home insurance on buying a house with cracks. PLEASE HELP!

s77

Hi all,

We are in the process of buying a house which has substantial cracks in it. We have had a structural engineer out who is happy to say no signs of subsidence etc and we are happy to go ahead and have the house wall restitched.
HOWEVER....!
I have been back and forth with the present insurers of the house who have assured me that they will continue to insure the house on a new policy with us because they have to do so, regardless the condition of the house.
BUT the lawyer involved in the house purchase seems to think that they can refuse to insure as the vendors have not notified them about the cracks.

Could anyone confirm if they are legally obliged to do so as they cannot give us any written confirmation of this fact until we have a completion date. We do not want to go ahead with the purchase of the house however, obviously if we are going to be struggling to get it insured.

All and any advice most welcome and gratefully received.

Jonbvn

Hi,

I'm a structural engineer. If the cracks are not due to subsidence, how were they caused? Did the engineer say? If the reason for the cracks no longer exists, and the cracks are repaired then there should be no problem. However, if the cracks were due to subsidence, which has been subsequently made good, many insurers will not consider. Try the http://www.subsidencebureau.com/ for details of insuring previously underpinned properties (PUPS).

Despite the above, AFAIK, no insurer is legally bound to insure you. However, even if they were legally bound, I guess the premiums could be excessive?

s77

Many, many thanks for your speedy reply.

The structural engineer thought that the cracks might be a result of bomb damage and that thermal movement that has worsened them and suggested rotafix to restitch it.

I currently am on the phone to the Pru(on hold!), who are currently insuring the house, just to ask them again if they will insure us. They have said they will guarantee they will, as they are currently insuring the house. However, they are not willing to put this into writing or to give us a quote until we can give them a completion date.
We need to know if insurance will be a problem sooner rather than later as we are full steam ahead on purchasing the house at the moment and don't want to be struck with a lemon should we want to sell it in the future.

Its a real stress ache!

guppy

Have you spoke to any mortgage companies yet? They will require the property to be insured before they grant a mortgage.

Was it a formal report from the engineer? Unless he was an idiot I can't see him giving it the ok if he wasn't entirely happy with it.

s77

Hi Guppy,

We are remorgaging our house to help buy this one and yes, insurance is needed in order to complete the purchase.

It was a formal report and the surveyor was happy enough to say he was "fairly certain that subsidence was not the cause of the cracks". We are not worried about the house itself and are happy to carry out the remedial work but are obviously worried that we will have probs with insurance.
The company are not aware of the cracks as the vendor has not made any claims and we are happy to repair but are worried the current insurers might cause trouble and we are unable to get anything in writing from them, until we have a completion date.
We might just have to wait until we get a date and then take it from there.

Thank you!

oldwiring

"fairly certain that subsidence was not the cause of the cracks", with those bold words, I wonder where my enthusiasm would be.

s77

Yes, we had the same feeling but because the material the house is on is low shrinkage clay mix. he or any other surveyor would be not bet their license to practice and say conclusively that it is not subsidence. He has gone to to say that he thinks the cause is bomb damage.

Debt_Free_Chick

My understanding is that, under Insurance Law, an existing insurance must be honoured. The reason for this is that the existing insurer (Pru) already has the risk - even if it were subsidence, they have that risk and would have to pay out in accordance with the policy.

Changing the name of the insured person does nothing to alter the risk they already have - hence they WILL continue to insure it. Even if the house had suffered subsidence and been remedied, they would STILL insure it.

You need to find someone experienced in insurance law. Why not try Pru's legal department?

cattie

I'm certain that what Debt_Free_Chick has said about the insurance company having to honour the policy with a new owner is correct.

I know this was something I checked out when thinking of buying a property that had had remedial works carried out under an insurance claim. The insurers, Halifax, assured me that they were duty bound to to allow the policy to be assigned, but that it was possible the premium could increase by up to 20% when it was transferred to new ownership.