House insurance - the past subsidence trap

rs65

I wasn’t aware that there was any legal obligation for any insurer to guarantee to continue subsidence cover for the policyholder or any future purchaser.

In fact, if you scroll to the bottom of this ABI link, it suggests that insurers may not guarantee to maintain cover and suggests you ask if they will continue cover for the new purchaser.

If there was a legal obligation on insurers, I’m sure it would be mentioned there.

http://www.abi.org.uk/Information/Consumers/Household_Insurance.aspx

manwithaninsuranceproblem

Yes, i am now seriously confused, because at this point i am receiving directly contradictory views from various quarters on this, though i am completely sure all the views are being offered in good faith and with the best intentions.

interestingly, in connection with the repeat flood damage some unfortunate people are currently suffering, a TV news report today stated that insurers are legally obliged to continue offering insurance to flood victims they have paid out for, albeit at a higher premium, so clearly some legal basis DOES exist for this kind of difficult-to-cover hazard, though I have yet to identify the specific legislation to read in black and white.

hugoshavez

manwithaninsuranceproblem wrote: »

Yes, i am now seriously confused, because at this point i am receiving directly contradictory views from various quarters on this, though i am completely sure all the views are being offered in good faith and with the best intentions.

interestingly, in connection with the repeat flood damage some unfortunate people are currently suffering, a TV news report today stated that insurers are legally obliged to continue offering insurance to flood victims they have paid out for, albeit at a higher premium, so clearly some legal basis DOES exist for this kind of difficult-to-cover hazard, though I have yet to identify the specific legislation to read in black and white.

That was based on an agreemtn between the industry and the previous government, which was on the news because it will shortly expire. No actual legislation involved as I understand it.

vaio

hugoshavez wrote: »

That was based on an agreement between the industry and the previous government, which was on the news because it will shortly expire. No actual legislation involved as I understand it.

yep, and I'm pretty sure the agreement for insurers to continue offering subsidence cover following a claim is the same with no statutory basis.

If refused continuation cover I suppose there is an outside chance you could argue it under the FOS/FSA "treat the punter fairly" rules along the lines of insurerence is required by most people (mortgages etc) and designed to protect against certain perils, and to refuse continuation of cover just because of a claim would be unfair especially (because?) the risk averse nature of insurers in general means that no one else will be prepared to offer cover.

OP........motor & employers are legally required but I'm not so sure about horse

rs65

Insurers agreed in 2008 to continue to provide flood cover on the understanding that the government wold invest in flood defences.

That agreement runs out in June 2013. It is not a legal obligation.

Why don't you phone the ABI and ask them your specific question? If you read the link I posted above, it suggests you are not going to get the answer you want though.

I think the reason you can't identify the legislation is because it doesn't exist.

Ask whoever is telling you it does exist to show you it.

dacouch

I used to have a lot of dealings with L&G and was treated to a few all expenses nights out every year due to having a very large Household account with them.

As a company they're very proud of their history and company ethos which is essentially doing whats right.

A few years ago when a computer cost £1k+ I had a client whose young daughter was groomed and the guy was caught and prosecuted. Her computer was taken as evidence which the police managed to lose and would not pay compensation. The client asked me if it was covered, I knew it was not but had a hunch L&G would want to pay it. I spoke to my normal contact who wanted to help, it was referred quite high in the company and a decision was made to pay it even though they did not have to.

http://www.legalandgeneralgroup.com/about-us/our-story/

The only compulsory Insurances in the UK are vehicle and Employers Liability which is why these are the only Insurances you receive a Certificate of Insurance which is to satisfy the relevant statutes on it. Horse Insurance is not a compulsory, I'm not sure where the guy got that from.

Was the guy quite young? In his place I would not be so pushy as it's a big decision for you and closing the sale (In my mind) is not appropriate in this situation.

Was the quote from the local broker with a £3k subsidence excess as per your first post? If is it's very likely that your (And any future buyers) mortgage company will not accept it as they normally only accept £1k maximum.

In my opinion it would take a massive charge of company direction for L&G to stop offering cover to policyholders they've paid out on a subsidence claim for.

Personally I would stay with L&G especially as you mention they have reduced their renewal premium. Your other options being use someone like BureauInsure, the problem being they tend to use Lloyd's syndicates and the overall cover would not be as good as your L&G policy or go with someone like LV who are currently accepting properties with underpinning many years ago, there is no guarantee they will carry on offering cover. Incidently L&G have also started offering cover for underpinned properties that were underpinned a long time ago.

Being in the industry I'm quite risk adverse which affects my personal choice. In my time, I've seen some of the people lose out financially who had gone with companies who decided to do what LV (and L&G) are currently doing. The ones who use bureauinsurance etc have saved money but have a fairly basic policy cover in return. I've never seen anyone lose out (Apart from the high premiums) when they stayed with the existing subsidence claim Insurer.

There's stopping you asking L&G to provide a letter confirming they will continue offering cover. It will basically say they agree to continue offering cover to you and any future purchasers providing you remain acceptable as a normal client eg you don't get a criminal conviction or too many claims etc. I would be inclined to ring L&G's call centre direct and ask them to provide such a letter (Make sure it includes the line "future purchasers"). They have nice staff who should be able to provide such a letter if you get through to the right department eg Customer Service who deal with brokers / Swinton.

There used to be a way you could get a fairly decent discount from L&G though accepting a window lock discount. You did not need to use the window locks just have them. It might be worth asking Swinton about this and also if you have good security which you use eg 5 lever mortice locks and window locks that you always use as this gets a bigger discount. I would try and avoid the latter if possible as you don't have to worry whether you have totally locked up everytime you go out. They also used to give a discount if one of the adults did not work so were at home in the day time eg retired or housewife. Have a word with Swinton before renewal to see if any of these help

manwithaninsuranceproblem

Thanks very much to all respondents, the picture is now becoming a bit clearer. It all seems to be based fairly loose codes of practice and norms within the industry rather than any specific legislation, which is why it has taken me a little while to begin to understand i suppose : )
Within this loose structure, it looks like people need to tread very carefully, and balance a lot of factors potentially affecting large sums of money, with few guidelines, though i'm very grateful for the insights provided from within the industry.
Looks like it may be well worth keeping an eye on whatever agreement the industry thrashes out with the government in the coming year, as it does seem to roughly parallel the subsidence issue.

rs65

Anything decided on flood will have no bearing at all on subsidence. No point in waiting for that.



Just to follow up on an earlier point, there are more compulsory insurances than just motor and EL. One of these is third party liability for licensees of riding schools and establishments. Perhaps that is where the mention of horses came from.

Others include tp liability for keepers of dangerous wild animals, owners of dogs bred for fighting, licensees of nuclear installations, air carriers and ship owners in relation to oil pollution.

Also, pii for some professions including insurance intermediaries.

There are others too.