HOME INSURANCE SUBSIDENCE & UNDERPINNING

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1 HOME INSURANCE SUBSIDENCE & UNDERPINNING

2 INTRODUCTION If your home (or a property you are looking to buy) has previously been affected by subsidence you may be finding it difficult to obtain home insurance. Banks and building societies require buildings insurance, including subsidence cover, to be in place in order to maintain or provide a mortgage. You may be in breach of your mortgage arrangement if you do not have buildings insurance which includes subsidence cover. You might have already experienced mainstream insurers refusing to insure properties that have been underpinned or have shown signs of movement. In this case you will need to use a specialist insurer. Insuring a property with previous subsidence issues in the correct way can assist in; Obtaining a mortgage to complete the purchase of your home Maintaining your existing mortgage Selling your home Protecting you financially in the event of a claim If you do not arrange home insurance on a correct basis, including subsidence cover, your options will be limited. CONSEQUENCES OF NOT HAVING SUBSIDENCE COVER You may not be able to obtain a mortgage or you may find that your current mortgage provider refuses to continue with the arrangement. Moreover, if you don t have subsidence cover within your buildings insurance policy the financial impact on you as the homeowner could be huge.

3 WHAT YOU NEED TO DO The first thing you need to know is the importance of informing your insurance company of any past subsidence issues relating to a home you want them to insure. If you do not do this, you will only add to problems in the future if you need to make a claim, whether this is for subsidence or any other type of claim. IT S NOT ALWAYS SUBSIDENCE You should also be aware that buildings can sometimes show small cracks which could be due to normal settlement of the home, especially new builds. This should be no cause for concern and can be dealt with through some minor repairs. Historic settlement, which may have occurred many years ago, can often be present in older or listed buildings and again this should not necessarily put you off buying the home you want. In these less serious cases, a simple filling of any cracks followed by re-decoration work can suffice. WHAT IS SUBSIDENCE? Put simply, it is the downward movement of the site on which a building stands. WHAT WILL IT COST ME IN THE EVENT OF A CLAIM? All insurance policies will ask you to pay the first 1,000 of any subsidence claim but this may be increased, depending upon individual circumstances. OPTIONS FOR YOU AS THE HOMEOWNER If you own your property outright an option is to insure your home in the conventional way but to exclude cover for subsidence if you feel that the risk is worth taking. You cannot buy an insurance policy to cover subsidence only. At the same time, it will also be very unlikely that an insurer will provide cover for a home known to have a problem where no remedial work has been carried out to address it. It is possible to obtain Home insurance including subsidence cover from specialist insurers when you have struggled to find it elsewhere. It may be a case of supplying further information, an increased subsidence excess (which is explained below) or excluding cover for the previous problem should it occur again (which is unlikely). More importantly, it can be very costly to remedy. The 3 main causes of subsidence: Trees being too near your home Leaking underground drains Geographical location and soil conditions around your home.

4 WHAT IS UNDERPINING? Underpinning is the most common method of repairing a home which has suffered from subsidence. Specialists will excavate around the affected areas of the home and pour copious amounts of concrete in order to stabilise the foundations. BUYING A HOME WITH A HISTORY OF SUBSIDENCE If you are looking to purchase a home with a history of subsidence or that has previously been underpinned, you need to ask some probing questions. Ask the vendor or their solicitor to supply you with as much information to help you decide whether to purchase the property or not. Buying a property is the biggest investment most people ever make, so it is important to gather all the information available. You should ask the following questions: The date subsidence occurred? The cause of the problem? How was it fixed? Does the vendor have any documentary evidence such as a certificate of structural adequacy? Is there a guarantee for the work done? The total cost of the repairs?

5 THE BENEFITS OF A SURVEY For total peace of mind you may wish to go one step further and arrange a full structural survey. While this is could be expensive a full structural survey will give you a far more in-depth investigation than a straightforward homebuyer s report and may prove invaluable. This will also act as an up to date report which is very useful to insurers and can often make the difference between them offering subsidence cover or not. Moreover, this information can also provide a guide as to whether to buy the property or not. CONCLUSION Home insurance including subsidence cover is a vital means of covering one of the biggest investments you will ever make. It is imperative that you have the correct level of cover in place to ensure you are not left out of pocket in the event of a claim. If you are unable to source insurance that adequately covers your home or a property you are looking to buy please contact us for further details. We can help organise a policy that is tailor made to your requirements.

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