Cobra heatwave meeting highlights growing risk of building damage and property underinsurance exposure

The emergency Cobra meeting chaired by the Prime Minister in response to extreme heat in the UK has reinforced the severity of the risks facing the UK’s built environment and the potential for increased property damage and claims to reveal existing underinsurance. 

Cos Kamasho, principal consultant at BCIS, said the fact that extreme heat, drought and wildfires have prompted a Cobra meeting underlines how quickly these risks are becoming a serious resilience issue for livelihoods and the UK’s built environment. 

‘For insurers, the concern isn’t simply that extreme weather could result in more claims. It’s that those claims are occurring against a backdrop of higher rebuilding costs,’ he said.  

‘The ABI/BCIS House Rebuilding Cost Index has risen by 40% in the five years to July 2026, while the average subsidence claim reached a record £20,000 in the second quarter of this year. 

‘Prolonged dry conditions increase the threat of subsidence, particularly for properties built on clay soils, while the scale of wildfires we are now seeing introduces another potentially significant source of property damage. Heavy rainfall following drought can bring its own problems through surface flooding and rapid run-off. At the same time, dry ground and soil movement can put additional strain on infrastructure, as illustrated by the recent Thames Water mains burst.  

‘This combination of more frequent extreme-weather events and higher reinstatement costs increases the risk that existing underinsurance is exposed when a claim is made. 

‘That makes it increasingly important for insurers, brokers and policyholders to understand what buildings would actually cost to reinstate today. Sums insured need to keep pace with changing construction costs and the specific cost components of individual properties, rather than relying indefinitely on historic values or routine indexation.’ 

More than two-thirds of England and all of Wales are now in drought following five heatwaves this summer, with the UK on track for its hottest summer on record. 

The severity of the conditions was underlined on 13 August when temperatures reached 38.1 degrees at Kew Gardens, the highest recorded in the UK so far this year and the fifth hottest on record⁽¹⁾.  

Wildfire activity has also intensified. According to the National Fire Chiefs Council⁽²⁾, firefighters responded to 966 wildfires across England and Wales between 1 January and 10 August 2026.  

At the same time, the latest annual update to BCIS’s residential rebuild cost models revealed an average 4.9% increase in rebuild costs for houses and flats in the year to January 2026. This was up from a 3.8% increase recorded between 2024 and 2025.  

The combination of a greater risk of weather-related property damage and elevated reinstatement costs makes robust sums insured increasingly important.  

Underinsurance may only become apparent when a policyholder needs to make a claim, potentially leaving a shortfall between the level of cover and the actual cost of reinstating the property. One of the best safeguards is to review reinstatement costs regularly and ensure sums insured are adjusted appropriately to reflect current rebuilding costs.

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^{(1) – Met Office – Latest heatwave peaks… – here}

^{(2) – NFCC – Fire Chiefs warn of sustained wildfire pressures… – here}