House forever penalised for cracks?

ludmilla

I posted this on the HOUSE BUYING, RENTING AND SELLING page, but I think it is probably more at home here?

I have a house, 4 flats, one flat sold, I am on one floor, my daughter in the other and I rent a flat, which I now want to sell.  We have had cracks for a little while and the lady who owns one of the flats, wanted to do something about them, so we called the insurance company.   That is when I discovered that I had not adhered to a clause that required that I get a yearly tree survey done.  Then as we had made a claim they doubled our premiums and then they declined our claim on a technicality (their words) .   We then dealt with the trees which the insurers had declared were the cause of the cracks, and we fixed the cracks (with steel rods and 10 year guarantee).  

In my mind we had done what was need for the house.  I then decided to sell the top flat.  However when I fill in the TA6 form the doubling of the premium effectively puts our house on the naughty step and makes it more or less unsellable, at least to people requiring a mortgage.  From what I have read I could off load the flat with a 20%+ discount.  There must be quite a few properties which have had cracks (I can't bring myself to use the word subsidence) - are they forever 'cursed'?  

I am a novice at all this, what can I do,  is the house blighted for all times, or is there a way to come in from the cold?  Any advice would be most welcome.  

Sandtree

Unfortunately you do need to differentiate between cracks from subsidence and just general movement/settlement. If you have subsidence associated with the property then it is a long term issue and most insurers will not provide subsidence cover going forward 

koru

About 10 years ago, we told our insurer about some cracks, so they sent a specialist to check them out. They advised that they were not subsidence and no work was needed. The insurer then bumped up our premium and, when I queried this, they said it was because of subsidence. I pointed out that this made no sense as a specialist had advised there was no subsidence.

They then said it was because I had made a claim. I argued that I did not claim for subsidence, rather I notified cracks as required in the policy and they chose to send an expert to check them. 

After a bit of 'banter', they said I would have to pay whatever they want, as no-one else would insure me after I had claimed for subsidence. But they were wrong. I always disclose that I made a claim for potential subsidence, but this resulted in an expert confirming we don't have subsidence. I've never had an insurer change our premium when I tell them this.

The moral? Maybe a mortgage company would change their view if you have paid for an expert opinion that confirms no subsidence?

dunstonh

Our property has some iron ties at one end and a marble will roll across the floor in the South wing due to historic movement.   The south wing also contracts and expands every year and during droughts, new cracks tend to appear.     Mainly as some wally decided to replace the lathe and plaster in that wing many years ago and the replacement doesn't have any ability to stretch.   I intend to get the whole lot replaced in time but for now we are leaving it as we don't use that wing of the house much.

We had a survey and structural engineers report completed and it was graded as level 2.   It was referred to an underwriter who phoned me up to say all was good and explained that pretty much most of the properties they insure in the area have regular cracking and most people don't use the insurer but just handle it under routine maintenance and they were not concerned about it.  The insurer did not put up the premiums. 

So, it can come down to the quality of the insurer.  For some insurers, they can't tell the difference between movement and subsidence.   Others just don't want either movement or subsidence.  Others don't mind  about movement as long as it is graded at 3 or less (i.e. cosmetic)