Subsidence Insurance Claim

ballamory

Hello everyone,

Looking for advice and help relating to a long running subsidence insurance claim.

Basically,  I put in a subsidence claim over 5 years ago on my property.  There is significant damage in pretty much every room in the house - cracks on the inner and outer brickwork and walls,  joints coming away from each other,  rotation of the property such that some of the brickwork is no longer aligned, doors and gates don't shut properly, garden fences falling down due to earth movement,etc.


I am being represented in this matter by my own loss assessors, whilst the insurance company is being represented by a loss adjuster.  

Years ago, my assessors commissioned several sets of experts to come and examine the property.  Each of them surveyed the property and produced reports saying that there was too much damage, and the property needed to be demolished and rebuilt - that repair is not economical.


The loss adjusters and insurance company have consistently refused to accept this, and maintain that the property can be repaired, and that this is their position, which hasn't changed.    They have also in the process refused to pay any of the expert we commissioned, despite saying previously that they would, so our experts are chasing payment they should have had years ago.

There is also no consensus on the cause of the subsidence, with theories ranging from vegetation to drains, but no hard proof, so I am concerned that further damage may occur after repair/rebuild without a proper cause being identified. The insurance company sends round a measurement team every month to check the size of the cracks, and whether they are worse. 


Despite the claim rolling on for years, and lots of letters going back and forth between everyone, we seem to have reached an impasse.   

My loss assessors maintain that if I accept the repair option that is on the table from the insurance company, then the house will not be restored to its 'pre-loss' condition, it will lose significant market value, and it may not be sellable or mortgageable in future.  The insurance company have received all of the reports and notes to this effect, but essentially refuse to comment on them,  and nothing moves forward.   They reply to very little,  whatever questions my loss assessors ask them. For example, we made a Subject Access Request relating to the claim, and they did not supply us with most of the information we asked for, with no explanation why.


There have been discussions about taking this to some other body, either the courts, the insurance ombudsman, or some sort of arbitration service.   The courts are extremely expensive and risky, as I understand it the ombudsman is regarded as being in the pocket of the insurance companies, so may not be neutral.   The experts from my team and the loss adjuster have identical qualifications (MIStructE CEng), but are saying opposite things.   

Anyone with any ideas how I can move this claim forward, in a way that doesn't jeopardise the value in my house?


 

user1977

Hopefully somebody better informed than me will come along, but I'd be concerned about the timescales if this has been ongoing for more than 5 years, and what the deadline might be if you had to start court action against the insurer.

RogerPensionGuy

There's a thread on here that just asked the other day about a issue costing 5K to apparently fix for advice.

The thread I talk of is worth a read. 

Back to this thread. 

In my experience and reading the insurance companies often look at the cheapest potential fix possible using all the tricks, delay, wear people down to avoid paying for the best assured outcomes. 

I've read of cheap fixes and then more issues just a few years later and then insurance companies arguing who was providing cover whilst percentages of damage occurred kicking the tin down the road. 

Any house with previous or current ongoing subsidence issues is a problem, houses that have two or more separate or linked issues become a real headache in so many ways. 

I think the opening poster maybe should seek a fully independent outside organisation to appraise the situation and consider their views. 

I like the initial view on this thread, rebuild sounds nice to my ears.

Good luck to the opening poster. 

Annemos

Oh this is just awful for you. 

Some things on the Ombudsman. 

I have read many Ombudsman Cases on Subsidence and been to the FOS twice myself. I have found them to be very fair. And they do have a Special Team that handles the Subsidence Claims. You go to Adjudication and if you or Insurance Company are still not agreeing, then it goes to the Full Ombudsman. 

But the Financial Ombudsman are not Technical Experts/Engineers. So they rely on the evidence that is presented before them by Structural Engineers. And they will try to weigh up which one seems to make more sense. Very occasionally, I have also seen them order that the Insurer has to find 3 separate Structural Engineers, for the Homeowner to choose one...... to give a 3rd impartial opinion. 

What I have often seen happen, is that the Homeowner has to try out the remedy provided by the Insurer. (Maybe a Root Barrier or Resin Injection.)  Then if the resulting Repairs are not found to be "Lasting and Effective", then the Insurance Company has to think again and that might result in an underpinning. 

But I have not seen a Case about the damage being so bad that demolition is presented as one of the options. (But I also have not searched on that particular issue.) 

From all the Cases I have seen, I suspect the Ombudsman will say that this one has definitely been going on for far too long and so a conclusion has now to be reached. 

Try to set aside the issue of "the Value of the Home". I have seen the Ombudsman decline issues of Loss of Value, because that can be inherent in any property, once it has had Subsidence, due to the issue of getting ongoing Insurance etc. So I am worried about going in on that particular aspect. Insurance is not there for that purpose. It is to repair damage caused by perils listed in the Insurance Contract. (It is not even there to prevent future damage, in fact!)

