Buying a house with cracked drains causing movement, how can we get insurance?

LondonHouse6

After a long search, we found our dream house, a Victorian mid-terrace. The sellers were transparent about their recent structural survey and any costs and repairs. They mentioned the drains needed repairing. It had caused some movement at the back of the house but wasn't considered subsidence. We got our structural engineer out, he said the same. We got a CCTV survey, it confirmed the cracked drains. 

We planned to get the drains fixed as soon as we got the property and planned on doing a kitchen extension, which would knock through the cracked wall. The structural engineer said to wait 6 months before repairs for the settlement to stop after the repair.

We then got our Level 3 survey, and he said the same thing as our structural engineer but had a very different take that we wouldn't get insurance on the property, even though it wasn't classed as subsidence and even if the drains were fixed immediately. 

I now feel stuck and unsure of my options. I still very much want to buy the property, but I want it all all above board. I want to be honest with insurers and be fully covered, including subsidence cover. 

Has anyone else been through this? Either selling or buying, dealing with cracked drains and movement. I think we could get the sellers to get the drains fixed beforehand, but I'm not sure that alone would satisfy insurers. Could we try to use their current insurers to cover us on a new policy? 

propertyrental

Whether standard insurers will quote a premium for cove depends how you answer the questions they ask eg

* has property ever suffered subsidence etc

Your answers must be honest, but you say above

....wasn't considered subsidence. We got our structural engineer out, he said the same. We got a CCTV survey, it confirmed the cracked drains. 

but you also said:

wait 6 months before repairs for the settlement to stop after the repair.

so it depends if the insurer asks you about 'settlement'.

Go onto insurance comparison sites and answer all the Qs honestly. If /when you get quotes, click through to the insurer's own website and check their questions and answers.

You'll soon find out if insurance is available and at what price.

LondonHouse6

I have spoken to a couple of mainstream insurance companies, one said because it was the drains, they wouldn't cover, even if it was a hairline crack, they automatically deem it as subsidence.

Another has said they would cover if the movement is 'historic' (I'm not sure how we would prove it is historic and hasn't got worse or how long historic is).

Another has said they would want a minimum of 6 months to prove the movement has stopped before they would offer a policy. 

We need an insurance policy, or we can't purchase. I am wondering if we should try going through the seller's insurance company. They may put it down as a 'drain issue,' and we could continue our policy with them. Blue sky thinking... 

Slinky

Our property was repaired for subsidence in 1990. It was part of the single storey extension that had the work. The vendors told me they didn't know what caused the subsidence (probate property, you'd think that the subject would have come up, it was their parents' home) but I suspect from a comment in a copy letter written by the deceased to his insurance company, received in the paperwork we received after purchase, that it was drainage related. Certainly not trees according to the neighbour who lived next door at the time of the repairs.

When looking for insurance when we bought in 2017, 'historic' was deemed to be over 25 years ago....

I hate to rain on your parade, but we still have very limited options regarding building insurance. We have it, and at a reasonable price with the standard £1K subsidence excess, but there aren't many companies offering it when we run it through the price comparison sites, and we're now 34 years on. We also have separate contents cover as trying to get combined, when we have a few high value items, was impossible.

I think the vendors are going to have to sort this themselves before selling to have a hope in hells chance of a purchaser being able to get buildings cover from somewhere.

LondonHouse6

Slinky said:

Our property was repaired for subsidence in 1990. It was part of the single storey extension that had the work. The vendors told me they didn't know what caused the subsidence (probate property, you'd think that the subject would have come up, it was their parents' home) but I suspect from a comment in a copy letter written by the deceased to his insurance company, received in the paperwork we received after purchase, that it was drainage related. Certainly not trees according to the neighbour who lived next door at the time of the repairs.

When looking for insurance when we bought in 2017, 'historic' was deemed to be over 25 years ago....

I hate to rain on your parade, but we still have very limited options regarding building insurance. We have it, and at a reasonable price with the standard £1K subsidence excess, but there aren't many companies offering it when we run it through the price comparison sites, and we're now 34 years on. We also have separate contents cover as trying to get combined, when we have a few high value items, was impossible.

I think the vendors are going to have to sort this themselves before selling to have a hope in hells chance of a purchaser being able to get buildings cover from somewhere.

When you say repaired, did you have to have it underpinned? This is my fear of going to the current insurers, as I'm not sure if they distinguish between subsidence and movement, and once the claim has gone through, it will be marked on the house. The frustrating thing is the repairs and drain fix aren't that expensive. 

Slinky

LondonHouse6 said:

Slinky said:

Our property was repaired for subsidence in 1990. It was part of the single storey extension that had the work. The vendors told me they didn't know what caused the subsidence (probate property, you'd think that the subject would have come up, it was their parents' home) but I suspect from a comment in a copy letter written by the deceased to his insurance company, received in the paperwork we received after purchase, that it was drainage related. Certainly not trees according to the neighbour who lived next door at the time of the repairs.

When looking for insurance when we bought in 2017, 'historic' was deemed to be over 25 years ago....

I hate to rain on your parade, but we still have very limited options regarding building insurance. We have it, and at a reasonable price with the standard £1K subsidence excess, but there aren't many companies offering it when we run it through the price comparison sites, and we're now 34 years on. We also have separate contents cover as trying to get combined, when we have a few high value items, was impossible.

I think the vendors are going to have to sort this themselves before selling to have a hope in hells chance of a purchaser being able to get buildings cover from somewhere.

