Heatwave leads to surge in housing subsidence claims across southern England

Insurance companies are experiencing a surge in subsidence claims after the recent hot weather caused cracks to appear in homes across London and the south-east, in particular, drawing comparisons with 2018, when more than 20,000 properties were affected.

Loss adjuster Sedgwick on Monday registered a surge event, meaning that subsidence claims it received from insurers were for two weeks more than 200 per cent above normal levels. Heatwaves in recent weeks have sucked the moisture out of clay soils, unsettling houses.

Sedgwick expects claims to reach 400 per cent above ordinary levels in the next few weeks.

“Pretty much all the moisture has gone from the soil,” said James Preston, the company’s technical director. He added that this year could prove to be worse than 2018, when 23,000 claims were made across the industry, amounting to a bill of £145mn.

Four years ago, wetter weather following the extreme heat softened some of the blow. But despite rainfall in recent days, Preston said the longer-term weather forecast could make for drier, riskier conditions. “We could stay at a higher level of desiccation in the soil for a longer period,” he said.

The Association of British Insurers, a trade body, said its members understood that the “threat of subsidence can be very stressful for homeowners”. Its advice to homeowners is not to panic if they spot a crack, as it could be the result of something other than subsidence.

LV, one of the UK’s biggest insurers covering 2.4mn homes, this week said it had experienced a rise of more than 200 per cent in subsidence claims in the first two weeks of August compared with the same period last year.

That comes after the company, part of Germany’s Allianz, reported £1.2mn worth of claims linked to last month’s heatwave, as heathland fires spread into gardens, destroying garages, fences and garden furniture. Meanwhile, predictions of flash flooding from rainfall on dried-out soil pose a further threat to homeowners and their insurers.

Sarah Smith, LV’s head of home underwriting, said this month that the industry was “really starting to see the effects of climate change and the impact this is having on homes — whether that be storm, flood, fire or subsidence claims”.

Aviva, which insures 2.9mn or just over 10 per cent of UK households, this week said it had received more customer queries regarding subsidence following the recent hot weather.

But it added in a statement that it was “still too early to say whether this year will result in an overall rise in the number of subsidence claims and we’ll need to continue to monitor the weather during the next few months”. Any wet weather would mitigate the risk, it said.