Payouts can rise to £400m during event year
Keoghs has warned insurers to plan for an increase in subsidence claims following this summer’s heat wave.
A recent forecast by building consultants OCA UK warned that 2013 was likely to be a “full-blown subsidence event year” unless the rest of August is extremely wet.
Insurers spend an average of £200m to £300m each year on subsidence claims, with costs rising to £400m in event years – when periods of particularly high rainfall are followed by very dry periods.
“Given that a surge in subsidence claims in 2013 is a realistic probability, insurers are advised to begin to budget planning for an increase in subsidence claims spending over the next 24-48 months,” said Matthew Rogers, a partner at the legal services firm.
One in five homes are at risk of subsidence according to the British Geological Survey.