Subsidence surge?

For a weather obsessed nation, the very wet spring, the summer heatwave and warm Autumn have given us lots to talk about.

Long periods of hot, dry weather, particularly following a wet spell can lead to an increase in subsidence problems. Whilst there hasn’t been a surge in subsidence claims since 2003 where claims totalled £390 million, June and July were much hotter and drier than average. In the South East there was virtually no rain for the whole month of June and July was the driest since 1961.

With 2018 being one of the hottest summers on record in the UK, insurers are reporting a surge in the number of subsidence claims.

According to ABI statistics, the hot, dry summers of 2003 and 2006 led to an increase in subsidence claims and large costs to the industry; with 54,100 claims in 2003 costing an estimated £400 million and 48,000 claims in 2006 costing around £301 million.

The British Geological Survey (BGS) estimates that 1 in 5 homes (or 6.5 million) in the UK are at risk of subsidence.  Subsidence can occur anywhere, but some areas are more susceptible due to the moisture content of the soil and those houses built on clay soil are particularly susceptible due to the clay soil shrinking during periods of drought.

Higher risk areas include the South East where there is a higher proportion of clay in the soil.  Other factors that affect the subsidence risk include trees and other vegetation near the property, leaking drains and erosion due to flooding and houses that were built before the 1970s that have shallow foundations.

Key factors that affect the overall risk profile for a property include property type, vulnerability and understanding which policies are prone to making a claim.  For example, older houses that have been affected by subsidence in the past are likely to have been have strengthened via partial or full underpinning. New properties are built to different standards with deeper foundations than older properties and so in general have lower vulnerability. Property type is important, as for example, single storey dwellings or bungalows are lighter structures and so are, in general, more vulnerable to damage through smaller amounts of ground movement than say a 2-storey or heavier structure.

Business Insight use the latest property data together with detailed vegetation and tree data, geology, long-term climate data and claims to model the level of subsidence risk for insurers. ‘Drought Insight©’ is licensed by a large number of household insurers and is recognised as the market leader in providing insurers with a deeper understanding of exposure to drought-related subsidence claims.

Contact your Account Manager or our Sales Team for more information about managing subsidence risk on 01926 421408.