What's Happening?
The UK has experienced record spring heat, leading to £153 million in insurance payouts for subsidence damage in the first half of 2025. Subsidence, caused by the shrinkage of ground under dry conditions, has resulted in approximately 9,000 claims, with an average payout of £17,264 per claim. The Association of British Insurers (ABI) has highlighted the increased risk of subsidence due to extended periods of dry, warm weather. Homeowners are advised to watch for early warning signs such as ripped wallpaper and sticking windows or doors, and to seek immediate attention for significant cracks.
Why It's Important?
The surge in subsidence claims underscores the impact of climate change on property insurance. As temperatures rise, the risk of subsidence increases, particularly in areas with clay-rich soils. This trend poses challenges for insurers in managing risk and setting premiums. Homeowners may face higher insurance costs and need to take preventive measures to protect their properties. The situation highlights the need for the insurance industry to adapt to changing environmental conditions and develop strategies to mitigate climate-related risks.
What's Next?
Homeowners are encouraged to manage nearby trees and shrubs and maintain gutters and plumbing to reduce subsidence risk. Insurers may need to reassess their risk models and pricing strategies to account for the increased frequency of subsidence claims. The ABI will likely continue to monitor climate trends and provide guidance to homeowners and insurers. As climate change progresses, the insurance industry may see further shifts in policy offerings and risk management practices.
