Buildings insurance for property with minor subsidence history

subsidence-newbie

We're in the process of buying a house. Just before they accepted our offer, the vendors revealed that the previous owner had made a claim for subsidence on the property in the late 1990s. They said that they'd had no problem insuring the property and on this basis we agreed to continue with the purchase.

Fairly soon after that they supplied us with the details of their insurance policy which did indeed cover them for subsidence with an excess of £1000 and a premium that didn't sound excessive.

What we had not realised was that when they purchased the property, they did not take over the original policy against which the claim was made (which in hindsight seems rather foolish). As we understand it, if they had taken over the original policy, the insurer would have had an obligation to continue to provide them with insurance cover. But given they did not do this, presumably it's possible that it may become difficult to insure the property?

They've also supplied us with fairly extensive documentation of the subsidence claim. It looks as if the movement was fairly minor and the claim was resolved with the removal of a neighbours tree and the repair of a drain. The cracks were monitored over a period of some months and then the insurer agreed that the movement had stabilised and paid for the affected internal areas to be redecorated. As far as we can tell no underpinning was deemed necessary, although the documentation is not exhaustive and does not include a Certificate of Structural Adequacy.

We have had a full buildings survey done and told the surveyor about the prior subsidence claim. The surveyor saw no evidence of any current or recent movement. Here are the relevant paragraphs :-

> The main external walls appear to be of solid construction between approx 240 mm total thickness. They are considered to be in a satisfactory structural condition as they generally appear relatively plumb, straight and level but there are a number of filled cracks visible. Bearing in mind a past insurance claim for subsidence the movement must have been relatively slight as there is little evidence to see of any past movement.

> Confirmation should be obtained that the insurance claim regarding past subsidence has been signed off and all repairs carried out.

> The property is considered to be in satisfactory structural condition but as previously mentioned there is some cracking which has been filled to the front bay. This appears to be only minor but we believe relates to the previous insurance claim regarding subsidence caused by clay subsoils and the effect of nearby tree and leaking drain. We saw no evidence of any current or recent movement in these areas and would expect no further significant movement to occur. However, it must be confirmed prior to legal commitment to purchase that the insurance recommended works were carried out and signed off as these were underground issues which we cannot see from above ground level. However, where visible there are no current issues.

We've been told that we cannot take over the vendors' existing insurance policy, although since it's not the original policy against which the claim was made, there doesn't appear to be any benefit to doing this anyway. We have, however, been able to obtain quotes from a number of insurers, albeit with higher subsidence excess (the lowest is £2500) and with some requiring additional conditions/checks to be made.

My question is would we be crazy to continue with the purchase? We're reasonably satisfied that the previous subsidence was relatively minor and is unlikely to recur. What is more troubling is that it's not clear that it's always going to be straightforward to obtain insurance cover in the years ahead. Also if we were to want to sell the house in the future, would other buyers be put off purchasing the property, because of the subsidence history?

Would it help to get hold of a copy of the Certificate of Structural Adequacy? And is it likely we could obtain this from the original insurer? Is there anything else we can do to mitigate the risks of not being able to obtain insurance, or are we worrying about nothing?

cattie

I hope it puts your mind at rest if I tell you that I purchased a property that had previously had remedial work due to tree and shrub roots.

Vendors had full details of works carried out plus certificate of structural adequacy and letter from insurance co. saying as long as any future purchaser kept to same company, they would be happy to continue to offer insurance on the property.

Vendors insurance co. just happened to be the same one I'd been with for many years so I gave them a call & they assured me insurance would still be offered and gave me a rough idea of what the cost would be to me. This was about the same I was paying on my then house. No mention was made about having to carry on with existing policy and when I did go on to buy the house, a new policy was issued to me, giving me no claim discounts I'd accrued over the years.

I don't know if it would be worth you contacting the original insurer to see if they would be happy to insure again, if you haven't done so already. It does seem once you move away from insurer who handled original claim that it becomes harder and more costly to get the building insured.

Like you I had a structural survey carried out before proceeding, asking surveyor to pay particular attention to any detail regarding the past remedial work and he gave it a clean bill of health.

What you do have to think about if you go ahead that it will affect the ease of resale in the future and very likely the price.Some buyers will run a mile at the merest hint of structural work previously done. Others, if they love the house enough and the price is right will have no qualms once they know the buildings insurance is available and isn't a ridiculously high amount.

When purchasing such a property, a solicitor will want to see all available paperwork, including certificate of structural adequacy, as part of the purchasing process.

Me, would I still want to buy this house? Only If I saw it as my final resting place then I would probably go for it. But in the current market where buyers are harder to find, no I wouldn't. In a more buoyant market, it seems to matter less to buyers as they tend to think more with their hearts when properties are being snapped up pretty quickly.

G_M

The reality is that in standard insurance applications (internet comparison sites etc) there is no such thing as 'minor' subsidence. There is a standard question "has property ever suffered from...") to which you can answer "yes" and get declined, or "no" and risk invalidating the insurance for fraud.

So your insurance will always have to come via specialist brokers, specialist insurers and /or insurers you go direct ot with all the facts and get specialised (more expensive) quotes.

However given the circumstances I believe you would be able to do the above. So whether you proceed and buy depends how much you like the proprty and how much extra insurance cost you are willing to commit to.

Also try posting on the insurance forum.

subsidence-newbie

Thanks, cattie, for your reply. Just to be clear, although we did have a full buildings survey carried out, we have *not* had a structural engineer's survey done. Also unlike you, we do *not* have a copy of the Certificate of Structural Adequacy.