This is not something new, but something not often considered.  When there is an insulator flashover due to lightning on a distribution circuit, the lightning surge does very little harm to the conductor, but the fault current arc is a different story.  On bare conductor, the fault current arc has a tendency to travel away from the source of the power and will stretch its-self out until it breaks.  However when an insulator flashes over on to an insulated conductor due to lightning, the fault current arc can not travel away from the insulator because of the insulation and all the arc's heating and arcing remains in one place until a breaker or other over current device ends the fault.   A concentrated fault current arc, has more than enough energy and heat to burn through an insulated conductor. 

 Because of this higher burndown risk on insulated conductor vs. bare conductor, arrester suppliers offer arresters specifically for protecting insulated conductor. This CLX arrester below is a product of Tyco and is offered to protect insulated conductors from lightning related burndown.

The main object of this invention is to produce a varistor with improved high-current capability and energy absorption capability.  In this way the physical size of varistor may be reduced, as well as the size of the apparatus of which it forms a part. This is accomplished by depositing a thin layer of metal on the ground disk, and applying the standard aluminum layer on top of the 5-30 micron thin layer.  There are several methods of deposition including magnetron sputtering, ion beam sputtering, DC sputtering and radio frequency sputtering.  The micro thin layer can also be achieved by using a chemical vapor deposition method.   Tests demonstrated a significant improvement in energy handling capability.