Help! advice on possible Subsidence/Buildings Insurance

Sandgr0under

Unfortunately, through my own ignorance I've found myself in a very frustrating and difficult situation regarding my Buildings Insurance policy, and wander if anyone out there can offer some advice or options...

Background:
I purchased my house with my partner in 2003, in which I recall everything was fine with regards to the survey and buildings insurance. We had a quick but messy split a couple of years later and in Jan 2006 and I took on the property, changing mortgage companies.

I can give more details if needed, but after researching the symptoms, I believe that there has been (or is ongoing) movement on one side of the property. I had a mains water leak in my back yard in 2007, which I would guess that this may be the cause of this movement. (The house is built on a slope and the movement of water would travel under the affected part of the house). Obviously an expert would have to confirm if this is the case.

"Surely your insurance would cover it?".. Thats what I thought, after looking further into these symptoms, I dug out my most recent survey (a valuation from a surveyor in Jan 2006) ready to start a claim, and my stomach sank when I read: "The property has been affected by slight structural movement in the past, evidenced by general distortion, particularly around the window and door openings. It is considered that the movement is long-standing in nature and that the risk of further movement taking place is acceptable". In addition to that, I felt sink when I saw that a "Any signs of Structural Movement/Subsidence etc." box had been ticked.

Naturally, I'm kicking myself for my naivety and ignorance. In all honesty, at that time, I was just relieved to have the mortgage approved and couldn't of fully absorbed or realise the possible impact of this information. When I've changed insurers, I'd just carried on and renewed each year, just assuming everything was ok, until I realised this (Big mistake!).

I've never tried claiming on insurance before and have no idea how it all works, but the questions and thoughts that are swimming around my head now are these:

* Is there a possibilty I could still be covered if it the cause is proven to be a result of the water leak, not general subsidence or movement.

* If I went ahead with a claim, a copy of this valuation/survey is bound to surface and void it. Once this happened, would the insurance company see this as attempted Fraud rather than naivety?

* Would it be worth paying a professional to assess the situation before contacting the insurance company. If I could afford to deal with it myself, deal with it then get a new policy.

As a student, I dont have much money and I am unable to get any credit due to a poor rating as a result of the split... but could humbly raise approx £3000..

I'm wary that this situation could potentially finish me off , so, I'm open to any other options, suggestions or advice...

huckster

Stop panicking. You might not have too much to worry about. I have seen thousands of surveys over the years, to assist in deciding whether to accept cover or not and for other purposes. It is not unusual to have some form of movement in a property.

If there was a subsidence issue, the surveyor would have made a particular note of this. This would have caused you an issue getting the mortgage. So you have not given any false information to an Insurer. Insurers generally ask about subsidence, ground heave or landslip. From what you have said the report you have does not mention this. But check to see what questions you answered when arranging the policy, to see whether you think you have given incorrect information to Insurers.

What I would suggest that you do, is obtain a structural engineers report and do not contact your Insurers unless you have to. Once you have a subsidence claim noted on Insurance databases, you will have to disclose this and it will complicate Insurance arrangements. Under your Insurance you will have a subsidence excess of probably £1000, so getting a structural report which will cost £500 ish, would be something you would have to do anyway. If the report states that there is a need to make an Insurance claim or that monitoring will need to take place that could end up with a claim, you should inform your Insurers straight away. Once they are in receipt of your structural report, they will advise you how to progress the claim.

If you ask me what your Insurers would say if you mentioned previous movement noted in a report you had a few years back, I can't answer that. They will probably ask to see the report and take it from there. I have not come across Insurers using such movement in a report to decline a claim, when the report did not confirm a subsidence issue. But Insurers are increasingly looking to decline claims, so they might be akward.

FlameCloud

All buildings will have signs of historic movement as they settle into the made ground of the foundations. This is nothing to worry about normally, and is not subsidence.

What type of soil do you have in the area? If it is clay, it is invariably a problem with tree roots rather than a drainage issue.

Sandgr0under

Wow! thanks for the re-assuring replies!

