Forbes: extreme heat hits insurance markets

Forbes reported on August 6 that extreme heat and wildfire risk are spilling beyond repair bills and into the systems that insure and finance homes, as lenders, insurers and homeowners confront rising climate-related losses. The report said the pressure is showing up in both U.S. wildfire markets and in Britain, where hotter, drier conditions have been linked to subsidence damage. Separate reporting by The Independent and Stateline described how that stress is reaching individual households and state insurance officials. The immediate issue is not a single national policy change. The issue, according to the reports, is that repeated heat and fire losses are making coverage less predictable, pushing up claims costs and raising new questions for property markets that depend on insurance to keep homes saleable and mortgages viable. ### How is heat showing up as an insurance problem inside a single house? (forbes.com) The Independent reported on August 6 that Kaye Brown, a retired mortgage adviser in Lincolnshire, said heatwaves last summer opened cracks in the concrete floor of her garage and later in brickwork at her four-bedroom home. Brown told the newspaper the damage left the £500,000 property effectively unsellable while the problem is assessed. (forbes.com) Brown said her insurer had stepped in and ordered checks on foundations, drains and soil conditions. The Independent said the couple are waiting for the results of a year-long test measuring how much the property has moved before repairs can begin. ### How big are the UK subsidence numbers? The Association of British Insurers said home insurers paid out £72 million for domestic subsidence claims in the second quarter of 2026, and the average subsidence claim reached a record £20,000. (independent.co.uk) The ABI said the average payout was more than £2,000 higher than in the same period a year earlier. The Met Office said on June 1 that spring 2026 was the warmest on record for England and Wales, and June 2026 was later recorded as England’s warmest June on record. (independent.co.uk) Those conditions have been cited in British reporting as part of the backdrop for rising subsidence risk, particularly where dry ground can shift beneath foundations. (abi.org.uk) ### What does wildfire have to do with mortgage and insurance markets? Stateline reported on August 5 that the Spokane wildfire in Washington destroyed roughly 700 homes and forced 60,000 residents to evacuate after the fire jumped the Spokane River on Aug. 1. The outlet said officials and consumer advocates fear the losses could lead to higher rates or policy cancellations in a state where the property insurance market had recently been stabilizing. (metoffice.gov.uk) David Forte, senior property and casualty policy adviser with the Washington State Office of the Insurance Commissioner, told Stateline that the market had been “heading totally in the right direction” before the fire. Stateline reported that Washington’s FAIR Plan, the state’s insurer of last resort, had plateaued at roughly 400 policies over the past three quarters before the Spokane losses introduced new uncertainty. (stateline.org) ### Why does that matter for homeowners trying to buy or sell? Forbes reported that climate exposure is becoming a housing-finance issue, not only a repair issue, because insurance availability and cost affect whether homes can be financed and protected. In practice, a property that cannot be insured on workable terms can become harder to sell, refinance or value, as Brown’s account in Britain illustrates. (stateline.org) Washington regulators said they are now seeking loss data from insurers to gauge the scope of damage and claims from the Spokane fire. In Britain, Brown told The Independent she is waiting for the results of long-term movement testing before repairs begin, while ABI data offers the next benchmark for whether subsidence claims keep rising through the hotter months. (stateline.org) (forbes.com)