House prices
Materials
Fuel & energy costs along with labour shortages
The cost of materials required to repair and reinstate a building is being pushed upwards not only due to inflation rising, but also as a result of increased demand due to supply chain disruption arising from Brexit, Covid-19 and the Russia-Ukraine war. Figures by McLarens suggest there has been a 20% increase to the cost of building repairs, 15% increase for cladding and 10% for internal repair costs. (1)
In addition, the costs of properties has reached a peak in 2022, with figures indicating that there has been an 8.1% increase to the price of the average residential property in 2022 (2). Whilst that may not be too significant for the average residential properties, that sort of percentage difference for much larger residential or commercial properties could see insurers paying out much more and policyholders being significantly underinsured if they are not re-assessing their property value.
The impact of increased fuel and energy prices are also affecting material related costs. Coupled with this, the construction industry is facing a labour and skills shortage aggravated by Brexit and some workers having left the UK. A higher demand for labour means workers have more influence on pay and flexibility to move around the market, pushing up costs. With such demand in the industry, the power is in the hands of the contractors to choose work which is likely to be most profitable to them; this may not always be repair work, contrasted against, for example, constructing a new-build housing estate.
Rising costs
A separate issue causing claims inflation is the number of insurance claims being made as a result of extreme weather events.
In 2022 alone, England faced three named storms within the space of one week which brought flooding and extreme winds causing damage to property such as to the roof of the Millennium Dome in London, and also an unprecedented extreme heatwave in July 2022 leading to fires. Weather-related property damage, including those arising from subsidence, will become far more common as we become further exposed to the impact of climate change globally over the next 10-20 years.
Extreme weather events
The impact of Climate Change
In addition, insurers should look to review their reserves to ensure they accurately reflect the current likely cost of repair and reinstatement in the current inflated market.
Insured policyholders may wish to review their property and assets and ensure the current declared value is accurate, to prevent underinsurance issues. Similarly for companies whose properties may be damaged, policyholders may wish to check business interruption cover is adequate to cover for any period during which their property is unhabitable and work is halted as a result of this, particularly in light of increasing delays to undertake repairs.
What does this mean for Property Damage Insurers?
Get in touch
Personal Injury Discount Rate
Impact on multipliers
The impact of claims inflation is likely to become more acute over the next few years as the UK moves into the recession.
If there is a requirement for alternative accommodation to be sourced if a damaged property is unhabitable whilst repairs are being carried out, this may be required for a longer period due to delays in the industry. These requirements also incur additional cost concerns for insurers: allowances may not be enough to compensate customers for electricity consumption, increased fuel costs and food allowances. Insurers therefore risk paying out above their risk or reserves.
Alternatively, in cases where quicker repairs are feasible but alternative accommodation is still required for a short period, one Loss Adjuster we are working with advised that many landlords are now asking for 12 months minimum as a tenancy length whereas before it was achievable to secure a six-month tenancy agreement. Both of these factors are causing alternative accommodation costs to rise. In addition, new regulations coming into effect in 2025 will require properties to have an EPC of at least C. This may mean a number of landlords looking to sell properties rather than face the expense of modernising, or raising rents to recoup their costs. These will in turn make alternative accommodation harder to find and more expensive.
So, what does this mean for property damage claims? Generally, they will take longer to settle and become more expensive for insurers. We have not yet seen the impact of this first-hand in cases we are dealing with at present, as it can take a while for such trends to trickle down into claims to enable data to be analysed. We suspect this is something our insurer clients will be keeping a close eye on over the coming year.
Rental costs & new regulations
(1) McLarens, “Inflation Report 2022: Rising Costs of Property Claims” September 2022 - https://mclarens-mediacloud.s3-accelerate.amazonaws.com/2022/09/MCL_UKI_Inflation_Report_2022_R5.pdf
(2) Zoopla, “What’s happening in the housing market right now?” 31 October 2022 - https://www.zoopla.co.uk/discover/property-news/house-price-index-october-2022-whats-happening-in-the-housing-market-right-now/
Claims inflation in property damage claims is the result of an unprecedented series of global events over the last 24 months that it seems no insurer could have possibly ever predicted. Our team can assist with mitigating the impact of this where possible. The property damage team at Clyde & Co has experience dealing with a wide range of complex property liability claims, subrogated recoveries and advising on policy coverage disputes.
Typical claims dealt with by the team include, although are not restricted to, those resulting from:
How can we help?
We can advise on reserving and have experience in pre-litigated and litigated claims, whether as subrogated recoveries or the defence of property damage claims, to get our clients the best settlement result. We have experience advising insurers on disputes relating to application of policy terms and cover and Financial Ombudsman Service complaints which might arise as a result.
Property fraud
Fires
Escapes of water and flooding
Subsidence
Construction related losses
What does this mean for Property Damage Insurers?
Claims inflation in property damage claims is the result of an unprecedented series of global events over the last 24 months that it seems no insurer could have possibly ever predicted. Our team can assist with mitigating the impact of this where possible. The property damage team at Clyde & Co has experience dealing with a wide range of complex property liability claims, subrogated recoveries and advising on policy coverage disputes.
