Subsidence claims in the UK – what's happening?

Managing director on the state of the market

Subsidence claims in the UK – what's happening?


By Mia Wallace

Headlines across the national press have warned of the prospect of an avalanche of subsidence claims in the wake of the prolonged hot and dry weather seen by the UK in recent weeks. But are these concerns translating into claims figures?

Speaking with Insurance Business UK, James Long (pictured), MD of Criterion Adjusters – a loss adjuster specialising in the high-net-worth (HNW) space – emphasised that while the firm has seen an uptick in subsidence claims, it has not yet turned into a surge.

“But then scientifically the very driest day of the year, as far as the ground is concerned, is September 25,” he said. “That’s normally when the ground is at its driest, though obviously this year that could be a bit earlier. So, we’re expecting to see more claims coming in over the next few weeks.”

Many of the properties that Criterion specialises in supporting tend to be on the larger side and to be occupied by wealthy people. And what sets the HNW market apart, he said, is that a lot of policyholders will own one or more houses, with a secondary property often abroad. They will typically spend several weeks during the summer at that property, and therefore don’t return until early September, or later in September if their children go to private schools.

“So, that’s when they notice the damage,” he said. “While a typical household policyholder will likely notice that damage straight away, there can be a lag before high net worth claims are notified. Even then, bearing in mind the size of some of these properties, it’s quite possible that if there’s cracking in a bedroom or cracking in an outbuilding, they may not look at that for several weeks.

“If they do not notice it for some time, again, there’ll be a delay in notification. And often they have their own builders and they will normally get their builder out to have a good look at it, maybe even a surveyor as well, before they notify the claim. Again, this is quite unique to the high net worth market. So, for all of those reasons we are certainly expecting subsidence claims to ramp up over the next few weeks to the next two or three months.”

Exploring the makeup of where subsidence claims tend to originate, Long highlighted that older properties can potentially be more at risk due to likely having more shallow foundations, though this is a generalisation with all sorts of exceptions. Geographically, he said, the majority of claims are in the South East where most of the ground is clay or part clay – which is the most shrinkable kind of ground. However, Criterion also sees many claims in the Midlands and South West as well, with a reduced number currently being seen in the North of England and Scotland.

Digging into the work done by him and his team to support HNW clients with subsidence claims, he emphasised the need of having the right team assembled. With a upturn in surge claims on the horizon, he said, Criterion has been making sure it has plenty of specialist adjusters available who are deeply familiar with subsidence claims and how to support clients.

“We’re making sure that we’re communicating with the customers all along the way,” he said. “That’s the key to what we do, it always has been and always will be – communicating with the customer to set their expectations. No policyholders have any idea of the process involved in a subsidence claim, indeed of the timescale involved.

“So it’s absolutely critical for us to explain on day one, that it could take six, 12, 18 months or more, to get to the bottom of what the problem is, and to address it, and then to make sure that the property is stable after that. It all comes down to the soft skills of our adjusters.”

Long noted that having an empathetic and human approach to supporting clients is what lies at the core of Criterion’s proposition, and it’s a way of doing business that gels well with HNW policyholders. Empathy and communication are critical qualities to being a great loss adjuster and are the two key skills the firm ensures all its adjusters possess. It doesn’t matter how strong somebody is technically, he said, if they don’t have those two skills, they won’t be any good as a HNW adjuster. It’s as simple as that.

“Having a bespoke approach is so important,” he said. “For example, we never send any standard emails out, other than the acknowledgement of our appointment on day one. After that, all of our correspondence is bespoke and written individually for that particular customer. Because that’s what high-net-worth customers want. They don’t want to read a letter with 15 paragraphs, only one of which applies to their claim. They want a letter written about their particular claim, so that’s the way we tend to approach it where we can.”

Criterion’s emphasis on the role of communication in quality loss adjusting extends beyond clients too, Long said, and working closely with its broker partners is critical to what the firm does. Brokers are invited to any site meetings and are cc’d in on all the correspondence that goes to the customer as a matter of course.

And in the event of there being bad news to share, the team will speak to the broker before the policyholders to make sure they understand and agree with the decision that has been reached. In addition, he said, in such circumstances, brokers are offered the opportunity to speak with their client before Criterion does, if that works for them.

Looking ahead to the coming weeks and the expected increase in subsidence claims that is expected, Long had two key pieces of advice for HNW policyholders. Firstly, he said, have your broker’s details on hand, as, in the event of a claim, you will need to notify the claim to the broker in the first instance.

“And the other advice I’d offer is to inspect your property very, very thoroughly,” he said. “And if you’ve got a big country house, etc., it could take some time to have a really good, thorough inspection of the external and internal walls, but it’s worth it. So, have a really good, careful inspection of your property just to see if there is any sign of cracking or any evidence of subsidence.”

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