Wet weather is something that has happened across the UK for centuries. What has changed for insurers is massive population growth, asset values and the building of housing estates on what was previously a flood plain or meadow for grazing animals. Here are some thoughts from Mainmark on the cost of rainstorms and the increasing value of property claims in general;
As the UK experiences some of its wettest periods throughout 2024, the adverse weather is expected to have a substantial effect on subsidence incidents and related insurance claims, which will resonate into 2025.
Beginning with significant rainfall, the first quarter of this year was reported to be the wettest period the UK has seen since records began. This trend continued throughout 2024 and saw southern and central England experience record-breaking rainfall in September.
Property insurance claims throughout this period reflected the severe weather, highlighted in a recent report from the Association of British Insurers (ABI). Latest data revealed that claims for damage to homes from storms, heavy rain and frozen pipes reached £136 million in the third quarter of 2024, 6 per cent higher than the £128m paid out in the same period of 2023. Claims for weather damage to commercial premises also saw an increase of 28 per cent (totalling £90 million) on the same quarter last year.
The report also highlighted a 61 per cent increase in subsidence-related insurance claims, at £66 million, compared to the previous year. The rise underscores the growing prominence of subsidence as a cause for property claims, and this year’s extreme weather conditions are expected to continue this spike.
Freya Chapman, Residential Lead at subsidence specialist Mainmark UK, comments: “While hot weather is more commonly known to cause subsidence, prolonged periods of rainfall, and the resulting flooding, create an equally alarming risk. The ongoing wet weather we’ve experienced following last year’s record heat will have had a profound effect on ground saturation. The resulting washout and foundation movement is expected to cause cases of subsidence to peak, with central regions such as Bedfordshire and Oxfordshire, which saw record rainfall in 2024, at a more significant risk.
“Insurers can expect to see a peak in subsidence-related claims in coming months, and due to the lengthy process from surveying to payout, which can take upwards of six months, we most likely won’t see these claims come to fruition until late 2025 or early 2026. Insurers should look to prepare and utilise what methods they can to try to speed up the claims process to ensure the issue is resolved promptly and damage is minimised.”
The standard claims process is to monitor the subsidence over several months, through a series of visual inspections, crack and level monitoring, site surveys and, in some cases, in-situ assessments to test soil samples. This lengthy process ensures a clear evaluation to be made about whether the issue is ongoing or stabilising, however, the longer the issue is left untreated the worse the damage can become resulting in a more costly solution.
Under the Financial Conduct Authority guidelines, insurers must respond to a claim within a reasonable time frame, typically eight weeks. To comply with or exceed such regulations, Mainmark recommends eliminating the need for multiple site visits and prolonging the monitoring process by specifying the issue and solution at the initial site inspection. Remote sensing technology can be used to quickly assess potential subsidence risks and detect early signs of soil movement or structural changes, allowing for a quicker response and mitigation of the issue before the subsidence becomes severe.
As an insurer or loss adjuster, having a ‘go-to’ set of approved suppliers who are familiar with your procedures could really help speed things along too – ensuring that repairs and mitigation efforts are completed at a consistent and high standard. This in turn can help residents and building owners obtain a resolution to their subsidence efficiently, assisting in evaluating the severity of the problem and limiting the costs of ongoing claims.
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