike greater than 20kA will induce over-voltage conditions which will propagate 2x further in arial fed lines than underground.
  • In addition to whether the distribution cabling is arial fed or underground, the distance lightning induced over-voltage conditions travel is dependent on the number of surge arresters along the line, rating and spacing between arresters.
  • The distance over-voltage conditions can travel is not affected by the number of load points or transformers between the strike and loss location.
  • The time of loss is the most crucial data point in identifying strikes that could cause electrical damage.

Notwithstanding external voltage issues, conditions internal to a loss location or even the piece of equipment can be contributing factors to electrical losses. These factors include:

  • Internal building surges
  • Increase operating temperature due to insufficient maintenance or general wearing of a component
  • Breakdown or deterioration of insultation material
  • Corrosion or poor contact at connection points
  • Excessive moisture
  • Operator error or
  • Faulty or inadequate design or workmanship

FM Boiler Re deploys an adaptive process to investigating lightning-related equipment claims. As part of that loss investigation, diagnostic testing results are obtained from repair vendors. Results consisting of insufficient detail may require further inspection of the damaged property by a qualified electrical engineer. Based on feedback of the inspecting party, review of the weather history for the time surrounding the date of loss and a lightning verification report assists in determining the most likely cause of loss.

For more information about FM Boiler Re’s lightning verification process, contact your reinsurance territory manager.