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What is Subsidence and Is It Covered By Insurance?

Oct 13, 2022

What is subsidence?

The ABI define subsidence as ‘when the ground beneath a building sinks, pulling the property’s foundations down with it.’

Subsidence often happens when the ground loses moisture and shrinks. This could be because of long hot, dry spells of weather. Or because of trees etc removing moisture from the ground.

You can find more information about subsidence, what causes it and how to spot it on the ABI website.

Why is the risk of subsidence increasing?

Climate change is having a very real impact. This year saw some of the hottest weather on record, with long spells of hot, dry weather. And many instances of drought being declared across the country.  Which will inevitably have an impact on the number of subsidence claims.

In fact, the insurance industry is already reporting (or anticipating) increases in the number of subsidence claims due to the heatwave we saw this summer.

Is subsidence covered by insurance?

Yes. Most buildings insurance policies will provide cover for damage caused by subsidence as standard.

In many cases, policies will provide cover for loss or damage to your building caused by subsidence.

But in many cases will not cover damage to surrounding property such as patios, decking, paths, driveways etc unless damage occurs at the same time as it does to the home and because of the same cause.

As usual you will need to check your policy wording for the exact details of the cover and amount of cover that you have and any exclusions which may apply.

How may the insurance market react to the increasing risk of subsidence?

If the weather continues to warm it is likely that more properties will be at risk of suffering subsidence. Even properties outside of those areas previously deemed more susceptible to subsidence.

Education for homeowners on understanding what subsidence is, how to spot it and the importance of acting quickly if you suspect subsidence will be one area the industry will likely focus on to aid prevention of long term problems. And we’ll hopefully continue to see improvements in technology used to not only deal with subsidence but also to detect it.

We may expect to see insurance premiums rise in response to the increasing likelihood of claims. As well as in response to market factors such as the rapidly rising costs of materials and labour currently bring seen.

And there may be more focus on risk selection by insurers. We may for example, see stricter policy wording regarding cover for subsidence. And more difficulty obtaining insurance if your property is in an area deemed at high risk for subsidence.

It can already prove more difficult and expensive to obtain insurance if you have previously made a claim for subsidence. In these instances, it can be beneficial to work with an insurance broker who can work with you to help you obtain cover.

Climate change is having an impact on many areas of our lives. More extreme weather increases the risk of property damage – whether that be due to fire, flood, or subsidence amongst others. So having the right amount and type of insurance in place to protect your property will be essential. As well as understanding how to protect your property. If you are reviewing your home insurance then do get in touch with Anthony Jones on 020 8290 9086 or email us at personal@anthonyjones.com

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