Flamecloud: I have no garden, (terraced houses with concreted/flagged yards) so cannot physically check. I'm in South Devon, and apparently there are clay pits around etc. Its been very hard to find any info online, and the records of the valuation survey and conveyancing never mentioned what the house is built on. There are no trees in the immediate area so I can discount that, but if it is built on clay, I guess a structural survey will tell if the water leak has caused this further movement.

Huckster: Thanks for your in depth reply, much appreciated! Regarding the survey and insurance documents, I'll describe as best as I can, or if you prefer, I could scan and email you copies:

The Mortgage Valuation Survey states:

* Does this property need to be referred due to special insurance risks?: (if "Yes" refer to the comments section): "No" (The comments section did mention the "slight structural movement in the past").

* Has the property ever been affected by structural movement caused by subsidence, settlement, landslip or heave?: "Yes" (Is the risk one the mortgage company can accept? "Yes")


The original Insurance Certificate (04/2008) states:

* Is the property free from any signs of damage due to subsidence, landslip, or heave, and are neighbouring properties free from signs of damage by these causes?: I've ticked "Yes" (there were no signs of damage).

Now, something happened within the insurance company, (underwriters I think) and the cover changed to "House Guard Extra" when it automatically renewed. The latest Certificate (May 2011) states:

General Section: Is the building free from and in an area normally free from subsidence, heave, landslip or flooding? Box is marked as "Yes"

Buildings Section: In respect of subsidence, ground heave or landslip:

i) has the property ever suffered damage from any of these causes?

ii) are there any signs of cracking or damage to the property, either internal or external, which may be attributable to these causes?

iii) has any remedial work or any monitoring been carried out to actual or suspected damage from these causes?

iv) has any survey report been made referring to settlement, movement or structural defect or previous structural repairs?

All the above have been automatically ticked as "No".

The most up to date certificate asks much more specific questions, and for ii and iv, I would certainly say they now have incorrect information, which is why I'm now afraid that the insurance will become void if I claim. Digging out and cross referencing this information too late is the reason I'm kicking myself!

I'll have enough cash for a structural survey in 4-6 weeks time, so will get one done then, in the meantime, is it worth writing to the insurance company regarding updating ii) and iv), along with a copy of the 2006 survey, and ask them to review and update the policy? Is there is a real risk that they'll discontinue the cover?

Thanks again

huckster

"* Does this property need to be referred due to special insurance risks?: (if "Yes" refer to the comments section): "No" (The comments section did mention the "slight structural movement in the past").

* Has the property ever been affected by structural movement caused by subsidence, settlement, landslip or heave?: "Yes" (Is the risk one the mortgage company can accept? "Yes")"

Remember that these valuation reports are pretty standard. They are not a full survey. The surveyor has looked at the property and has said that there were no specific Insurance risk. So you have a right to rely on this, as saying there is no issue to advise Insurers of.

In regard to the second question, the surveyor is saying that they noticed some movement, but if they actually thought it was subsidence, ground heave or landslip, they would have made a specific comment about this. The first question regarding specific Insurance risks would have been changed to yes and you may not have been given the mortgage.

In regard to Insurers changing the policy and questions/answers on their documents, my opinion is that the information at the time of taking out the policy is most relevant. At the time of taking out the policy, you were not aware of any subsidence, ground heave or landslip issues.

I would suggest that you don't stitch yourself up by pleading guilty and making Insurers think they have reason to cancel your policy. Just obtain a structural engineers report when you can and depending on what it says, contact the Insurers. Then just follow the claim process.

If you start flapping and sending in the old survey now suggesting you have done anything wrong, I think you might come to regret it. As far as I can see, you did not do anything wrong at the time you arranged the policy.

Sandgr0under

Thanks Huckster, its been very easy to get worried over this.

I'll certainly take your advice and get a report as soon as I can. I'll update the thread and let you know how I get on.

Thanks again

nikki1520

I'd certainly be taking the view (if your insurers bring it up) that you filled out the initial form correctly - it was their automated process that changed all the answers on renewal - you had told them the information, and it's reasonable to expect them to use this information on renewal

Sandgr0under

Thats a true point thanks Nikki