General Insurance Article - Subsidence claims rise in the wake of last years heatwave


Insurance claims for subsidence have risen sharply following the hot, dry summer of 2018, according to the latest data from the Association of British Insurers.

 Claims for subsidence relating to domestic properties rose by around 300% in volume and 350% in value, the highest quarterly rise since records began. Commercial claims rose by more than 200%. While the value of many claims for subsidence is modest, those involving underpinning are often well in excess of £100,000.

 London and South East England form the primary region for subsidence claims because of their clay-based soils, which are subject to volume change. Trees intensify the problem by dewatering clay soils through their root systems. Older properties, such as Victorian terraced houses, are particularly vulnerable due to their relatively shallow foundations.

 Nicholas Bathurst, a partner specialising in property liability at global law firm Clyde & Co, said: “We are likely to see a sustained spike in subsidence related litigation, as insurers seek to recover their increasing outlays against tree owners. Often these are local authorities and other owners of tree stock but, as the general awareness of tree related subsidence risk grows, we can perhaps expect to see more individual tree owners being pursued."

 “If the combination of high temperatures and low rainfall experienced last summer becomes more commonplace, property insurers may be compelled to respond. That could mean taking an approach similar to flood cover a few years ago – using detailed mapping to identify problematic areas, soil types and trees, leading to higher premiums, higher deductibles and even withdrawal of cover altogether.”

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