Insurance Claim in Progress for tree root damage

kilby_007

We've been looking at loads of houses (20 viewings so far) and we found one today that ticked nearly all of the boxes, so we put an offer in. The estate agent made positive noises about our offer but it was at this point that they told us the vendor is in the midst of an insurance claim for damage caused by the roots of a council owned tree at the front of their property. The damage has already been assessed and determined to be "slight" by the insurers, and the work required is to insert some structural reinforcement (steel beams) across the front bays which should take a day and a half.

The vendor has asked for us to go for a second look so that they can explain the process and point out the cracks (we didn't notice them on our viewing so it can't be bad).

Not having any experience with this kind of thing, I'm clueless as to future risk and the knock on effect with mortgage underwriters and insurers. The EA said that they are in talks with the council about having the tree removed. We're in two minds now as it took us so long to find a property we liked, but not sure if there's too many potential pitfalls. Not only that, the vendor has already been through a sale previously that fell through, and the first time buyers of our property won't wait forever.

Anybody any experience with this kind of thing?

AdrianC

Your mortgage lender is going to be your big problem. Other than that, it's entirely down to whether you feel comfortable with it or not.

kilby_007

I guess it comes down to whether the surveyors are happy with the works that have been done (when they are done). We'll assess again tomorrow when we go for a second viewing.

dacouch

The Estate Agent calls it Tree Root Damage, the Insurance industry calls it Subsidence.

Proceed with caution and research how Subsidence affects your costs eg Home Insurance and the price you can achieve when you look to sell

G_M

Ask to see all the paperwork relating to the claim:
* the original claim
* the insurer's reply
* the insurer's survey report
* the insurer's offer
* the instruction to the contractors doing the work

This will make the severity clear to you, and also (good point above dacouch!) show whether the 'subsidence' word has been used.......

dacouch

G_M wrote: »

Ask to see all the paperwork relating to the claim:
* the original claim
* the insurer's reply
* the insurer's survey report
* the insurer's offer
* the instruction to the contractors doing the work

This will make the severity clear to you, and also (good point above dacouch!) show whether the 'subsidence' word has been used.......

It will almost certainly be dealt with as a subsidence claim.

The OP mentions they're using the word "Slight", when it comes to subsidence, a claim can easily amount to upwards of £50k so one and a half days work rectifying it would be "Slight" compared to a full on Subsidence Claim.

It's worth bearing in mind that it would be fairly unusual for the council to be liable for the damage eg for them to ultimately pay for the damage. So when the estate agent tells you it won't go down as a subsidence claim in the end as the council will pay for it he's likely to be telling porkies. Besides even if they do pay the claim the house will still have a subsidence claim against it.

Also the sellers / buyers are likely to regret that the work was not done privately eg not involving the Insurers as if the cost was circa £5k it would almost certainly have been cheaper in the long run to have not involved the Insurers

kilby_007

dacouch wrote: »

The Estate Agent calls it Tree Root Damage, the Insurance industry calls it Subsidence.

Proceed with caution and research how Subsidence affects your costs eg Home Insurance and the price you can achieve when you look to sell

The asking price was about 15K lower than you'd expect for the area, so I guess they've already taken the hit on that. We offered 20K less than their asking price too and I wouldn't expect to go much higher (the house is circa 240K).

kilby_007

dacouch wrote: »

It will almost certainly be dealt with as a subsidence claim.

The OP mentions they're using the word "Slight", when it comes to subsidence, a claim can easily amount to upwards of £50k so one and a half days work rectifying it would be "Slight" compared to a full on Subsidence Claim.

It's worth bearing in mind that it would be fairly unusual for the council to be liable for the damage eg for them to ultimately pay for the damage. So when the estate agent tells you it won't go down as a subsidence claim in the end as the council will pay for it he's likely to be telling porkies. Besides even if they do pay the claim the house will still have a subsidence claim against it.

Also the sellers / buyers are likely to regret that the work was not done privately eg not involving the Insurers as if the cost was circa £5k it would almost certainly have been cheaper in the long run to have not involved the Insurers

Thanks guys.

The EA didn't say that the council were liable for damage. They seem to be quite open about it, by the sounds of it they've had to explain the situation to buyers a number of times.

I think we can be fairly sure then that it will be a subsidence claim (but I will check). Is this likely to mean ridiculous insurance premiums? If we're talking a couple hundred quid a year extra we can deal with that, but if it were to be thousands that'd obviously sway our decision. I guess I can only find out by speaking to insurers, would I find this out from getting a quote online or should I phone an insurer to find out?

kilby_007

Update: Done a couple of quotes online for subsidence insurance. Most insurers will not quote but there's a couple that come up between £350-£400 which is about double what we're paying now for a new build house. Over 10 years it'll cost £2000 extra plus a £1000 excess for any future claims.

Something to mull over, doesn't seem too bad.

G_M

Excess for subsidence is nearly always £1000 anyway, whether there's a history or not.

tbh I'm surprised your quotes are that low......

cattie

Usually when an insurance claim for remedial work has been carried out on a property, no other insurer wants to take it on, or as you mentioned, will hike the premiums up. The more usual thing to do is to stick with the current insurers as they will abide by a code of practice where insurers will continue to offer cover after a claim, even if the property changes hands.

As somebody who has previously owned a home that had problems very similar to the one you are talking about, my advice would be to walk away unless you intend to make it your forever home, or at least a very long term one.

A recent history of structural problems & the dreaded S word will put many potential buyers off, no matter how nice the house is. I had to take a huge hit on my selling price as I didn't want to lose the property I now live in, as they don't come on the market very often. As I was downsizing, ending up with a lower selling price than hoped didn't affect me as much as somebody who wanted to upsize or move to a different more expensive location.