After a summer thunderstorm, it is often not the roof that is damaged but the living room: the TV will not switch on, the router is dead, the fridge's control unit has blown. When you report the claim, you then come across a separate term: ‘secondary effect of lightning’. This is one of the most frequently reported and most frequently disputed types of loss in home insurance, because it bears no visible trace of the lightning, the cover has its own limit, and proof depends largely on the client. As a broker, I see that most rejected claims fall down not on strict policy conditions but on missing documentation. This article sets out the boundaries of the cover, what is expected of you and the correct procedure.
- The secondary effect of lightning is a separate insured event: not the destruction caused by a lightning bolt striking the property, but the overvoltage or induction generated by a nearby strike, which damages electrical appliances – policy conditions typically cover it with a separate, lower limit.
- The insurer pays only for what is an insured event under your contract: fluctuations in the utility grid, switching surges or wear and tear of the appliance are typically not lightning damage, and some policy conditions may also require surge protection for sensitive electronics.
- What decides is whether the damage can be proven: the time and place of the storm, a list of the failed appliances, a repairer's report on the cause of the fault – and do not throw the appliance away until the insurer has made its decision.
Direct lightning strike and secondary effect: two separate events
Hungarian policy conditions typically distinguish between two events. The direct effect of lightning is the destructive or thermal effect of the lightning bolt that strikes: a damaged chimney or roof structure, a fire – this is part of the fire and natural perils cover, typically up to the full sum insured. The secondary effect is something else: as one set of policy conditions puts it, ‘damage caused by overvoltage or induction occurring as a result of the secondary effect of a lightning strike’, arising in electrical machines, appliances and equipment. The lightning does not have to strike your house: a nearby strike sends the voltage surge into your appliances through the power lines, the aerial or the telephone cable. In the basic package of the Certified Consumer-Friendly Home Insurance of the MNB (Hungary's central bank and financial supervisor), the ‘secondary effect of lightning’ is a compulsory element, and most basic packages on the market also include it – but not all of them, and not on the same terms.
In practice, the difference shows up in the limit and the deductible. Direct lightning damage is covered up to the sum insured; for the secondary effect, policy conditions typically set a limit per loss event or per year – in some contracts a fixed amount, in others a few per cent of the sums insured for the building and contents, and depending on the package possibly no limit at all. If a storm takes out the TV, the air conditioner and the solar inverter at the same time, it is this limit that decides how much of the loss stays with you; so it is worth finding this line on your own policy and, if your household has a lot of electronic equipment, looking among the add-on covers for a higher limit or separate electronics cover.
What is typically not lightning damage?
The insurer pays only for what is an insured event under your contract. Voltage fluctuations in the utility grid, overvoltage caused by a broken neutral conductor, switching transients or the appliance's own wear and tear are not a secondary effect of lightning – and are therefore typically not covered by the policy conditions – even if ‘there happened to be a storm’. The typical dispute arises because the symptom of the fault is the same: the appliance will not switch on. The insurer therefore checks whether there was lightning activity at the stated time and in the stated area, and asks for a professional description of the cause of the failure. If the repairer's report names a mains overvoltage as the cause, the claim may have to be pursued with the electricity supplier rather than under the home insurance.
The other boundary is protection. The joint recommendation of the Hungarian Electrotechnical Association (MEE) and MABISZ (the Hungarian insurers' association) on preventing lightning and surge damage describes two layers: the lightning protection system protects the building and guards against fire, while multi-stage surge protection protects the electronics. As early as 2012, the trade press reported that some insurers pay for consumer electronics built from low-voltage circuits only if these were also fitted with surge protection – this still differs from insurer to insurer, so it is worth reading the ‘secondary effect of lightning’ clause in your own policy conditions: if a protection requirement appears there, it is not a recommendation but a condition of payment. According to an information sheet from Alfa, devices with low-voltage circuits such as ‘computers, home cinema systems, LCD/LED/plasma TVs, alarm systems’ are the most sensitive – these can be protected even with a surge-protected power strip. This appears among the loss prevention routines, together with unplugging devices before a storm.
What is at stake? The MABISZ figures
According to a 2015 summary by MABISZ, between January 2010 and May 2015 insurers received 265,000 claims notifications for damage caused by lightning; of these, the direct effect accounted for more than 117,000 loss events and around HUF 8.5 billion of damage, and the secondary effect for around 148,000 notifications and around HUF 12 billion. So the secondary effect is not a minor item but the larger half of lightning damage – and according to the association, because equipment is becoming ever more sensitive, ‘surge impulses arriving through the networks cause failures more often than previously experienced’. In an individual household the damage is typically not on a catastrophic scale, but several appliances failing at once, combined with the limit, can leave you with a considerable amount to cover yourself.
Reporting and proof: the procedure
The primary route for reporting lightning damage is the insurer's claims line or online portal – the general claims reporting procedure applies here too, with a few additions. Record the date and approximate time of the storm; the insurer typically checks this against meteorological data. List all the failed appliances with their model and age and, if you have them, the invoice or warranty card; adding an omitted item later arouses suspicion. Do not throw away the appliances or have them repaired before the insurer's decision: the inspection or the repairer's report examines the cause of the fault, and the appliance itself is the evidence. Ask the repair service for a written opinion on the nature and cause of the failure, together with a repair quote or confirmation that the appliance cannot be repaired – this is the document insurers typically expect. Policy conditions typically set a short deadline of a few days for reporting; under Section 6:453 of the Hungarian Civil Code (Ptk.), a delay has legal consequences if it makes it impossible to establish a material circumstance – with lightning damage this is precisely the risk, because the link between the storm and the fault becomes harder to prove as time passes.
For the settlement, policy conditions take the repair cost as the basis or, if the item cannot be repaired, the replacement value – for contents, many contracts also deduct depreciation, and the limit and the deductible apply on top of this. If you do not consider a rejection justified, the route after the insurer's complaints procedure is the Financial Arbitration Board (PBT) or the courts; the MNB does not decide individual claims disputes. If a case gets stuck or disputed, I help where I can – by analysing the policy conditions and reviewing the complaints route, on the client's behalf.
What should you do now?
Check on your policy whether the secondary effect of lightning is included, with what limit and what deductible, and whether the policy conditions contain a protection requirement. Connect the TV, the computer, the router and the network devices through a surge-protected power strip, and during a storm unplug whatever you can. If a loss occurs: date, list, repairer's report, notification via the claims line, and keeping the appliance until the decision. If the limit is low compared with your household's electronics, it is worth asking for a higher limit or an add-on cover at the renewal date.
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Sources
- MABISZ (Hungarian insurers' association): Summer storm damage – lightning is a significant risk (30 June 2015)
- MABISZ Szemle (review): Damage caused by lightning – how to protect your valuables (2020)
- MEE (Hungarian Electrotechnical Association) and MABISZ recommendation on preventing lightning and surge damage (biztositas.hu, 2016)
- MNB (Hungarian central bank / supervisor): Certified Consumer-Friendly Home Insurance – contents of the basic package
- Groupama Garancia home insurance policy conditions (2560/2, in force from 1 July 2009, archived example) – secondary effect of lightning (definition, limit)
- Alfa Biztosító: Protect your appliances from overvoltage caused by lightning
- Villanylap: The insurer pays only for lightning-protected devices (2012)
- Hungarian Civil Code (Ptk.) Section 6:453 – notification of the insured event (Act V of 2013)
