UK insurers face £219m subsidence payout

Pardon the Interruption

This article is just an example of the content available to mallowstreet members.

On average over 150 pieces of new content are published from across the industry per month on mallowstreet. Members get access to the latest developments, industry views and a range of in-depth research.

All the content on mallowstreet is accredited for CPD by the PMI and is available to trustees for free.

Insurers in the UK expect to pay £219m in subsidence claims made in 2022, many of which caused by last summer's “record-breaking high temperatures”, according to industry figures.

While the final insurance bill has not been fully settled due to ongoing monitoring of some homes to assess the extent of any subsidence damage, the Association of British Insurers stressed the amount is the highest expected insurance subsidence bill since 2006.

The heatwave, which peaked with the hottest UK temperature of 40.3 °C on 19 July, resulted in the equivalent of one new subsidence claim made every 15 minutes in the second half of the year, said the ABI. 

Of the 23,000 subsidence claims made during the year, the majority – 18,000 – were reported in the months following the summer heatwave. 

The average claim cost £9,600.

Laura Hughes, ABI’s manager for general insurance, said: “Thousands of homeowners felt the impact of last summer’s record-breaking heatwave long after temperatures returned to normal. Insurers understand that suffering subsidence is worrying and stressful.”

What is subsidence? 

According to the ABI, subsidence is when the ground beneath a building sinks, pulling the property’s foundations down with it. “Subsistence usually occurs when the ground loses moisture and shrinks due to prolonged dry spells, or the presence of trees and shrubs which cause the soil to lose moisture,” the ABI said on its website. 

Are insurers doing enough to educate homeowners about subsidence?

More from mallowstreet