The UK’s weather is becoming increasingly extreme, with record temperatures, flash floods, and storms becoming more frequent. These extreme weather conditions are having a significant impact on our homes, leading to an increase in subsidence cases and property damage. Last summer’s heatwave caused subsidence cases to triple at one major insurer, and experts predict that everyone may end up paying more for home insurance as a result.
Data from Halifax Home Insurance reveals the effect of hot weather on UK homes. The number of subsidence cases received in August and September of last year was three times higher than the typical monthly average. Throughout the year, Halifax received 45% more claims compared to the previous year. Dry weather is one of the major causes of subsidence, as it causes clay-rich soil to shrink and foundations to drop. This leads to structural problems for houses built on such soil.
One example settled by Halifax involved the insurer paying out over £365,000 for repairs, demonstrating the extent of the damage that can occur. Tim Downes, a claims expert at Halifax, emphasizes the direct impact of last summer’s unusually high temperatures. He states that climate change has undoubtedly contributed to the severity and frequency of extreme weather events such as heatwaves, storms, and flooding.
According to the Association of British Insurers (ABI), insurers are expected to pay out £219 million for subsidence claims made last year, the highest amount since 2006 when the UK experienced a drought. Of the 23,000 subsidence claims in 2022, 18,000 were made in the second half of the year following the heatwave. This surge in claims is part of a larger increase in weather-related claims, including claims for property damage caused by storms and burst pipes.
Moreover, extreme weather conditions are leading to a rise in claims for damaged contents. Tesco Bank, for example, reported an increase in claims involving broken freezers due to the heatwave. The hot weather caused compressors to work harder, resulting in some giving out and spoiling food.
While the ABI cannot comment on how climate change will affect future insurance premiums, Matthew Harwood, an expert at Confused.com, believes it will likely be a contributing factor to rising prices. Harwood explains that as weather conditions continue to become more extreme in the UK, more people will be making insurance claims for property damage. As a result, insurers will have to adjust their pricing to account for the increase in claims, which will lead to higher premiums.
David Joyson, the chief customer officer at Homeprotect, agrees that extreme weather is a significant factor in rising premiums. He suggests that if an area has more properties prone to weather-related issues, insurance companies view those homes as riskier to insure, leading to higher premiums for homeowners, even if they haven’t directly experienced damage.
It’s important to note that these warnings come at a time when insurance premiums are already increasing. The average price paid for combined home buildings and contents insurance in the first quarter of this year was £315, a 6% increase compared to the same period in 2022.
Despite the potential for higher premiums, the cost of insurance could be well worth it if homeowners need to make a claim. Research from Confused.com indicates that the average claim for storm damage is around £3,334 for contents insurance and £3,108 for buildings insurance.
In light of these circumstances, homeowners are advised to take action as soon as they notice any signs of subsidence or weather-related damage. It’s crucial to contact insurers promptly when sudden cracks, sticking doors or windows, wallpaper ripping, or new sloping or dipping of ground floors are observed. Additionally, homeowners should thoroughly inspect their properties for damage and keep affected items for examination when contacting their insurers. Emergency repairs should be documented with receipts and invoices to be added to the claim if necessary.
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