What's Happening?
The insurance industry is experiencing a significant increase in subsidence claims, with payouts totaling £153 million in the first half of 2025. This surge is attributed to the UK's warmest spring on record, which has heightened the risk of subsidence—a condition where the ground shrinks under dry conditions, causing damage to homes. The Association of British Insurers (ABI) reported that approximately 9,000 claims were lodged, with an average payout of £17,264 per claim. Homeowners are advised to watch for early signs of subsidence, such as cracks and sticking doors, and to manage nearby trees and shrubs to mitigate risks.
Why It's Important?
The increase in subsidence claims highlights the growing impact of climate change on the insurance industry. As extreme weather conditions become more frequent, insurers may face higher costs and increased pressure to adjust their policies and premiums. Homeowners in areas with clay-rich soils are particularly vulnerable, and the industry must adapt to these changing environmental conditions. This situation underscores the need for insurers to develop strategies to manage climate-related risks effectively, which could influence future policy decisions and pricing models.
What's Next?
Homeowners are encouraged to seek immediate attention for potential subsidence damage and to contact their insurers promptly. The insurance industry may need to reassess its approach to underwriting and risk management in light of these developments. Additionally, there may be increased advocacy for policies that address climate change and its effects on property insurance.