Typical claims dealt with by the team include, although are not restricted to, those resulting from:
In addition, insurers should look to review their reserves to ensure they accurately reflect the current likely cost of repair and reinstatement in the current inflated market. Insured policyholders may wish to review their property and assets and ensure the current declared value is accurate, to prevent underinsurance issues. Similarly for companies whose properties may be damaged, policyholders may wish to check business interruption cover is adequate to cover for any period during which their property is unhabitable and work is halted as a result of this, particularly in light of increasing delays to undertake repairs.
Reserves
Insurers should, in the first instance look to ensure that policyholders are aware of the need to notify claims as soon as possible, in accordance with their obligations under the policy of insurance. This will allow insurers to investigate matters at the earliest opportunity and drive claims forward, ultimately to a resolution.
Policyholders
Cash settlements
Underinsurance
The end impact of the above for policyholders is higher insurance premiums and policy excesses. This can lead to issues of underinsurance, where insured policyholders are knowingly under-declaring the value of their property to avoid facing higher fees. Alternatively, a policyholder may risk simply not insuring their property in order to avoid paying any premium at all. And this is not simply a property-specific issue; across a number of areas, insurers are discussing underinsurance relating to single item limits, such as jewellery, watches and so on.
When looking at damaged property, it is often apparent that insured policyholders may have also unknowingly under-estimated the value of their property and not considered that the value is likely to have increased in line with inflation. Issues such as underinsurance can lead to breaches of CIDRA and the Insurance Act, as well as indemnity issues and Financial Ombudsman complaints, adding further delay to the already extended time taken to settle property damage claims and further triggering claims inflation.
Generally insurers may be more inclined to cash settle claims or aspects of the claims early where possible, to reduce the legal costs associated with cases running on for longer due to repair and reinstatement delays. In respect of recoveries, we often see that cash settled claims tend to struggle from an evidence perspective and lead to a more reduced recovery settlement, which insurers should bear in mind. In addition, insurers may in fact find that policyholders become more hesitant to agree cash settlements given the delays being experienced in the construction industry generally which could have a detrimental impact on the time it takes to carry out repairs to the property in question, and the general uncertainty surrounding the cost of those repairs.
The impact on accommodation claims is potentially a mixed bag: Adaptations will likely inflate due to increased labour costs and higher materials prices, while house prices are reported to be decreasing for the first time in over a decade, though the impact is likely to be highly variable between regions. On the other hand, economic pressures on landlords have caused rental prices to increase significiantly. A rental property might be a short-term resolution for a claimant, for example during an independent living trial, and it could be that schedules plead longer renting periods to maximise the compensation pot.
Accommodation
In cases with rehabilitation funding in place under the Rehabilitation Code or joint instructions, we have seen case managers reporting shortages of therapists, driving up the costs of those providers still on offer. This has been particularly acute in clinical neuropsychologists in and around London. This shortage also impacts time spent and overall cost to case management fees, as sourcing suitable suppliers takes longer.
Therapies
Loss of earnings
Care & case management
The impact of claims inflation is likely to become more acute over the next few years as the UK moves into the recession.
Rising costs
Rental costs & regulations
Fuel, energy costs & labour shortages
House prices
Materials
The end impact of the above for policyholders is higher insurance premiums and policy excesses. This can lead to issues of underinsurance, where insured policyholders are knowingly under-declaring the value of their property to avoid facing higher fees. Alternatively, a policyholder may risk simply not insuring their property in order to avoid paying any premium at all. And this is not simply a property-specific issue; across a number of areas, insurers are discussing underinsurance relating to single item limits, such as jewellery, watches and so on.
When looking at damaged property, it is often apparent that insured policyholders may have also unknowingly under-estimated the value of their property and not considered that the value is likely to have increased in line with inflation.
Issues such as underinsurance can lead to breaches of CIDRA and the Insurance Act, as well as indemnity issues and Financial Ombudsman complaints, adding further delay to the already extended time taken to settle property damage claims and further triggering claims inflation.
Generally insurers may be more inclined to cash settle claims or aspects of the claims early where possible, to reduce the legal costs associated with cases running on for longer due to repair and reinstatement delays. In respect of recoveries, we often see that cash settled claims tend to struggle from an evidence perspective and lead to a more reduced recovery settlement, which insurers should bear in mind. In addition, insurers may in fact find that policyholders become more hesitant to agree cash settlements given the delays being experienced in the construction industry generally which could have a detrimental impact on the time it takes to carry out repairs to the property in question, and the general uncertainty surrounding the cost of those repairs.
Insurers should, in the first instance look to ensure that policyholders are aware of the need to notify claims as soon as possible, in accordance with their obligations under the policy of insurance. This will allow insurers to investigate matters at the earliest opportunity and drive claims forward, ultimately to a resolution.
Get in touch
We can advise on reserving and have experience in pre-litigated and litigated claims, whether as subrogated recoveries or the defence of property damage claims, to get our clients the best settlement result. We have experience advising insurers on disputes relating to application of policy terms and cover and Financial Ombudsman Service complaints which might arise as a result.
Property fraud
Construction related losses
Subsidence
Escapes of water and flooding
Fires
Claims inflation in property damage claims is the result of an unprecedented series of global events over the last 24 months that it seems no insurer could have possibly ever predicted. Our team can assist with mitigating the impact of this where possible. The property damage team at Clyde & Co has experience dealing with a wide range of complex property liability claims, subrogated recoveries and advising on policy coverage disputes.
