Insurance for house with subsidence/underpinning 6 years ago - no documentation

AndyDufresne

I am buying a house that has had very minor subsidence to a wall in the ground floor bathroom, due to a water leak. The seller claims it was about 6 years ago. It had underpinning put in as a result. The vendor cannot remember if it was through an insurance claim and has no documentation to prove anything. It was insured subsequently to this though but was not renewed this year as the house was put on the market. 

How difficult is it to get buildings insurance on the property?

Which insurers will not require any documentation (e.g. certificate of structural adequacy / engineer report)?

I am buying with a mortgage, is the lender likely to withdraw their offer?

Thanks in advance 

DullGreyGuy

So the property is currently uninsured?

Speak to the previous insurers.

Most mainstream insurers wont entertain insuring a property thats ever had any work done for subsidence even with the relevant certification. The ABI code of best practice (not all insurers sign up) says that the existing insurer continues to offer terms however if the policy is lapsed there is no requirement for them to reoffer terms after.

Section62

Has the vendor asked building control for a copy of the documentation they hold?  If BC have no record of the underpinning then I would have expected your solicitor to alert the mortgage company and hit the 'pause' button.

trakky14

So we had a similar situation...we are buying a barn conversion which was converted about 17yrs ago. As part of the conversion they chose to underpin most of the ground floor...to prevent future problems really not due to subsidence. Apparently quite common with barn conversions. Anyway, no paperwork etc....we found out quite late into the process. 

Our solicitor had to notify our mortgage company of the work, they didn't care and were happy to lend. We'd also had a level 3 survey done who wasn't aware of the work as it wasn't obvious and the vendors never mentioned it to him on the day...but once he knew he said based on what he'd seen it looked sound. Our insurance company didn't care either as it was so long ago and the lender, survey etc all OK. 

lincroft1710

What idiot doesn't insure their house because "they're putting it on the market"? 


Nor can they "remember if it was through an insurance claim and have no documentation to prove anything"! 


Andy, I would be looking elsewhere for somewhere to buy!

eddddy

AndyDufresne said:

The vendor cannot remember if it was through an insurance claim and has no documentation to prove anything. It was insured subsequently to this though but was not renewed this year as the house was put on the market. 

I would strongly suspect that the vendor is fibbing to you.

I find it hard to believe that somebody can't remember whether they made an insurance claim for subsidence 6 years ago, as opposed to phoning around for surveyors, engineers, contractors, etc to get quotes and arrange underpinning.

How did you find out about the underpinning? Did the vendor admit to it, or did a surveyor find it? Maybe a surveyor for a previous failed sale?

And the story about it not being insured because it's on the market isn't credible either - I'd say that's a load of tosh.  I'd tend to suspect something a bit more sinister - like the vendor didn't declare the underpinning to the insurer, and when the insurer found out, they cancelled cover for non-disclosure.


In your position, I'd want to get to the bottom of all this before proceeding.


FWIW, If the subsidence has been repaired properly, Lloyds Bank Group companies would probably insure the house on normal terms. Their subsidence requirement is:

Subsidence
Any previous subsidence damage has been fixed and no longer needs to be monitored.

Subsidence is when a building moves downwards due to a change in the ground conditions beneath the foundations. This can typically cause cracks to appear in the walls of the building.

But I would still want to know more about the house and repairs before proceeding.

DullGreyGuy

trakky14 said:

So we had a similar situation...we are buying a barn conversion which was converted about 17yrs ago. As part of the conversion they chose to underpin most of the ground floor...to prevent future problems really not due to subsidence. Apparently quite common with barn conversions. Anyway, no paperwork etc....we found out quite late into the process. 

I'm no engineer but seems fairly reasonable that the level of foundations you'd want for your home is going to be materially different from an outbuilding. Even more so as these outbuildings are not always the most modern of buildings and so probably built with a lower standard of foundation than if the same building was to be put up today.

Insurers ask about issues of subsidence not if you've done major works to a building and so deemed more robust foundations are required. Mortgage providers generally just want to know insurance will be available so they dont end up with £500k secured against a collapsed building. 

Its a very different situation to having found a building to have subsidence!

AndyDufresne

Thank you for the replies. 

I believe that the property may have belonged to the vendor’s deceased family member, and home insurance was taken out in the vendor’s name after the underpinning was done - I believe this may reasonably explain the lack of knowledge or documentation that the vendor has. It’s still unclear though.

This was all revealed from enquiries made during the conveyancing. 

Does Lloyds require any structural certificates?

eddddy

AndyDufresne said:

Does Lloyds require any structural certificates?

Not as far as I'm aware (they didn't when I last asked them). But if you make a similar claim, and they find it wasn't repaired properly previously - i.e. poor materials and/or poor workmanship - they might refuse to pay out.

As you know nothing about the repair, in your position I think I would want a report from a structural engineer saying that it appears to have been fixed properly, there is no ongoing movement, etc  - for my own piece of mind, and to show the insurers if there was any future claim.

AndyDufresne

eddddy said:

AndyDufresne said:

Does Lloyds require any structural certificates?

Not as far as I'm aware (they didn't when I last asked them). But if you make a similar claim, and they find it wasn't repaired properly previously - i.e. poor materials and/or poor workmanship - they might refuse to pay out.

As you know nothing about the repair, in your position I think I would want a report from a structural engineer saying that it appears to have been fixed properly, there is no ongoing movement, etc  - for my own piece of mind, and to show the insurers if there was any future claim.

Ah right. Lloyds seems to good to be true to me - surely anyone could have underpinning done to fix subsidence, have no structural adequacy or any other kind of guarantee, and get insurance like nothing happened? Or am I missing something?

I’d have thought that would put specialist insurers out of business… or am I being obtuse?

eddddy

If the underpinning is done badly (poor workmanship and/or poor materials), the resulting damage wouldn't be covered. I suspect they would check for that if you made a claim.

Lots of people say that an underpinned house is much less likely to suffer future subsidence than the similar house next door without underpinning.

Maybe Lloyds are putting this theory to the test. If they get loads of claims, maybe they'll change their future terms.

(TBH, that's a risk you need to consider. If Lloyds decides to change their terms, will you be able to easily find another insurer?)


Give their customer services a call and see what they say. That's what I did a few years back.