When you say repaired, did you have to have it underpinned? This is my fear of going to the current insurers, as I'm not sure if they distinguish between subsidence and movement, and once the claim has gone through, it will be marked on the house. The frustrating thing is the repairs and drain fix aren't that expensive. 

It wasn't our house then, but yes it was underpinned.

propertyrental

Slinky said:

LondonHouse6 said:

Slinky said:

Our property was repaired for subsidence in 1990. It was part of the single storey extension that had the work. The vendors told me they didn't know what caused the subsidence (probate property, you'd think that the subject would have come up, it was their parents' home) but I suspect from a comment in a copy letter written by the deceased to his insurance company, received in the paperwork we received after purchase, that it was drainage related. Certainly not trees according to the neighbour who lived next door at the time of the repairs.

When looking for insurance when we bought in 2017, 'historic' was deemed to be over 25 years ago....

I hate to rain on your parade, but we still have very limited options regarding building insurance. We have it, and at a reasonable price with the standard £1K subsidence excess, but there aren't many companies offering it when we run it through the price comparison sites, and we're now 34 years on. We also have separate contents cover as trying to get combined, when we have a few high value items, was impossible.

I think the vendors are going to have to sort this themselves before selling to have a hope in hells chance of a purchaser being able to get buildings cover from somewhere.

When you say repaired, did you have to have it underpinned? This is my fear of going to the current insurers, as I'm not sure if they distinguish between subsidence and movement, and once the claim has gone through, it will be marked on the house. The frustrating thing is the repairs and drain fix aren't that expensive. 

It wasn't our house then, but yes it was underpinned.

So do you now have a certificate of structural adequacy? Should have been issued when the underpinning was completed.

A limited number of insurers will insure with that.

Slinky

propertyrental said:

Slinky said:

LondonHouse6 said:

Slinky said:

Our property was repaired for subsidence in 1990. It was part of the single storey extension that had the work. The vendors told me they didn't know what caused the subsidence (probate property, you'd think that the subject would have come up, it was their parents' home) but I suspect from a comment in a copy letter written by the deceased to his insurance company, received in the paperwork we received after purchase, that it was drainage related. Certainly not trees according to the neighbour who lived next door at the time of the repairs.

When looking for insurance when we bought in 2017, 'historic' was deemed to be over 25 years ago....

I hate to rain on your parade, but we still have very limited options regarding building insurance. We have it, and at a reasonable price with the standard £1K subsidence excess, but there aren't many companies offering it when we run it through the price comparison sites, and we're now 34 years on. We also have separate contents cover as trying to get combined, when we have a few high value items, was impossible.

I think the vendors are going to have to sort this themselves before selling to have a hope in hells chance of a purchaser being able to get buildings cover from somewhere.

When you say repaired, did you have to have it underpinned? This is my fear of going to the current insurers, as I'm not sure if they distinguish between subsidence and movement, and once the claim has gone through, it will be marked on the house. The frustrating thing is the repairs and drain fix aren't that expensive. 

It wasn't our house then, but yes it was underpinned.

So do you now have a certificate of structural adequacy? Should have been issued when the underpinning was completed.

A limited number of insurers will insure with that.

No we don't have a certificate. If it existed it's long since disappeared. I can see from our house records on the planning portal it was done with building control oversight (I've got a receipt for a payment to the department), but I declare this when looking for insurance and don't have a problem finding a reasonable quote but from a limited number of specialist insurers.  It was repaired 34 years ago so it's well in the past now with no recurrence.

Section62

propertyrental said:

Whether standard insurers will quote a premium for cove depends how you answer the questions they ask eg

* has property ever suffered subsidence etc

Your answers must be honest, but you say above

....wasn't considered subsidence. We got our structural engineer out, he said the same. We got a CCTV survey, it confirmed the cracked drains. 

but you also said:

wait 6 months before repairs for the settlement to stop after the repair.

so it depends if the insurer asks you about 'settlement'.

Go onto insurance comparison sites and answer all the Qs honestly. If /when you get quotes, click through to the insurer's own website and check their questions and answers.

You'll soon find out if insurance is available and at what price.

'Settlement' is usually used to mean movement happending during or shortly after construction when the structure 'settles' into/onto the ground supporting it.

If the structure starts heading downwards at a later date it would usually be called 'subsidence'.

From what the OP describes I'm not sure 'settlement' is the correct term, and it could be risky to rely on obtaining buildings insurance by relying on the difference in terminology.

LondonHouse6

I wanted to give an update, as I have found other posts on this forum really helpful and always wondered about the final outcome.

We decided to walk away from the property. Although the sellers were happy to go through their insurers, they had a group landlord policy, and we were all uncertain whether they could transfer the claim/guarantee to us. Additionally, we weren't sure if we could take out a new policy with their insurers. It became quite complex on both sides. The sellers were very willing to pay for all the repairs themselves and bring in a structural engineer, but it wouldn't have given us the same coverage as an insurer. If anything were to happen in the future, we wouldn't be covered.

I feel that we learned our lesson, though. We viewed another house shortly after, which had a vertical hairline crack running the length of the front of the house, along with cracked concrete at the foot of the house. A tree two meters from the house was flourishing, and you could see it was pulling up the pavement around it. If we had entered that transaction, I'm sure it would have been classed as progressive movement, as the tree was still there—putting our lessons learned into practice.

The hunt continues...