ILC ARTICLE

Subsidence – background to the current challenges 


Ahead of his participation during ILC’s Home & Property specialist Subsidence Conference taking place on Thursday 7 March 2024 at the Manufacturing Technology Centre (Coventry), in this contributed feature Innovation Group’s, Technical Director, Richard Rollit sets the scene on the current state of subsidence claims across the UK. 

Industry wide subsidence claim volumes for 2023 are not expected until later this year but 2023 has been a quiet year. Our claim volumes, which generally follow the wider pattern for the industry are shown below: 

In past years there have been surge events in 2018 and 2022 when there were about 23,000 claims overall. Both 2019 and 2020 were busy years with around 19,000 claims but 2021 was a wet year with only 15,000 claims. Last year was another quiet year and it seems likely that volumes for 2023 will be similar to 2021 at around 15,000 claims.  

However, it isn’t just the volume that is important, the mix of work is also different with far fewer clay shrinkage claims. Clay shrinkage claims (tree root subsidence) are usually more costly because damage is more extensive than subsidence caused by leaking drains. This means the average cost for 2023 should be lower than 2022 but this ‘good news’ is likely to be masked by the high inflationary pressures which are particularly acute in subsidence. 

Between January 2020 and July 2023 average claim costs in subsidence have risen over 100% whereas all perils have risen by just over 40%. 

We believe the difference is largely driven by the difficulties associated with removing trees causing subsidence. This often results in more costly, disruptive and environmentally damaging underpinning schemes.  

Whilst 2023 was relatively quiet the effects of the previous year’s surge continued to have an impact as the claims moved through the different phases. We sometimes refer to this as a ‘pig in python’. 

Whilst we tend to think about the initial visits as the most obvious impact from surge, in fact the greater impact is often felt later in the cycle as the claims move through mitigation, monitoring and into repair.  

In addition, during a surge year we can see earlier claims reopening, particularly if a third party has pruned rather than removed their trees. This increased volume also impacts on claim durations. 

Subsidence tends to feel inflationary pressures more keenly because of the long tail nature of subsidence and the higher average cost. Over the last five years the average cost of a claim (all perils) was around £400 whereas subsidence was £7,300. There is also a different dynamic when it comes to customers who are understandably concerned that their home (usually their largest financial asset) may lose value or it may delay their plans to sell and move on.  

The Financial Ombudsman Service (FOS) recently noted a large rise in complaints: 

“Overall, we received a total of 93,114 complaints between 1 January and 30 June 2023. That is significantly higher than the 79,921 complaints we received in the last six months of 2022. 

“There are several reasons for the increase in complaints. Last month, in our most recent quarterly data, we highlighted that building and motor insurance complaints had hit a five-year high, partly due to insurers delaying in paying out on claims while at the same time contractor availability impacted the speed of repairs. 

“It is probably not surprising that the rise in complaints volumes is also seen to some extent with subsidence customers.” 

So, whilst it is a quiet period, in terms of new claim volumes, it is also an extremely challenging time within subsidence. As a result, we are focusing on our customers to make sure they are regularly updated, so they know what is happening on their claims and in this way, we help to manage their expectations. We are also mindful that there is a balance in relation to cost and service and we are doing all we can to reflect client philosophies. 


ILC’s Home & Property specialist Subsidence Conference makes a return on Thursday 7 March 2024 at the Manufacturing Technology Centre (Coventry) backed for the second consecutive year by Headline Sponsor: Optera; along with Gold Sponsor: 360Globalnet; and Silver Sponsors: Courtesy Kitchens & Bathrooms, Flawless Soil Testing, and Sedgwick. 

Tickets are now available to book via the ILC website. To find out more about the opportunities to get involved please contact: alan@iloveclaims.com or nic@iloveclaims.com 

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