Underground Climate Change and Subsidence: The Coverage Gap Beneath Your Foundation

When most people think about climate change, they think about what is happening above ground — rising temperatures, intensifying storms, rising sea levels, worsening wildfires. But there is another dimension of climate change that is happening silently, invisibly, and directly beneath the foundations of millions of homes across the country. Scientists call it “underground climate change,” and its implications for homeowners and their insurance coverage are profound.

Underground climate change refers to the gradual warming of subsurface soils and rock formations as heat from the surface — amplified by rising air temperatures, urban heat islands, and changing precipitation patterns — penetrates downward into the ground. This warming changes the physical properties of the soil beneath buildings, causing it to shrink, shift, and settle in ways that can damage foundations, crack walls, and compromise the structural integrity of homes.

The insurance implications are significant. Foundation damage from soil movement is typically excluded under standard homeowner policies through the earth movement exclusion. But underground climate change raises questions that the insurance industry has not yet answered — questions about causation, foreseeability, and whether exclusions drafted decades ago should apply to a phenomenon that did not exist when those exclusions were written.

What Is Underground Climate Change?

The concept is straightforward but its consequences are not. As surface temperatures rise — particularly in urban areas where buildings, pavement, and infrastructure absorb and radiate heat — that thermal energy does not stop at ground level. It conducts downward into the soil, gradually raising subsurface temperatures. Research published by Northwestern University engineer Alessandro Rotta Loria and his colleagues has documented this phenomenon extensively, measuring significant temperature increases in the soil beneath urban areas.

The key insight from this research is that warming soil behaves differently than stable-temperature soil. When certain soil types — particularly clay-rich soils — warm and dry out, they shrink. When they cool and absorb moisture, they expand. This cycle of expansion and contraction creates differential movement beneath foundations: some areas of soil shift more than others, creating uneven support for the structure above.

Unlike a sudden earthquake or landslide, underground climate change operates gradually. The soil shifts millimeters at a time. Cracks in foundations develop over months or years. By the time a homeowner notices the damage — doors that no longer close properly, cracks in drywall, uneven floors, gaps around window frames — the underlying soil movement may have been progressing for a long time.

How Underground Climate Change Differs from Traditional Subsidence

Traditional subsidence — the sinking or settling of ground — has been understood for centuries. It typically results from identifiable causes: mining activity that removes underground support, withdrawal of groundwater that allows soil to compact, natural dissolution of limestone that creates sinkholes, or poor compaction of fill soil during construction.

Underground climate change is fundamentally different in several important respects:

• It is not localized.Traditional subsidence tends to affect specific areas with identifiable geological or human-caused vulnerabilities. Underground climate change affects any area where subsurface temperatures are rising and soil conditions are susceptible to thermal changes — which includes most urban and suburban environments.
• It is gradual and cumulative.A sinkhole appears suddenly. A landslide happens in minutes. Underground climate change operates over years and decades, making it difficult to identify the precise onset of damage — a fact that creates enormous complications for insurance coverage triggers.
• It is driven by atmospheric change, not geological activity.Traditional earth movement exclusions in insurance policies were drafted to address geological events — earthquakes, landslides, mudflows, volcanic eruptions, sinkholes. Underground climate change is an atmospheric and thermal phenomenon that manifests in the soil. Whether it fits neatly within existing exclusion language is an open question.
• It interacts with existing soil vulnerabilities.Expansive clay soils that have coexisted with foundations for decades may begin behaving differently as subsurface temperatures change. A foundation built on soil that was stable at historic temperature ranges may become vulnerable as those temperature ranges shift. The cause is not the soil type — it is the change in conditions affecting that soil.

The Earth Movement Exclusion Problem

Standard homeowner insurance policies contain an earth movement exclusion that eliminates coverage for damage caused by “earthquake including land shock waves or tremors before, during, or after a volcanic eruption; landslide; mudflow; mudslide; subsidence; sinking, rising, or shifting of earth; and earth sinking, rising, or shifting including the land on which the dwelling or other structures are located.”

This exclusion is broad, and insurers have historically applied it aggressively to deny claims involving any form of ground movement or settlement. When a foundation cracks because the soil beneath it has shifted, most carriers will point to the earth movement exclusion regardless of the cause of the soil movement.

The legal question is whether “subsidence” and “sinking, rising, or shifting of earth” encompass soil changes caused by atmospheric warming — a phenomenon entirely distinct from the geological events the exclusion was designed to address. Under the principle that ambiguous policy language must be construed in favor of the insured, there is an argument that the earth movement exclusion should not apply to damage caused by underground climate change. The exclusion was intended to address natural geological hazards and catastrophic earth events, not gradual thermal degradation of soil caused by human-driven climate change.

In California, the contra proferentem rule requires ambiguous insurance policy language to be interpreted in the way the insured would reasonably understand it. A reasonable policyholder purchasing a homeowner policy would not understand the “earth movement” exclusion to encompass damage caused by global temperature changes affecting subsurface soil conditions. The exclusion evokes earthquakes and landslides — not the gradual warming of the ground beneath a suburban home.