Typical claims dealt with by the team include, although are not restricted to, those resulting from:
How can we help?
Get in touch
We can advise on reserving and have experience in pre-litigated and litigated claims, whether as subrogated recoveries or the defence of property damage claims, to get our clients the best settlement result. We have experience advising insurers on disputes relating to application of policy terms and cover and Financial Ombudsman Service complaints which might arise as a result.
Property fraud
Construction related losses
Subsidence
Escapes of water and flooding
Fires
Claims inflation in property damage claims is the result of an unprecedented series of global events over the last 24 months that it seems no insurer could have possibly ever predicted. Our team can assist with mitigating the impact of this where possible. The property damage team at Clyde & Co has experience dealing with a wide range of complex property liability claims, subrogated recoveries and advising on policy coverage disputes.
Typical claims dealt with by the team include, although are not restricted to, those resulting from:
How can we help?
Get in touch
We can advise on reserving and have experience in pre-litigated and litigated claims, whether as subrogated recoveries or the defence of property damage claims, to get our clients the best settlement result. We have experience advising insurers on disputes relating to application of policy terms and cover and Financial Ombudsman Service complaints which might arise as a result.
Property fraud
Construction related losses
Subsidence
Escapes of water and flooding
Fires
Claims inflation in property damage claims is the result of an unprecedented series of global events over the last 24 months that it seems no insurer could have possibly ever predicted. Our team can assist with mitigating the impact of this where possible. The property damage team at Clyde & Co has experience dealing with a wide range of complex property liability claims, subrogated recoveries and advising on policy coverage disputes.
Typical claims dealt with by the team include, although are not restricted to, those resulting from:
How can we help?
Get in touch
We can advise on reserving and have experience in pre-litigated and litigated claims, whether as subrogated recoveries or the defence of property damage claims, to get our clients the best settlement result. We have experience advising insurers on disputes relating to application of policy terms and cover and Financial Ombudsman Service complaints which might arise as a result.
Property fraud
Construction related losses
Subsidence
Escapes of water and flooding
Fires
Claims inflation in property damage claims is the result of an unprecedented series of global events over the last 24 months that it seems no insurer could have possibly ever predicted. Our team can assist with mitigating the impact of this where possible. The property damage team at Clyde & Co has experience dealing with a wide range of complex property liability claims, subrogated recoveries and advising on policy coverage disputes.
Typical claims dealt with by the team include, although are not restricted to, those resulting from:
How can we help?
Get in touch
We can advise on reserving and have experience in pre-litigated and litigated claims, whether as subrogated recoveries or the defence of property damage claims, to get our clients the best settlement result. We have experience advising insurers on disputes relating to application of policy terms and cover and Financial Ombudsman Service complaints which might arise as a result.
Property fraud
Construction related losses
Subsidence
Escapes of water and flooding
Fires
Claims inflation in property damage claims is the result of an unprecedented series of global events over the last 24 months that it seems no insurer could have possibly ever predicted. Our team can assist with mitigating the impact of this where possible. The property damage team at Clyde & Co has experience dealing with a wide range of complex property liability claims, subrogated recoveries and advising on policy coverage disputes.
Typical claims dealt with by the team include, although are not restricted to, those resulting from:
How can we help?
In addition, insurers should look to review their reserves to ensure they accurately reflect the current likely cost of repair and reinstatement in the current inflated market. Insured policyholders may wish to review their property and assets and ensure the current declared value is accurate, to prevent underinsurance issues. Similarly for companies whose properties may be damaged, policyholders may wish to check business interruption cover is adequate to cover for any period during which their property is unhabitable and work is halted as a result of this, particularly in light of increasing delays to undertake repairs.
Reserves
Insurers should, in the first instance look to ensure that policyholders are aware of the need to notify claims as soon as possible, in accordance with their obligations under the policy of insurance. This will allow insurers to investigate matters at the earliest opportunity and drive claims forward, ultimately to a resolution.
Policyholders
Generally insurers may be more inclined to cash settle claims or aspects of the claims early where possible, to reduce the legal costs associated with cases running on for longer due to repair and reinstatement delays. In respect of recoveries, we often see that cash settled claims tend to struggle from an evidence perspective and lead to a more reduced recovery settlement, which insurers should bear in mind. In addition, insurers may in fact find that policyholders become more hesitant to agree cash settlements given the delays being experienced in the construction industry generally which could have a detrimental impact on the time it takes to carry out repairs to the property in question, and the general uncertainty surrounding the cost of those repairs.
Cash settlements
The end impact of the above for policyholders is higher insurance premiums and policy excesses. This can lead to issues of underinsurance, where insured policyholders are knowingly under-declaring the value of their property to avoid facing higher fees. Alternatively, a policyholder may risk simply not insuring their property in order to avoid paying any premium at all. And this is not simply a property-specific issue; across a number of areas, insurers are discussing underinsurance relating to single item limits, such as jewellery, watches and so on.
When looking at damaged property, it is often apparent that insured policyholders may have also unknowingly under-estimated the value of their property and not considered that the value is likely to have increased in line with inflation. Issues such as underinsurance can lead to breaches of CIDRA and the Insurance Act, as well as indemnity issues and Financial Ombudsman complaints, adding further delay to the already extended time taken to settle property damage claims and further triggering claims inflation.