BUT as you say, the home does have to be put back into the state it was before the Subsidence damage happened. And moreover, that state of repair must be LASTING AND EFFECTIVE. (Many years at least.)


Has your own Structural Engineer come up with sound reasons why the proposal of the Insurance Structural Engineer is not sufficient to restore the home to a good and LASTING state or repair? 

What I think the Ombudsman would look at is.....   Has the cause of damage been ascertained? Has that cause of damage been removed?  If so, is there a LASTING AND EFFECTIVE method that can be used to then repair that house, so that it will then be in the state it was before the Subsidence happened?    So it would be up to your Structural Engineer to present evidence just why the Insurance Company's proposed method would NOT be Lasting and Effective. And perhaps to argue about just why the Cause of Subsidence has not yet even been ascertained, let alone removed, if that is the case.  And also to discuss whether movement has stopped or is still continuing and/or progressive, through the use of the monitoring equipment. 

So I stress again. Leaving aside the actual issue of the Value of the Property. Is the actual evidence provided by your own Structural Engineer, more persuasive than that of the Insurance Company?  

(Side note... that issue of Repair not "economical". I feel that maybe for your own Insurance Company to decide, rather than your Loss Assessors.) 


====================================

More things 

1     The Courts normally rule the same decision as the Ombudsman Service, I have read. It would be unusual for a Court to come to a different conclusion. 


2      I am not an expert on this aspect, but came across it in passing. There is a limit to what the Company has to pay, even if the Ombudsman recommends more. So the firm can refuse to pay more. It seems to be 430,000 pounds currently. ( I don't know how it works if say the Ombudsman rules 700,000. Insurance Company says only 430,000. Can one then go to Court? I have no idea how this would work. The Ombudsman Service could I think advise you on that issue.) 

https://www.financial-ombudsman.org.uk/consumers/expect/compensation#limits


3. Many cases I have seen:   if the Ombudsman decides your Structural Engineer's Opinion is the more acceptable one and it is substantially different to the Insurance Company one, then your costs of that advice should be reimbursed. That happened to me. 


4   This is going to take you time. But I thoroughly recommend you do this. 

Do a search on Case Decisions, so you get a feel for how the Ombudsman operates. What they expect to see. And when they come out on the side of the Homeowner and when they don't. 

I also think this might reassure you that they are generally very fair in their decisions. Look for cases where the facts are similar to your own. There will be overlaps in the cases below.   Be rigorous and save what you are finding with a brief description in your file-name of what it covers. 

(You can see I have had to do this. It takes many hours but is absolutely INVALUABLE.

Do not stay too long on reading any case, as the system might freeze. Better to save the case and read it later.  When you do the search, keep a note of how far you got along the pages of cases, in case it does stop and then you will know where you got to.) 


Search on things like       "Subsidence Underpinning"   412 cases.... scan through them. 

" Subsidence Demolition"   46 Cases  

"Subsidence Claim taking too long"    265 cases. 

"subsidence structural engineers disagree"   274 cases. 
 
https://www.financial-ombudsman.org.uk/decisions-case-studies/ombudsman-decisions


=======================================================

5   To go to the Ombudsman process, you would need to file a Formal Complaint with your Insurer and give them up to 8 weeks to respond. Once they have given you a Final Response, you can go to the Ombudsman Service. 

Subsidence Complaints take quite a while to handle. Mine was about 6 months to Adjudication.

==================================================

Good luck Poster. I hope this helps you work out how to approach this.

If you have the funds, you might like to purchase this: I am afraid it's 70 pounds for non-members but is packed with info. 

 https://www.istructe.org/resources/guidance/subsidence/

ballamory

Annemos,

That was a really helpful post - many thanks!  I appreciate all your thoughts and your suggestions. Your idea of going through the past cases at the Ombudsman is a very good one - I will definitely do that.   There will likely be similar cases to mine, that may give ideas and help guide which way to turn.


It definitely worries me that the cause of the subsidence has not been identified, because it could cause any repairs to fail, or even a newly rebuilt house to be damaged.  The insurance company think it is vegetation, but their own arborists have disagreed with this on two separate occasions.  So I would worry under the "lasting and effective" concept, if we still don't know what is causing the problem.

It is tricky, because my structural engineers have not been paid for their work (the insurance company declined) , so they are naturally reluctant to comment further on the ongoing case.  So getting a more detailed technical explanation of why they think demolition is the only option could be tough, without paying myself for a further report.

I will give the matter further consideration.

Thanks again for the advice, and a Merry Christmas to you!