The Emerging Science

The scientific research underpinning the concept of underground climate change is still developing, but several key findings have emerged:

• Subsurface temperatures are rising measurably.Research teams have installed temperature sensors at various depths beneath urban areas and documented temperature increases of several degrees Celsius compared to historical baselines. The warming is not uniform — it is concentrated beneath buildings, paved surfaces, and infrastructure that generate or absorb heat.
• Soil deformation is measurable.The same research teams have documented measurable soil deformation — both expansion and contraction — correlated with subsurface temperature changes. The deformations are small in absolute terms but significant relative to the tolerances of building foundations.
• Clay-rich soils are most vulnerable. Soils with high clay content are particularly susceptible to thermal changes because clay minerals expand when they absorb water and contract when they dry out. Temperature changes affect moisture dynamics in the soil, amplifying the expansion-contraction cycle that damages foundations.
• The problem will intensify. As surface temperatures continue to rise, subsurface warming will continue and accelerate. The research suggests that the structural impacts observed to date represent the early stages of a long-term trend, not a one-time adjustment.

Northwestern University’s research, published in the journal Communications Engineering, represents some of the most detailed work on this subject to date. The findings have significant implications for urban infrastructure, residential construction, and — inevitably — insurance coverage.

Potential Coverage Arguments for Policyholders

While no court has yet squarely addressed the coverage implications of underground climate change, several established principles of insurance coverage law may provide a framework for policyholder arguments:

The Efficient Proximate Cause Doctrine

In California, the efficient proximate cause doctrine provides that when a loss results from a chain of causation involving both covered and excluded perils, coverage depends on the nature of the efficient proximate cause — the predominant cause that set the chain in motion. If the efficient proximate cause of foundation damage is atmospheric warming (not excluded) that causes soil changes (potentially excluded), the analysis turns on which peril is the predominant cause. This is a fact-intensive inquiry that favors the policyholder in many scenarios.

Ambiguity in the Exclusion Language

As noted above, the earth movement exclusion was drafted to address specific geological hazards. If the exclusion language is ambiguous as applied to thermally-induced soil changes, California law requires that ambiguity to be resolved in the policyholder’s favor. The insurer bears the burden of proving that an exclusion applies, and any doubt about the scope of the exclusion runs against the insurer.

The Reasonable Expectations Doctrine

Under California law, insurance policies must be interpreted according to the reasonable expectations of the insured. A homeowner purchasing a standard policy would reasonably expect the earth movement exclusion to apply to earthquakes, landslides, and sinkholes — not to gradual thermal changes in soil caused by global warming. If the insurer intended to exclude this type of loss, it had the opportunity to draft specific exclusion language addressing it. The absence of such language supports coverage.

Ensuing Loss Provisions

Many homeowner policies contain an “ensuing loss” provision within the earth movement exclusion, which provides that if earth movement causes a subsequent, otherwise-covered loss — such as a water leak from a cracked pipe — the ensuing loss is covered even though the earth movement itself is not. This provision can be significant in underground climate change scenarios where foundation movement causes secondary damage to plumbing, HVAC systems, or other building components.

What Policyholders Should Know

• Do not assume foundation damage is uninsured.The earth movement exclusion is not absolute. Depending on the cause of the soil movement, the specific policy language, and the jurisdiction, coverage arguments may be available. Policyholders should file a claim and let the insurer make its coverage determination — then challenge that determination if it is incorrect.
• Get a geotechnical assessment. Understanding the cause of foundation damage requires expert analysis. A geotechnical engineer can evaluate soil conditions, identify the cause of movement, and provide an opinion on whether the damage results from traditional geological activity or from changing thermal and moisture conditions in the soil. This assessment is critical for any coverage dispute.
• Document the damage thoroughly. Photograph and video all visible damage. Measure and record cracks, floor slopes, and door/window misalignment over time. This documentation establishes the timeline and progression of damage, which is important for causation arguments.
• Review the policy carefully.Not all earth movement exclusions are identical. Some are broader, some are narrower, and the presence or absence of an ensuing loss provision can be decisive. Policyholders should review their specific policy language — or have an attorney or public adjuster review it — before accepting a coverage denial.
• Consider separate earthquake insurance. In California, the California Earthquake Authority (CEA) offers earthquake insurance as a separate policy. While earthquake insurance addresses seismic events rather than climate-related subsidence, policyholders in high-risk areas should evaluate whether supplemental coverage is available for foundation damage from any cause.

Sources & Further Reading

• Policyholder-side coverage commentary — published analyses by national policyholder-side practitioners on underground climate change as an emerging insurance coverage issue, including the application of earth-movement exclusions to climate-related subsidence
• Alessandro Rotta Loria et al., Northwestern University — research on subsurface temperature changes beneath urban areas and their effects on soil deformation and building foundations, published in Communications Engineering (2023)
• California Insurance Code § 530 et seq. (general provisions regarding property insurance and the duty to indemnify)
• California Civil Code § 1636 et seq. (rules of contract interpretation applicable to insurance policies, including contra proferentem)
• California Earthquake Authority — information on earthquake insurance and supplemental coverage options (earthquakeauthority.com)

Related Reading

• Understanding Insurance Policy Exclusions
• The Efficient Proximate Cause Doctrine
• Foundation Damage Insurance Claims
• Earthquake Insurance in California
• Insurance Coverage Disputes
• How Insurance Policies Are Interpreted