Underinsurance
What does this mean for Property Damage Insurers?
Get in touch
We can advise on reserving and have experience in pre-litigated and litigated claims, whether as subrogated recoveries or the defence of property damage claims, to get our clients the best settlement result. We have experience advising insurers on disputes relating to application of policy terms and cover and Financial Ombudsman Service complaints which might arise as a result.
Property fraud
Construction related losses
Subsidence
Escapes of water and flooding
Fires
Claims inflation in property damage claims is the result of an unprecedented series of global events over the last 24 months that it seems no insurer could have possibly ever predicted. Our team can assist with mitigating the impact of this where possible. The property damage team at Clyde & Co has experience dealing with a wide range of complex property liability claims, subrogated recoveries and advising on policy coverage disputes.
Typical claims dealt with by the team include, although are not restricted to, those resulting from:
How can we help?
Get in touch
We can advise on reserving and have experience in pre-litigated and litigated claims, whether as subrogated recoveries or the defence of property damage claims, to get our clients the best settlement result. We have experience advising insurers on disputes relating to application of policy terms and cover and Financial Ombudsman Service complaints which might arise as a result.
Property fraud
Construction related losses
Subsidence
Escapes of water and flooding
Fires
Claims inflation in property damage claims is the result of an unprecedented series of global events over the last 24 months that it seems no insurer could have possibly ever predicted. Our team can assist with mitigating the impact of this where possible. The property damage team at Clyde & Co has experience dealing with a wide range of complex property liability claims, subrogated recoveries and advising on policy coverage disputes.
Typical claims dealt with by the team include, although are not restricted to, those resulting from:
How can we help?
A separate issue causing claims inflation is the number of insurance claims being made as a result of extreme weather events.
In 2022 alone, England faced three named storms within the space of one week which brought flooding and extreme winds causing damage to property such as to the roof of the Millennium Dome in London, and also an unprecedented extreme heatwave in July 2022 leading to fires. Weather-related property damage, including those arising from subsidence, will become far more common as we become further exposed to the impact of climate change globally over the next 10-20 years.
Extreme weather events
The impact of Climate Change
In addition, insurers should look to review their reserves to ensure they accurately reflect the current likely cost of repair and reinstatement in the current inflated market.
Insured policyholders may wish to review their property and assets and ensure the current declared value is accurate, to prevent underinsurance issues. Similarly for companies whose properties may be damaged, policyholders may wish to check business interruption cover is adequate to cover for any period during which their property is unhabitable and work is halted as a result of this, particularly in light of increasing delays to undertake repairs.
Reserves
Insurers should, in the first instance look to ensure that policyholders are aware of the need to notify claims as soon as possible, in accordance with their obligations under the policy of insurance. This will allow insurers to investigate matters at the earliest opportunity and drive claims forward, ultimately to a resolution.
Policyholders
Generally insurers may be more inclined to cash settle claims or aspects of the claims early where possible, to reduce the legal costs associated with cases running on for longer due to repair and reinstatement delays. In respect of recoveries, we often see that cash settled claims tend to struggle from an evidence perspective and lead to a more reduced recovery settlement, which insurers should bear in mind. In addition, insurers may in fact find that policyholders become more hesitant to agree cash settlements given the delays being experienced in the construction industry generally which could have a detrimental impact on the time it takes to carry out repairs to the property in question, and the general uncertainty surrounding the cost of those repairs.
Cash settlements
The end impact of the above for policyholders is higher insurance premiums and policy excesses. This can lead to issues of underinsurance, where insured policyholders are knowingly under-declaring the value of their property to avoid facing higher fees. Alternatively, a policyholder may risk simply not insuring their property in order to avoid paying any premium at all. And this is not simply a property-specific issue; across a number of areas, insurers are discussing underinsurance relating to single item limits, such as jewellery, watches and so on.
When looking at damaged property, it is often apparent that insured policyholders may have also unknowingly under-estimated the value of their property and not considered that the value is likely to have increased in line with inflation.
Issues such as underinsurance can lead to breaches of CIDRA and the Insurance Act, as well as indemnity issues and Financial Ombudsman complaints, adding further delay to the already extended time taken to settle property damage claims and further triggering claims inflation.
Underinsurance
What does this mean for Property Damage Insurers?
Get in touch
We can advise on reserving and have experience in pre-litigated and litigated claims, whether as subrogated recoveries or the defence of property damage claims, to get our clients the best settlement result. We have experience advising insurers on disputes relating to application of policy terms and cover and Financial Ombudsman Service complaints which might arise as a result.
Property fraud
Construction related losses
Subsidence
Escapes of water and flooding
Fires
Claims inflation in property damage claims is the result of an unprecedented series of global events over the last 24 months that it seems no insurer could have possibly ever predicted. Our team can assist with mitigating the impact of this where possible. The property damage team at Clyde & Co has experience dealing with a wide range of complex property liability claims, subrogated recoveries and advising on policy coverage disputes.
Typical claims dealt with by the team include, although are not restricted to, those resulting from:
How can we help?
A separate issue causing claims inflation is the number of insurance claims being made as a result of extreme weather events.
In 2022 alone, England faced three named storms within the space of one week which brought flooding and extreme winds causing damage to property such as to the roof of the Millennium Dome in London, and also an unprecedented extreme heatwave in July 2022 leading to fires. Weather-related property damage, including those arising from subsidence, will become far more common as we become further exposed to the impact of climate change globally over the next 10-20 years.
