Property risks beyond wildfires — what to watch for if dry heat continues
The economic costs of abnormally dry weather are substantial, and often have a ripple effect on the insurance industry.
The effects of global warming were underscored this past spring and summer, as vastly different climate zones experienced record-high temperatures. Wildfires — perhaps the most visible consequence of hazardous drought conditions — raged across the Northern Hemisphere at unrivaled ferocity.
We witnessed Europe’s deadliest fire in more than a century tear through Greece, watched over 876,400 acres burn in Northern California just this year, and saw parts of Sweden and Scandinavia set ablaze.
The economic costs of abnormally dry weather are substantial, and often have a ripple effect on the insurance industry and property claims — but wildfires are not the only events we need to watch for. If weather patterns persist, dangerously dry soil conditions could also create a surge in subsidence events.
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Subsidence is a term that describes the sudden sinking of the earth’s surface. It becomes a serious issue, particularly for properties built on clay soils near trees, when loss of moisture in the soil causes it to dry and shrink. Instability in the soil and the resulting ground movement can lead to movement of building foundations, and with shifting foundations comes the potential for property damage.
Regions to watch
The current weather trends and the possibility of subsidence is a great concern in places like London, where many of the city’s homes are constructed on clay-based soils. In the U.K., subsidence claims have spiked more than 350% within six weeks this past summer, and could continue to rise into the fall. Any city with above-average temperatures or notably well below-average rainfall are regions that should be watchful.
For example, we saw a subsidence surge in 2003 that resulted in a total of 54,100 insurance claims costing an estimated $468 million. Comparatively, a surge in 2016 saw 48,000 claims that totaled nearly $353 million. Surges can and will happen, but as of right now, we are hoping for cooler and wetter weather to avoid surge volumes as we continue through 2018.
Advice for property owners
With this forecast of exceptionally hot and dry weather expected to continue, claim volumes are anticipated to continue to rise throughout September.
Small cracks are common after periods of hot dry weather, but consumers should be on the lookout for new or expanding cracks in plasterwork, doors or windows that are suddenly sticking for no apparent reason and rippling wallpaper that isn’t caused by water exposure. It is wise to monitor new cracks in case they worsen over time.
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If you see these possible signs of subsidence, immediately inform your insurer so they can begin their assessment and monitoring your property’s movement to determine the cause and prevent further damage. With live remote crack monitoring in place that feeds back data every eight hours, insurers are able to assess risks and anticipate claim volumes before they occur.
Insurers can also use technology to actively track soil conditions, level monitoring readings and read long-term weather forecasts to keep property owners informed of possible subsidence risks.
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Kevin Williams (Kevin.williams@cl-uk.com) is head of Subsidence Service for claims processing firm Sedgwick in the United Kingdom. Kevin is a Chartered Building Surveyor, Chartered Insurance Practitioner and Chartered Loss Adjuster.