Extreme weather leading to a rise in property claims
Last year saw an increase in subsidence claims, with one insurer seeing the monthly claims average triple from August to September and rise by nearly half annually. In this article we look at the potential causes of that increase and the consequences for insurers.
Hot and dry weather can cause foundational and structural issues to buildings built on clay soil, leading to sinking, cracking and tilting. Further pay outs may arise due to electrical items such as refrigerators and freezers failing or reducing in performance due to high temperatures. Such electrical failures may in turn lead to further insured losses such as under business interruption policies where businesses in the food industry suffer from spoiled stock.
This month we experienced another heatwave across the UK and the on-going impact to property insurance can be seen. The Consumer Intelligence Home Insurance Price Index recorded that the average price of home insurance has risen by over a quarter in the last year, following adjustments by insurers due to a rise in claims and in the costs of repairing damage and replacing contents.
Considerations for underwriters
As most policies will specifically refer to subsidence, underwriters should review their policy wordings. They may wish to consider the conditions in their policy wordings to ensure that insureds are monitoring their buildings for cracks, sticking doors and windows and other signs of subsidence.
Contents
- The Word, September 2023
- Mind the GAP - FCA warning to GAP insurers
- Death and disgrace policies: What can insurers learn from the allegations against Russell Brand?
- The RAAC crisis: Is it really back-to-school this September?
- A new digital safe space – How does the EU Digital Services Act affect insurers?
- Insurance and the Automated and Electric Vehicles Act 2018
- CyberCube’s Global Threat Outlook: The evolving threat of cyber operations
- “TOBA traps” - general exposure risk under existing TOBAs
- Making numbers easy - complying with the Customer Understanding objective
Key contact
Tim Johnson
Partner
tim.johnson@brownejacobson.com
+44 (0)115 976 6557
You may be interested in...
Legal Update - The Word
The Word, March 2024
Legal Update
Commercial Court considers requests for stay or anti-suit injunction where two competing reinsurance wordings
Legal Update
Parametric flood policies - Insurers no longer in uncharted waters?
Legal Update
LockBit unlocked: International taskforce takes down major cyber criminal organisation
Legal Update - Consumer Duty
80% of GAP market pause sales amid Consumer Duty concerns
Legal Update
FCA writes to MPs over car insurance premiums. What do increases mean for fraud?
Legal Update
Biodiversity Net Gain: A new landscape for restoration clauses
Legal Update
The regulators’ pet project
Legal Update
Welsh Government inks new regulations for Acupuncture, Body piercing, Electrolysis and Tattooing
Legal Update
Insurance and the escalating situation in Suez Canal
Legal Update
Update: Further debates on the Automated Vehicles Bill in the House of Lords this month
Legal Update - The Word
The Word, February 2024
Legal Update
Progress on the Automated Vehicles Bill
Legal Update - The Word
The Word, January 2024
Legal Update
Voldemort causes havoc at Sellafield – nuclear risks and insurance policies
Legal Update
Adapting to change or falling behind? The FCA under fire from the National Audit Office
Legal Update
A blow to manufacturers as Thai Court confirms insurers’ denial of cover in wind turbine case
Legal Update
Premium finance – a poverty premium
Legal Update
'Clear and unambiguous' exclusions: Cameron Soule v Woodward Design + Build LLC
Legal Update
Follow the leader: Insurers using algorithmic underwriting
Legal Update - The Word
The Word, December 2023
![Al Mana Lifestyle Trading L.L.C. & Others v United Fidelity Insurance Company PSC & Others [2023] EWCA Civ 61 – Update](/getattachment/b24270a8-0bb3-4a8a-bcf0-37830f99591b/shutterstock_710149084_6x4.jpg?variant=HeroImageTabletVariantDefinition)
Legal Update
Al Mana Lifestyle Trading L.L.C. & Others v United Fidelity Insurance Company PSC & Others [2023] EWCA Civ 61 – Update
Legal Update
Proposed amendments to the Arbitration Act 1996
Legal Update
Chubb leads a $50m consortium to help mitigate the increasing risks associated with lithium-ion batteries
Legal Update
D&O: Australian Courts consider the meaning of ‘personal advantage'
Legal Update
Trade credit: Australian Courts consider the meaning of ‘recoveries’
Legal Update
Energy insurance: Technip Saudi Arabia Limited v The Mediterranean and Gulf Cooperative Insurance and Reinsurance Company ('Medgulf')
Legal Update
Covid BI litigation (Autumn 2023): Insurance coverage disputes update
Legal Update - The Word
The Word, November 2023
Legal Update
Failure to prevent fraud: how can my organisation prepare?
Published Article
Deal over jets stranded in Russia may serve as blueprint
Legal Update
Customers in financial difficulty: Cost of living crisis and the FCA
Legal Update
Insurable interest: Quadra Commodities S.A v XL Insurance Co SE and Others
Legal Update
The Luton Airport car park fire – implications for insurers
Legal Update
Are amendments to be expected for the Arbitration Act 1996?
Legal Update - Consumer Duty
Insurance industry Consumer Duty update – Fair value, FCA Dear CEO letters and multi-occupancy buildings
Legal Update
Simplifying sanctions clauses - LMA3100A and LMA3200 released
Legal Update
The Opioid crisis - how does the rise in Fentanyl overdoses affect insurers?
Legal Update
Australian Court of Appeal considers welding exclusion