Extreme weather events
The impact of Climate Change
A separate issue causing claims inflation is the number of insurance claims being made as a result of extreme weather events.
In 2022 alone, England faced three named storms within the space of one week which brought flooding and extreme winds causing damage to property such as to the roof of the Millennium Dome in London, and also an unprecedented extreme heatwave in July 2022 leading to fires. Weather-related property damage, including those arising from subsidence, will become far more common as we become further exposed to the impact of climate change globally over the next 10-20 years.
Extreme weather events
The impact of Climate Change
In addition, insurers should look to review their reserves to ensure they accurately reflect the current likely cost of repair and reinstatement in the current inflated market.
Insured policyholders may wish to review their property and assets and ensure the current declared value is accurate, to prevent underinsurance issues. Similarly for companies whose properties may be damaged, policyholders may wish to check business interruption cover is adequate to cover for any period during which their property is unhabitable and work is halted as a result of this, particularly in light of increasing delays to undertake repairs.
Reserves
Get in touch
We can advise on reserving and have experience in pre-litigated and litigated claims, whether as subrogated recoveries or the defence of property damage claims, to get our clients the best settlement result. We have experience advising insurers on disputes relating to application of policy terms and cover and Financial Ombudsman Service complaints which might arise as a result.
Property fraud
Construction related losses
Subsidence
Escapes of water and flooding
Fires
Claims inflation in property damage claims is the result of an unprecedented series of global events over the last 24 months that it seems no insurer could have possibly ever predicted. Our team can assist with mitigating the impact of this where possible. The property damage team at Clyde & Co has experience dealing with a wide range of complex property liability claims, subrogated recoveries and advising on policy coverage disputes.
Typical claims dealt with by the team include, although are not restricted to, those resulting from:
How can we help?
Insurers should, in the first instance look to ensure that policyholders are aware of the need to notify claims as soon as possible, in accordance with their obligations under the policy of insurance. This will allow insurers to investigate matters at the earliest opportunity and drive claims forward, ultimately to a resolution.
Policyholders
Get in touch
We can advise on reserving and have experience in pre-litigated and litigated claims, whether as subrogated recoveries or the defence of property damage claims, to get our clients the best settlement result. We have experience advising insurers on disputes relating to application of policy terms and cover and Financial Ombudsman Service complaints which might arise as a result.
Property fraud
Construction related losses
Subsidence
Escapes of water and flooding
Fires
Claims inflation in property damage claims is the result of an unprecedented series of global events over the last 24 months that it seems no insurer could have possibly ever predicted. Our team can assist with mitigating the impact of this where possible. The property damage team at Clyde & Co has experience dealing with a wide range of complex property liability claims, subrogated recoveries and advising on policy coverage disputes.
Typical claims dealt with by the team include, although are not restricted to, those resulting from:
How can we help?
Generally insurers may be more inclined to cash settle claims or aspects of the claims early where possible, to reduce the legal costs associated with cases running on for longer due to repair and reinstatement delays. In respect of recoveries, we often see that cash settled claims tend to struggle from an evidence perspective and lead to a more reduced recovery settlement, which insurers should bear in mind. In addition, insurers may in fact find that policyholders become more hesitant to agree cash settlements given the delays being experienced in the construction industry generally which could have a detrimental impact on the time it takes to carry out repairs to the property in question, and the general uncertainty surrounding the cost of those repairs.
Cash settlements
Get in touch
We can advise on reserving and have experience in pre-litigated and litigated claims, whether as subrogated recoveries or the defence of property damage claims, to get our clients the best settlement result. We have experience advising insurers on disputes relating to application of policy terms and cover and Financial Ombudsman Service complaints which might arise as a result.
Property fraud
Construction related losses
Subsidence
Escapes of water and flooding
Fires
Claims inflation in property damage claims is the result of an unprecedented series of global events over the last 24 months that it seems no insurer could have possibly ever predicted. Our team can assist with mitigating the impact of this where possible. The property damage team at Clyde & Co has experience dealing with a wide range of complex property liability claims, subrogated recoveries and advising on policy coverage disputes.
Typical claims dealt with by the team include, although are not restricted to, those resulting from:
How can we help?
The end impact of the above for policyholders is higher insurance premiums and policy excesses. This can lead to issues of underinsurance, where insured policyholders are knowingly under-declaring the value of their property to avoid facing higher fees. Alternatively, a policyholder may risk simply not insuring their property in order to avoid paying any premium at all. And this is not simply a property-specific issue; across a number of areas, insurers are discussing underinsurance relating to single item limits, such as jewellery, watches and so on.
When looking at damaged property, it is often apparent that insured policyholders may have also unknowingly under-estimated the value of their property and not considered that the value is likely to have increased in line with inflation.
Issues such as underinsurance can lead to breaches of CIDRA and the Insurance Act, as well as indemnity issues and Financial Ombudsman complaints, adding further delay to the already extended time taken to settle property damage claims and further triggering claims inflation.
Underinsurance
What does this mean for Property Damage Insurers?
In addition, insurers should look to review their reserves to ensure they accurately reflect the current likely cost of repair and reinstatement in the current inflated market.
