Soil contraction due to less rainfall causing subsidence damage to structures.
The lack of soil moisture within reactive clay soils is the trigger for major soil movement and cracking. Lower-level suction can lead to clay soils drawing moisture away from the surface soils during drought. Some vegetation can also play a role in removing soil moisture. Soil shrinking and swelling can lead to extensive damage of assets if the foundations also move. Buildings on light strip footings or unstiffened slabs are vulnerable to soil movement, causing walls and ceilings to crack as the foundations move.
The Climate Risk Engines account for soil movement due to drought using annual precipitation records. Soil movement due to drought can be widespread however it is rarely catastrophic and can be remedied if addressed promptly – typical repaid costs are less than 5% of the property replacement value.
Note that this hazard is not the same as vegetation driven subsidence in seasonal drought, which is associated with tree roots beneath residential builds extracting water during a hot and dry summer.