Underpinning

nicter

We have our house on the market and have found a bungalow we really like. We have now found the bungalow was underpinned 26 years ago. I am assuming any guarantee will have run out by now.
Have been advised by a friend that the current owners should be asked to purchase an indemnity insurance against future problems.
If they do this and at some point in the future we wish to sell would we in turn have to buy an indemnity or does the one the current owners buy run for a term ?
Also any advice about the reflection on price underpinning has on a property please

ethank

I would run like hell from an underpinned property! You will not get decent home insurance, when you do it will cost more, it will be difficult to sell, need I go on.

I thought that indemnity policies covered missing documents, covenants etc. Even if an indemnity policy could cover underpinning, I doubt you will get an insurer to even write a indemnity policy based on something fixed 26 years ago.

ruggedtoast

I have never heard of an indemnity policy. You can, sometimes, get the current insurer to take you on by switching the policy over from the old owners if you can't otherwise find insurers.

From a probability point of view if the structure gets a clean bill of health after a full survey then after 26 years if it hasn't moved it probably isn't going to. It will always be harder / more expensive to insure and harder to sell though, so I would expect the price to reflect the problems.

eddddy

Hi nicter

I've not heard of indemnity insurance for the situation you describe.

Any future subsidence problems should be covered under your buildings insurance policy. Many insurers won't quote on houses that have ever been underpinned. But two insurers that will quote on normal terms are:

Axa - who are only interested in the last 10 years. They ask:

To the best of your knowledge has your property experienced subsidence or heave in the last 10 years?

And Legal and General - who are only interested in the last 15 years. They ask you to confirm:

ALSO, IF YOU'RE BUYING BUILDINGS INSURANCE, YOUR PROPERTY (AND ITS OUTBUILDINGS) HASN'T BEEN:

- Affected by subsidence, heave, landslip or structural movement in the last 15 years.
- Underpinned, or provided with other structural support in the last 15 years.

Some other insurers will also offer cover, if you get a structural report confirming that no movement has occurred since the underpinning. But their premiums may be higher.

You should also be able to continue insuring with the vendors current insurers - assuming it was them that handled the claim that resulted in underpinning.

But you should expect a discount on the house price to compensate for the complexities in insurance (and possibly increased premiums), and expect to have to offer a similar discount when you come to sell.

Some people run a mile from underpinned properties (like ethank!) others see them as an opportunity to get a cheaper property.

The tough question is working out how insurers and the market will view underpinned properties in years to come. If there are no future problems with them, insurers and purchasers will become less nervous - and 'discounts' will diminish (so you will have bought a bargain!)

Conversely, if there are lots of problems, insurance will become more expensive - and so discounts will have to increase.

Foxy-Stoat_3

How much is the bungalow and how much would the insurance be?

My place is around £150,000 and the buildings insurance is about £150 a year....if the premium is say 50% dearer due to underpinning 25+ years ago then it maybe an extra £75 a year.

I wouldn't expect the vendor to knock the difference off the cost of the property due to the possibility of increased insurance premiums.

If it was underpinned a couple of years ago, then fair enough, it may still move but 25+ years....if there are no signs of movement then chances are it will be fine....unless the vendors have recently filled and decorated I wouldn't worry.

Check around the windows, ceiling and wall junctions for fresh paint, it may of just been filled and painted to hide recent movement.

dacouch

eddddy wrote: »

Hi nicter

I've not heard of indemnity insurance for the situation you describe.

Any future subsidence problems should be covered under your buildings insurance policy. Many insurers won't quote on houses that have ever been underpinned. But two insurers that will quote on normal terms are:

Axa - who are only interested in the last 10 years. They ask:


And Legal and General - who are only interested in the last 15 years. They ask you to confirm:

Please bear in mind that if you're buying a house with underpinning or looking to transfer your existing underpinned home insurance to Axa or L&G that they have both only fairly recently started accepting underpinned houses after decades of refusing them.

I've seen a similar situation occur twice in the past, one due to the Insurer incorrectly wording their question on subsidence / underpinning and the other due to the Insurer actively targeting the business (As L&G & Axa have done).

In both situations I warned my clients they may end up with future problems but they were blinded by the savings.

A couple of years later I started getting desperate calls from these clients as they were on the verge of exchanging and they were discovering the two Insurers would not accept the new clients with subsidence / underpinning. They wanted cover with their Insurer who paid out on the subsidence claim who all laughed and declined to offer cover. Their only other option was through the specialist markets who generally require to survey the property (At a cost) and then provide a quotation based on this information which is not that quick a process. The result being that most of the house sales fell through and the houses eventually sold at heavily discounted prices (Higher than normal discounts for underpinned properties).

I'm not saying Axa or L&G will do this but please take it into account especially as underpinned houses do still produce further claims and they run into many £10ks. Once you break the bond with the Insurer who paid our on the original subsidence claim it's highly unusual for them to agree to offer cover again.

Axa have very recent history for leaving a market when it was not profitable

Windsorcastle

Indemnity policies are to protect a new owner against missing buildings regs etc, so that they are protected in the event of the local authority coming after them. They are not for protecting against a future recurrence of an insurable event - so the first lesson here is to take what 'friends' say with a large pinch of salt...

Underpinning that occurred 26 years ago is nothing to be afraid of. Underpinning hugely lessens the risk of future problems, and if it hasn't moved again in this time, it's very unlikely to. So you should feel assured that the property is actually more stable than many others. As other posters have said, many isurance cmpanies are only interested in underpinning or subsidence wthin the past 10 years - again, not a problem in this case.

I sold a property this year that had a subsidence insurance claim just 12 months ago - not underpinning, but superstructural repairs - and lots of people tried to panic me, saying it would never sell, I'd have to vastly cut the price, etc etc. I sold it for near enough full asking price, and the buyers were reassured that the work had been done, and all they had to do was take out insurance with the same insurer. don't know what premium they were charged but they never came back asking for a reduction or anything.

If you love this property, you should just get a full structural survey done (which will reassure any insurers anyway) and then go for it, unless it shows that there is recent movement.

FR_262

The house I bought and the house next door were for sale at the same time for the about the same amount. Next door was underpinned and mine wasn't.

The price difference was negliable.

I tell them they're keeping my house up.

dacouch

Windsorcastle wrote: »

Indemnity policies are to protect a new owner against missing buildings regs etc, so that they are protected in the event of the local authority coming after them. They are not for protecting against a future recurrence of an insurable event - so the first lesson here is to take what 'friends' say with a large pinch of salt...

Underpinning that occurred 26 years ago is nothing to be afraid of. Underpinning hugely lessens the risk of future problems, and if it hasn't moved again in this time, it's very unlikely to. So you should feel assured that the property is actually more stable than many others. As other posters have said, many isurance cmpanies are only interested in underpinning or subsidence wthin the past 10 years - again, not a problem in this case.

I sold a property this year that had a subsidence insurance claim just 12 months ago - not underpinning, but superstructural repairs - and lots of people tried to panic me, saying it would never sell, I'd have to vastly cut the price, etc etc. I sold it for near enough full asking price, and the buyers were reassured that the work had been done, and all they had to do was take out insurance with the same insurer. don't know what premium they were charged but they never came back asking for a reduction or anything.

If you love this property, you should just get a full structural survey done (which will reassure any insurers anyway) and then go for it, unless it shows that there is recent movement.

Your posting history suggests your house sale was a little more complicated then you remeber

nicter

Thankyou for all your advice and useful information
We do like the house very much so will look into insurance companies and get some idea of cost
This is the bungalow http://www.rightmove.co.uk/property-for-sale/property-28413339.html?premiumA=true