Insured policyholders may wish to review their property and assets and ensure the current declared value is accurate, to prevent underinsurance issues. Similarly for companies whose properties may be damaged, policyholders may wish to check business interruption cover is adequate to cover for any period during which their property is unhabitable and work is halted as a result of this, particularly in light of increasing delays to undertake repairs.
Reserves
Get in touch
We can advise on reserving and have experience in pre-litigated and litigated claims, whether as subrogated recoveries or the defence of property damage claims, to get our clients the best settlement result. We have experience advising insurers on disputes relating to application of policy terms and cover and Financial Ombudsman Service complaints which might arise as a result.
Property fraud
Construction related losses
Subsidence
Escapes of water and flooding
Fires
Claims inflation in property damage claims is the result of an unprecedented series of global events over the last 24 months that it seems no insurer could have possibly ever predicted. Our team can assist with mitigating the impact of this where possible. The property damage team at Clyde & Co has experience dealing with a wide range of complex property liability claims, subrogated recoveries and advising on policy coverage disputes.
Typical claims dealt with by the team include, although are not restricted to, those resulting from:
How can we help?
Insurers should, in the first instance look to ensure that policyholders are aware of the need to notify claims as soon as possible, in accordance with their obligations under the policy of insurance. This will allow insurers to investigate matters at the earliest opportunity and drive claims forward, ultimately to a resolution.
Policyholders
Get in touch
We can advise on reserving and have experience in pre-litigated and litigated claims, whether as subrogated recoveries or the defence of property damage claims, to get our clients the best settlement result. We have experience advising insurers on disputes relating to application of policy terms and cover and Financial Ombudsman Service complaints which might arise as a result.
Property fraud
Construction related losses
Subsidence
Escapes of water and flooding
Fires
Claims inflation in property damage claims is the result of an unprecedented series of global events over the last 24 months that it seems no insurer could have possibly ever predicted. Our team can assist with mitigating the impact of this where possible. The property damage team at Clyde & Co has experience dealing with a wide range of complex property liability claims, subrogated recoveries and advising on policy coverage disputes.
Typical claims dealt with by the team include, although are not restricted to, those resulting from:
How can we help?
Generally insurers may be more inclined to cash settle claims or aspects of the claims early where possible, to reduce the legal costs associated with cases running on for longer due to repair and reinstatement delays. In respect of recoveries, we often see that cash settled claims tend to struggle from an evidence perspective and lead to a more reduced recovery settlement, which insurers should bear in mind. In addition, insurers may in fact find that policyholders become more hesitant to agree cash settlements given the delays being experienced in the construction industry generally which could have a detrimental impact on the time it takes to carry out repairs to the property in question, and the general uncertainty surrounding the cost of those repairs.
Cash settlements
Get in touch
We can advise on reserving and have experience in pre-litigated and litigated claims, whether as subrogated recoveries or the defence of property damage claims, to get our clients the best settlement result. We have experience advising insurers on disputes relating to application of policy terms and cover and Financial Ombudsman Service complaints which might arise as a result.
Property fraud
Construction related losses
Subsidence
Escapes of water and flooding
Fires
Claims inflation in property damage claims is the result of an unprecedented series of global events over the last 24 months that it seems no insurer could have possibly ever predicted. Our team can assist with mitigating the impact of this where possible. The property damage team at Clyde & Co has experience dealing with a wide range of complex property liability claims, subrogated recoveries and advising on policy coverage disputes.
Typical claims dealt with by the team include, although are not restricted to, those resulting from:
How can we help?
The end impact of the above for policyholders is higher insurance premiums and policy excesses. This can lead to issues of underinsurance, where insured policyholders are knowingly under-declaring the value of their property to avoid facing higher fees. Alternatively, a policyholder may risk simply not insuring their property in order to avoid paying any premium at all. And this is not simply a property-specific issue; across a number of areas, insurers are discussing underinsurance relating to single item limits, such as jewellery, watches and so on.
When looking at damaged property, it is often apparent that insured policyholders may have also unknowingly under-estimated the value of their property and not considered that the value is likely to have increased in line with inflation.
Issues such as underinsurance can lead to breaches of CIDRA and the Insurance Act, as well as indemnity issues and Financial Ombudsman complaints, adding further delay to the already extended time taken to settle property damage claims and further triggering claims inflation.
Underinsurance
What does this mean for Property Damage Insurers?
Get in touch
We can advise on reserving and have experience in pre-litigated and litigated claims, whether as subrogated recoveries or the defence of property damage claims, to get our clients the best settlement result. We have experience advising insurers on disputes relating to application of policy terms and cover and FOS complaints which might arise as a result.
Property fraud
Construction related losses
Subsidence
Escapes of water and flooding
Fires
Claims inflation in property damage claims is the result of an unprecedented series of global events over the last 24 months that it seems no insurer could have possibly ever predicted. Our team can assist with mitigating the impact of this where possible. The property damage team at Clyde & Co has experience dealing with a wide range of complex property liability claims, subrogated recoveries and advising on policy coverage disputes.
Typical claims dealt with by the team include, although are not restricted to, those resulting from:
How can we help?
Get in touch
We can advise on reserving and have experience in pre-litigated and litigated claims, whether as subrogated recoveries or the defence of property damage claims, to get our clients the best settlement result. We have experience advising insurers on disputes relating to application of policy terms and cover and FOS complaints which might arise as a result.
