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9 Jan 2019

Subsidence claims hit record high: will your home insurance costs rise?

Find out what to do if your home is affected

After an uncharacteristicallyhot summer, tens of thousands of homeowners made claims totalling £64 million to deal with the impact of subsidence over the third quarter of 2018, according to recent data from the Association of British Insurers (ABI).

The figures show that from July to September last summer, subsidence claims reached their highest levels since the record-breakingheatwaves seen in 2006 and 2003.

Here, we take a look at how subsidence affects your home and whether the spike in claims could result in your home insurance premium going up.

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Subsidence claims skyrocket in the UK

Over 10,000 households made claims worth a total of £64 million to deal with the impact of subsidence in just three months of 2018, recent data from the ABI revealed.

In the previous quarter, only 2,500 claims were recorded, totalling £14 million - meaning that claims rose 350%, the highest quarter-on-quarter jump in 25 years.

The figures for July, August and September are the highest levels of subsidence claims since 2006 and 2003 when the nation experienced record-breaking heatwaves. The ongoing hot weather of summer 2018 saw some UK regions experience the driest months on record.

What is subsidence?

Subsidence occurs when the foundation of your house collapses or sinks. It usually affects homes built on clay soil, which has a tendency to shrink and swell due to the weather.

The first signs of subsidence are the sudden appearance of cracks in the wall, usually after ongoing periods of dry weather.

Cracks caused by subsidence have distinct characteristics and will be:

  • more than 3mm thick - often getting wider after time
  • diagonal
  • wider at the top than at the bottom
  • visible from inside and outside your home
  • close to windows and doors.

It's worth noting that cracks can appear on walls for a number of reasons, so spotting one might not be an immediate cause for panic.

If you suspect that your home is being affected by subsidence, you need to inform your insurance provider as soon as possible. The sooner they can investigate your case, the earlier work can begin to resolve the issue before it escalates to a more serious and costly problem.

Is subsidence covered by home insurance?

Most home insurance providers will cover damage caused by subsidence but the excess is usually quite high - normally around £1,000.

The cost of fixing subsidence damage will vary depending on the severity of damage. Claims can range from a few thousand pounds for minor damage to more than £100,000 for more serious incidents.

Buildings insurance policies will often only cover subsidence damage to your actual house.

This means that areas such as patios, garden walls, driveways and swimming pools are unlikely to be covered unless your house is damaged at the same time.

Homes that have suffered subsidence damage are at a higher risk of being affected again which can make it tricky to look for a new insurance provider. If you've made a claim for subsidence in the past year and wanted to switch to another company, you're likely to get rejected by most insurers.

Will the cost of home insurance rise?

We spoke to severalhome insurance providers to see if the spike in subsidence claims could result in the cost of home insurance premiums increasing for UK households across the board.

All agreed that overall, home insurance prices are likely to remain unaffected by the rise in claims.

However, individual customers that have claimed for subsidence could see an increase in their premium when it comes to renew. This is because insurers take a number of factors into account when working out how much you'll have to pay for home insurance, including whether or not you've had to make a claim in the past.

Customers who have had to make a claim for subsidence are more likely to make another claim in future, a risk factor that could push up their premiums.

NFU Mutual:'NFU Mutual sets prices taking a view of long-term weather conditions so we allow for these subsidence u201ceventsu201d to occur periodically. Because of this long-termoutlook, there are no immediate plans to increase home insurance premiums due to the number of subsidence claims we've received.

'However, as is normally the case, individual policies may see their premiums go up if they do make a claim, for instance, their no-claims bonus may be affected.'

LV insurance: 'As is always the case when someone makes a claim, this will be factored into their premium at renewal. The way insurers calculate premiums is driven by a number of factors, so it's difficult to say whether one specific issue will affect it, but broadly speaking we wouldn't expect to see premiums for all home policies become more expensive purely because of subsidence claims.'

The AA Insurance: 'It is possible that premiums could rise but not substantially so. Most of this risk will be reinsured and home insurers have the capacity to deal with it. Home insurance premiums had been rising previously, but not by much and started falling again largely because the weather has been relatively benign over the year.'

Axa Insurance:'As insurers base premiums on a number of factors including previous claims, if your home has been affected by subsidence, or is in an area where subsidence is a common issue, then your premiums may reflect this. However, our dedicated team of subsidence experts work hard to keep claims costs down while still supporting our customers during what is often a very difficult time.'

How to reduce your risk of subsidence

There are a number of steps you can take to reduce your risk of subsidence.

It's important to make sure that trees and shrubs are planted at least five to 10 metres away from your property. This will avoid their roots drying out soil close to the property, which could cause the foundation to shrink.

Another way to reduce your risk of subsidence is to keep pipes and drainage systems well-maintained to stop water leaking into the soil beneath your house.

Finally, it's vital that you triple check the surveyor's report before buying a new home. If the property has been underpinned, it's likely that it has suffered subsidence in the past, making it more likely to happen again.

For more information and tips, check out our guide on subsidence. We've also analysed the standard contents insurance and buildings insurance policies of more than 30 providers and combined it with feedback from thousands of customers to produce impartialhome insurance provider reviewsto help you find the best home insurance provider.