United Kingdom
Close this search box.

Subsidence Claims and Climate Change Shifts

Is 2022 the year of the major subsidence event claims spike? After a long, hot summer, industry reports indicate that the volume of subsidence claims is on the rise and many times higher than years prior.

Scientifically speaking, we have just passed the “driest month of the year” – a time when the ground is at its driest after a prolonged period of record high temperatures. With subsidence events intrinsically linked to climate change, a cause gaining mainstream momentum, the expectations from insureds on how their claims are dealt with are changing. Coupled with increased industry pressure and regulatory requirements, insurers face a changing environment when managing the coming influx of subsidence claims.

Let’s take a look at three key considerations impacting subsidence claims.

Climate-crisis-induced change to consumer expectations

Generally, claims involving tree root subsidence conclude in the removal of the offending tree, or in carbon-heavy repair works in lieu of the tree removal. However, insureds are now considering their course of action, and those of their insurer, through the lens of climate crisis consciousness.

Now, there is a growing expectation from insureds that their insurer has plans to be net zero by 2025, adhere to commitments towards the circular economy, preference restoration of trees (due to their environmental benefit) rather than removal and conduct home repairs in line with future-proofing retrofitting obligations (despite the elevated cost compared to like-for-like repair). In addition, the carbon footprint of any course of action is being considered.

Future standards need to be applied now

We know that subsidence is a costly and time-consuming problem, and subsidence claims by nature take a long time to settle – creating a headache for insurers and homeowners alike. Repairs and recommendations can’t go ahead while the ground is still moving – which can take anywhere from around nine months to two years to stabilise – thereby delaying necessary investigation into the event.

Therefore, claims lodged in 2022 may not be resolved until 2025, by which time consumer expectations towards climate-conscious action, and regulatory obligations, will be more advanced. The upshot? Insurers would do well to conduct the claims process now with those future standards in mind, knowing they will be a reality by the conclusion of the incoming subsidence claims.

The increased influence of interested parties

The insurance industry is not immune to the scrutiny and lobbying of climate change campaign groups, and we expect their voices and influence to grow stronger. Pressure on insurers will come from heavy hitters like Extinction Rebellion, small but mighty niche activist groups and even motivated individuals from areas heavily affected by subsidence events.

What’s more, the opinions of the general public hold more weight on the claims process for subsidence events thanks to the Environmental Act 2021’s Duty to Consult law. The law now compels tree owners to consult with local residents before removing a tree involved in a subsidence claim.

While the growing influence of these groups is not inherently bad, it could bring about increased pressure and responsibility for insurers, so getting ahead of this now is more important than ever

With all of this in mind, we encourage insurers to prepare now for an increase in climate-based claims. In the short-term, this may mean assessing your capabilities and resourcing to appoint a TPA partner like Gallagher Bassett to bolster your claims management process, particularly through surge season. In the longer-term, it will be all the more important to actively assess the compliance of any partner, and those of your own. With Gallagher Bassett’s dedicated compliance team, you can be assured we will handle your evolving regulatory obligations and compliance.

Contact me today to find out how we can help you through surge season with best-practice claims management for all lines of insurance.

Nic Sproul

Director Property

More Posts


Setting the Standard in Loss Adjusting

The past few weeks have seen adverse weather hit the UK, and floods pose unique challenges, demanding insurers tailor response plans specifically for these scenarios. As the UK contends with extreme weather conditions, we bring you five tips to preparing a robust storm surge support plan.

Read more

The Role of Collaboration in Compliance

Collaboration is the word of the moment when it comes to managing compliance related concerns, from cybersecurity and data breaches to consumer protection laws and regulatory reporting. As Beth Povey explains in this new article, the data reveals more than 40% of UK insurers are planning to leverage external expertise to ensure they remain compliant.

Read more

Keep your finger on the pulse of the latest industry news and insights.

Sign up to our monthly newsletter today.

Download Our Global Insurance Industry Whitepaper

Hi there!

Want to drop us a line?  You can get in touch by filling out the form below and we’ll get back to you as soon as possible!