Property fraud
Construction related losses
Subsidence
Escapes of water and flooding
Fires
Claims inflation in property damage claims is the result of an unprecedented series of global events over the last 24 months that it seems no insurer could have possibly ever predicted. Our team can assist with mitigating the impact of this where possible. The property damage team at Clyde & Co has experience dealing with a wide range of complex property liability claims, subrogated recoveries and advising on policy coverage disputes.
Typical claims dealt with by the team include, although are not restricted to, those resulting from:
How can we help?
Get in touch
We can advise on reserving and have experience in pre-litigated and litigated claims, whether as subrogated recoveries or the defence of property damage claims, to get our clients the best settlement result. We have experience advising insurers on disputes relating to application of policy terms and cover and FOS complaints which might arise as a result.
Property fraud
Construction related losses
Subsidence
Escapes of water and flooding
Fires
Claims inflation in property damage claims is the result of an unprecedented series of global events over the last 24 months that it seems no insurer could have possibly ever predicted. Our team can assist with mitigating the impact of this where possible. The property damage team at Clyde & Co has experience dealing with a wide range of complex property liability claims, subrogated recoveries and advising on policy coverage disputes.
Typical claims dealt with by the team include, although are not restricted to, those resulting from:
How can we help?
Get in touch
We can advise on reserving and have experience in pre-litigated and litigated claims, whether as subrogated recoveries or the defence of property damage claims, to get our clients the best settlement result. We have experience advising insurers on disputes relating to application of policy terms and cover and FOS complaints which might arise as a result.
Property fraud
Construction related losses
Subsidence
Escapes of water and flooding
Fires
Claims inflation in property damage claims is the result of an unprecedented series of global events over the last 24 months that it seems no insurer could have possibly ever predicted. Our team can assist with mitigating the impact of this where possible. The property damage team at Clyde & Co has experience dealing with a wide range of complex property liability claims, subrogated recoveries and advising on policy coverage disputes.
Typical claims dealt with by the team include, although are not restricted to, those resulting from:
How can we help?
A separate issue causing claims inflation is the number of insurance claims being made as a result of extreme weather events.
In 2022 alone, England faced three named storms within the space of one week which brought flooding and extreme winds causing damage to property such as to the roof of the Millennium Dome in London, and also an unprecedented extreme heatwave in July 2022 leading to fires. Weather-related property damage, including those arising from subsidence, will become far more common as we become further exposed to the impact of climate change globally over the next 10-20 years.
Extreme weather events
The impact of Climate Change
In addition, insurers should look to review their reserves to ensure they accurately reflect the current likely cost of repair and reinstatement in the current inflated market.
Insured policyholders may wish to review their property and assets and ensure the current declared value is accurate, to prevent underinsurance issues. Similarly for companies whose properties may be damaged, policyholders may wish to check business interruption cover is adequate to cover for any period during which their property is unhabitable and work is halted as a result of this, particularly in light of increasing delays to undertake repairs.
Reserves
Get in touch
We can advise on reserving and have experience in pre-litigated and litigated claims, whether as subrogated recoveries or the defence of property damage claims, to get our clients the best settlement result. We have experience advising insurers on disputes relating to application of policy terms and cover and Financial Ombudsman Service complaints which might arise as a result.
Property fraud
Construction related losses
Subsidence
Escapes of water and flooding
Fires
Claims inflation in property damage claims is the result of an unprecedented series of global events over the last 24 months that it seems no insurer could have possibly ever predicted. Our team can assist with mitigating the impact of this where possible. The property damage team at Clyde & Co has experience dealing with a wide range of complex property liability claims, subrogated recoveries and advising on policy coverage disputes.
Typical claims dealt with by the team include, although are not restricted to, those resulting from:
How can we help?
Insurers should, in the first instance look to ensure that policyholders are aware of the need to notify claims as soon as possible, in accordance with their obligations under the policy of insurance. This will allow insurers to investigate matters at the earliest opportunity and drive claims forward, ultimately to a resolution.
Policyholders
Get in touch
We can advise on reserving and have experience in pre-litigated and litigated claims, whether as subrogated recoveries or the defence of property damage claims, to get our clients the best settlement result. We have experience advising insurers on disputes relating to application of policy terms and cover and Financial Ombudsman Service complaints which might arise as a result.
Property fraud
Construction related losses
Subsidence
Escapes of water and flooding
Fires
Claims inflation in property damage claims is the result of an unprecedented series of global events over the last 24 months that it seems no insurer could have possibly ever predicted. Our team can assist with mitigating the impact of this where possible. The property damage team at Clyde & Co has experience dealing with a wide range of complex property liability claims, subrogated recoveries and advising on policy coverage disputes.
Typical claims dealt with by the team include, although are not restricted to, those resulting from:
How can we help?
Generally insurers may be more inclined to cash settle claims or aspects of the claims early where possible, to reduce the legal costs associated with cases running on for longer due to repair and reinstatement delays. In respect of recoveries, we often see that cash settled claims tend to struggle from an evidence perspective and lead to a more reduced recovery settlement, which insurers should bear in mind. In addition, insurers may in fact find that policyholders become more hesitant to agree cash settlements given the delays being experienced in the construction industry generally which could have a detrimental impact on the time it takes to carry out repairs to the property in question, and the general uncertainty surrounding the cost of those repairs.
