• Verify cause-lightning, man-made surge, or wear & tear for example.
• Establish actual damages
• Review repair estimates
• Confirm LKQ replacements & Establish all Costs
• Issue Funds & Close Claim (hopefully)

In our short article here, we will focus on Stages 1 & 2.

Stage 1: Verification of Cause

First and foremost, is the verification of lightning (particularly if there is an exclusion for man-made current, or different limits apply). Before you spend a lot of money to have some “expert” perform a site inspection, dissemble equipment, and incur a bill roughly equal to the costs of the claim, here are some important points to consider:

• If there is an exclusion for man-made or artificially generated current (which is a common exclusion), the very first step is to verify the presence, (or absence), of lightning. The most reliable, and in our opinion most cost-effective way to do this is to utilize an accurate, reliable lightning reporting service such as Vaisala’s Strike Fax (www.vaisala.com). This is a service which uses a nationwide array of sensors to verify the presence of lightning. This is far more accurate than simple weather reporting services such as Weather Underground who report the presence or absence of storms. The mere presence of a storm does not guarantee that lightning actually struck your Insured. Nor does the absence of storms guarantee the absence of lighting. If lightning is not detected for the DOL (and a reasonable time frame around the date)*, then lightning is NOT the cause. Stop right here, is it time to issue a denial? Think about it, if lightning is not present, why pay, for example, to have a compressor torn apart and a consulting bill incurred. Once lightning is verified, it is still necessary to ascertain if that was the cause of loss. This is the point where your consultant can provide valuable assistance.

Once a covered cause is verified, it is still necessary for an accurate assessment of the reported damages, establishment of a causal link to the voltage event, and an audit of proposed repairs and replacements. Old damages, wear and tear, and damages unrelated to the reported cause of loss can all be lumped into catch-all of “lightning damage”.

This is also the time when most vendors, (especially telephone vendors) trot out standard lines like: “everything is stressed by lightning and is now unreliable”; or the old standard “we can’t get repair parts anymore, so the Insured needs a whole new system”. One simple fact: rarely is anything repaired at a component or part level anymore. Rather a technician simply replaces an electronic circuit card. The offending “stressed by lightning “parts are gone. Secondly virtually all phone system that are less than 10 years old, (an many even older), can be repaired with refurbished parts, a standard industry practice any other time.

We must end our short tutorial here, but for more complete information, or to receive our white paper: “Lighting Damage and Equipment Damage Claims”; please contact or email us at: TechWizard@pricehollingsworth.com.

Our new Tech Wizard Service provides a “tech-lite” booklet discussing lightning claims and the many issues confronting the adjuster.

Lawrie N. Hollingsworth, E.E.
President, PHC, Inc.

*The proper use of time and date is crucial to establishing lightning damage when using a lighting verification service. For more information contact:

TechWizard@pricehollingsworth.com