DullGreyGuy

ballamory said:
There have been discussions about taking this to some other body, either the courts, the insurance ombudsman, or some sort of arbitration service.   The courts are extremely expensive and risky, as I understand it the ombudsman is regarded as being in the pocket of the insurance companies, so may not be neutral.   The experts from my team and the loss adjuster have identical qualifications (MIStructE CEng), but are saying opposite things.   

The Financial Ombudsman has significant powers and originates from statute, its legally obliged to find "fair" outcomes and its second tier decisions are legally binding on the financial institution if the customer accepts it. It to such an extent that you pay the courts £42 and without even having a hearing you will get a court order that states what the ombudsman decided thus allowing you to move to other collection methods like third party debt orders. 

I've worked in financial services for over 20 years and have dealt with the ombudsman both as a consumer and representing my employer/client. I would argue they are fairly neutral but with a consumer bias. Take for example cheap home insurance which clearly states matching sets arent covered. You damage one tile in your kitchen floor, under the terms of the policy the insurer is liable for the cost of replacing that one tile, if the tiles arent made any more they'd have traditionally paid you what it would have costed. The ombudsman however decided that wasnt fair and so required the insurer to make a 50% contribution to the rest of the floor, its become such a routine decision from them that most insurers now state in their policy its full cover for the damaged parts and 50% cover for the remainder. 

Had that gone to court instead, the court would have reviewed the terms of the policy and most likely would have said the original offer to repair what was damaged or cash value when impossible to do so is inline with the terms and not a breach of any law. 

The ombudsman publishes the rate of complaints it upholds, it varies massively by the class of business 92% of PPI claims were upheld, 5% of credit broking. Within insurance Home Emergency has the highest uphold at 45% and Critical Illness the lowest at 15%, overall average is 38%. You could take that to mean they are biased towards the insurance companies or that some people submit daft complaints. Back in my Claims days we had 2 customers who took us to the ombudsman because of our choice of hold music which will have cost us about £1,000 even though the ombudsman didnt uphold either of them.

Bluntington88

I am currently going through an Obudmans’ subsidence Complaint and I have been lucky to have had the advice of Annemos. It is worth mentioning that in my Case, the compilation of the Complaint itself was a significant help in structuring my arguments and evidence (like yourself this has been going on for over 4 years). In the event of any future Court action, the FOS Complaint  stands you in good stead in that you can be seen as proactive, tenacious and articulate as well as having a valuable document to call on. 
Please get back to me if I can be of further help. 
This forum has been massively informative and supportive to me over the last year or so. 
Good luck 

DullGreyGuy

Bluntington88 said:

In the event of any future Court action, the FOS Complaint  stands you in good stead in that you can be seen as proactive, tenacious and articulate as well as having a valuable document to call on. 

If you have future court action you've either:

1) Won the FOS case in which case there is no stead, good or otherwise to be stood in, as its a simple process to convert FOS outcome to Court Order. There have been several attempts to get a judicial review of FOS decisions and almost all have failed. For example https://caselaw.nationalarchives.gov.uk/ewhc/admin/2023/1069 the banks got the High Court to agree the FOS had made mistakes in its judgement but the judge still dismissed their request for a review. 

2) Lost the FOS case in which case you're going to be on very thin ice with any subsequent litigation, I'm not aware of a single case where the ombudsman has said no but the court has awarded something. Sure you can point to the FOS case as using ADR before litigation to show meeting the spirit of the CPR but you're likely throwing good money after bad. 

Annemos

1) Won the FOS case in which case there is no stead, good or otherwise to be stood in, as its a simple
process to convert FOS outcome to Court Order. 

''''''''''''''''''''''''

Annemos

Sorry about that, the thing became blocked. I was unable to write anything after the quote! I must be incompetent! Reply coming up shortly to DullGreyGuy's quote.

Annemos

DullGreyGuy was saying that one does not need to go though a full Court Case, if one has won the FOS decision. Instead one can convert the FOS decision into a Court Order.

 I am most definitely not a legal expert, so decided to see what this is.
----------


 Here is a website that discusses this issue and it also gives the correct legislation number: 

https://debtcamel.co.uk/enforce-financial-ombudsman-decision/

--------


Also, here is the Government website that provides the correct Form and Instructions: 

https://www.gov.uk/government/publications/form-n322a-application-to-enforce-an-award

---------


Conclusion. I hope no Poster ever has to do this. But if one does, the Form seems to be completed in two different ways, according to whether one is .....

"Enforcing a Decision"     OR  "Enforcing a (ACAS?) Monetary Settlement". 

What if the FOS decision consisted of     both a    "Decision over certain actions that need to be undertaken (eg underpinning or further monitoring)"    PLUS   "A monetary Settlement"?   

Does one only have to tick the "Decision" box?  And one does not have to complete Sections 4 and 5, as that is just for ACAS Employee Settlements.  OR does one have to check both boxes??