Cash settlements
Get in touch
We can advise on reserving and have experience in pre-litigated and litigated claims, whether as subrogated recoveries or the defence of property damage claims, to get our clients the best settlement result. We have experience advising insurers on disputes relating to application of policy terms and cover and Financial Ombudsman Service complaints which might arise as a result.
Property fraud
Construction related losses
Subsidence
Escapes of water and flooding
Fires
Claims inflation in property damage claims is the result of an unprecedented series of global events over the last 24 months that it seems no insurer could have possibly ever predicted. Our team can assist with mitigating the impact of this where possible. The property damage team at Clyde & Co has experience dealing with a wide range of complex property liability claims, subrogated recoveries and advising on policy coverage disputes.
Typical claims dealt with by the team include, although are not restricted to, those resulting from:
How can we help?
The end impact of the above for policyholders is higher insurance premiums and policy excesses. This can lead to issues of underinsurance, where insured policyholders are knowingly under-declaring the value of their property to avoid facing higher fees. Alternatively, a policyholder may risk simply not insuring their property in order to avoid paying any premium at all. And this is not simply a property-specific issue; across a number of areas, insurers are discussing underinsurance relating to single item limits, such as jewellery, watches and so on.
When looking at damaged property, it is often apparent that insured policyholders may have also unknowingly under-estimated the value of their property and not considered that the value is likely to have increased in line with inflation.
Issues such as underinsurance can lead to breaches of CIDRA and the Insurance Act, as well as indemnity issues and Financial Ombudsman complaints, adding further delay to the already extended time taken to settle property damage claims and further triggering claims inflation.
Underinsurance
What does this mean for Property Damage Insurers?
A separate issue causing claims inflation is the number of insurance claims being made as a result of extreme weather events.
In 2022 alone, England faced three named storms within the space of one week which brought flooding and extreme winds causing damage to property such as to the roof of the Millennium Dome in London, and also an unprecedented extreme heatwave in July 2022 leading to fires. Weather-related property damage, including those arising from subsidence, will become far more common as we become further exposed to the impact of climate change globally over the next 10-20 years.
Extreme weather events
The impact of Climate Change
Get in touch
We can advise on reserving and have experience in pre-litigated and litigated claims, whether as subrogated recoveries or the defence of property damage claims, to get our clients the best settlement result. We have experience advising insurers on disputes relating to application of policy terms and cover and Financial Ombudsman Service complaints which might arise as a result.
Property fraud
Construction related losses
Subsidence
Escapes of water and flooding
Fires
Claims inflation in property damage claims is the result of an unprecedented series of global events over the last 24 months that it seems no insurer could have possibly ever predicted. Our team can assist with mitigating the impact of this where possible. The property damage team at Clyde & Co has experience dealing with a wide range of complex property liability claims, subrogated recoveries and advising on policy coverage disputes.
Typical claims dealt with by the team include, although are not restricted to, those resulting from:
How can we help?
Get in touch
We can advise on reserving and have experience in pre-litigated and litigated claims, whether as subrogated recoveries or the defence of property damage claims, to get our clients the best settlement result. We have experience advising insurers on disputes relating to application of policy terms and cover and Financial Ombudsman Service complaints which might arise as a result.
Property fraud
Construction related losses
Subsidence
Escapes of water and flooding
Fires
Claims inflation in property damage claims is the result of an unprecedented series of global events over the last 24 months that it seems no insurer could have possibly ever predicted. Our team can assist with mitigating the impact of this where possible. The property damage team at Clyde & Co has experience dealing with a wide range of complex property liability claims, subrogated recoveries and advising on policy coverage disputes.
Typical claims dealt with by the team include, although are not restricted to, those resulting from:
How can we help?
Get in touch
We can advise on reserving and have experience in pre-litigated and litigated claims, whether as subrogated recoveries or the defence of property damage claims, to get our clients the best settlement result. We have experience advising insurers on disputes relating to application of policy terms and cover and Financial Ombudsman Service complaints which might arise as a result.
Property fraud
Construction related losses
Subsidence
Escapes of water and flooding
Fires
Claims inflation in property damage claims is the result of an unprecedented series of global events over the last 24 months that it seems no insurer could have possibly ever predicted. Our team can assist with mitigating the impact of this where possible. The property damage team at Clyde & Co has experience dealing with a wide range of complex property liability claims, subrogated recoveries and advising on policy coverage disputes.
Typical claims dealt with by the team include, although are not restricted to, those resulting from:
How can we help?
Get in touch
We can advise on reserving and have experience in pre-litigated and litigated claims, whether as subrogated recoveries or the defence of property damage claims, to get our clients the best settlement result. We have experience advising insurers on disputes relating to application of policy terms and cover and FOS complaints which might arise as a result.
Property fraud
Construction related losses
Subsidence
Escapes of water and flooding
Fires
Claims inflation in property damage claims is the result of an unprecedented series of global events over the last 24 months that it seems no insurer could have possibly ever predicted. Our team can assist with mitigating the impact of this where possible. The property damage team at Clyde & Co has experience dealing with a wide range of complex property liability claims, subrogated recoveries and advising on policy coverage disputes.
Typical claims dealt with by the team include, although are not restricted to, those resulting from:
How can we help?