Possible subsidence - possible future extension - insurance cover

Yorkie1

I am hoping at some point in the next few years to do an extension to my semi-detached house (out at the side and back, single storey, and into the loft). I think I may have read on here that some insurers will cancel an insurance policy during major renovations such as this, leading you to have to reapply afresh once the work is completed.

Separately, I suspect I may have subsidence -  there are cracks appearing in walls. Obviously, this would need to be notified to the insurers for investigation etc. I think I have also read that insurers are obliged to continue an insurance policy after a subsidence claim has been dealt with (as long as they stay in the market for such policies, that is).

I have assumed (not based on anything specific) that it would be best to get the subsidence investigated and dealt with first, before doing anything else on the house.

I am wondering how the two above scenarios may dovetail?

For example, if I have a subsidence claim dealt with first, then will any cancellation of cover during an extension mean that the original insurance company has grounds to refuse to resurrect cover afterwards?

Any thoughts would be gratefully received. Insurance is with Direct Line, if that is relevant.

I am entirely happy to be corrected on any assumptions or understanding I've set out!

Woodstok2000

We paid a little bit extra during building works to continue with the same policy throughout - all we had to confirm was who was doing the work.

MyRealNameToo

Yorkie1 said:

I am hoping at some point in the next few years to do an extension to my semi-detached house (out at the side and back, single storey, and into the loft). I think I may have read on here that some insurers will cancel an insurance policy during major renovations such as this, leading you to have to reapply afresh once the work is completed.

Separately, I suspect I may have subsidence -  there are cracks appearing in walls. Obviously, this would need to be notified to the insurers for investigation etc. I think I have also read that insurers are obliged to continue an insurance policy after a subsidence claim has been dealt with (as long as they stay in the market for such policies, that is).

I have assumed (not based on anything specific) that it would be best to get the subsidence investigated and dealt with first, before doing anything else on the house.

I am wondering how the two above scenarios may dovetail?

For example, if I have a subsidence claim dealt with first, then will any cancellation of cover during an extension mean that the original insurance company has grounds to refuse to resurrect cover afterwards?

Any thoughts would be gratefully received. Insurance is with Direct Line, if that is relevant.

I am entirely happy to be corrected on any assumptions or understanding I've set out!

The ABI Guidance is not that strong, members are supposed to continue to offer cover whilst you continue to meet their underwriting criteria (ignoring subsidence). If you cease being within their appetite they should assist you looking elsewhere but they can't force a competitor to take you on. 

Note that the guidance applies to the actual insurer, unfortunately in this day and age people often dont understand the supply chain of their policies and who the insurer is -v- who are intermediaries. Things get complex, as another poster here found out, if your actual insurer doesnt write any direct business and the MGA you were insured via switches insurer. 

The one positive is that the FOS tends to see this as "industry practice" and so often forces non-ABI members to act similarly 

Annemos

Good afternoon Yorkie1. I am sorry to see you may have this issue.

Having had a Subsidence claim, one of the most stressful aspects is the Insurance Renewal every year. And that continues after the Claim is finished. 

I can only speak personally, but I would not want to do anything to my home, that altered the basic risk profile of the property for their Underwriting criteria. 


One sees cases on the Ombudsman website, where a homeowner changes from personal use to renting out the property. This can result in a Complaint, when the Insurer determines the property no longer meets the Underwriting criteria, as they do not insure Rental Properties, for example. 

I am attaching an FOS case, here, that discusses Underwriting Criteria in a different set of circumstances. This says....

"and UKI would have been required to offer Mr W a renewal in line with the above, under the Association of British Insurers (ABI) guidance on continuation of cover following a subsidence claim. But I should point out that any offer of cover UKI makes to Mr W would still be subject to its remaining underwriting criteria – and I think that’s fair."

https://www.financial-ombudsman.org.uk/decision/DRN-3607415.pdf 


If you do have to open up a Subsidence Claim, then all you would be able to do, is ask if they would continue to cover you, at the point that you would actually want to start the extension. If they said no, then you would have to weigh up whether the loss of the ongoing cover with that same Insurer is worth it.   

(Another thing to note: it is by no means guaranteed, but some Insurers do offer to give a policy to prospective purchasers/new owners of the home, if the original Homeowner who made the Subsidence claim, decides to sell. You would potentially lose the option of that benefit, if you had to change Insurers,) 

Yorkie1

Thanks everyone. I may get my own structural  engineer around to advise on what may be going on, before making any further decisions. Appreciated.

dunstonh

Separately, I suspect I may have subsidence -  there are cracks appearing in walls. Obviously, this would need to be notified to the insurers for investigation etc. I think I have also read that insurers are obliged to continue an insurance policy after a subsidence claim has been dealt with (as long as they stay in the market for such policies, that is).

Is it subsidence?    The majority of those suspecting subsidence are actually suffering movement.

We get new cracks most years, as do most houses in our parish (and surrounding parishes), especially in dry years.  Last year was a drought year. So, new cracks would not be unusual.

Some houses are just prone to them.  e.g. older buildings with shallow foundations built on clay where the mortar is getting on a bit and weakened. 

So, it's not necessarily as scary as you think.    Our structural surveyor said it was normal and just needed routine maintenance (repointing in places and using helifix ties).    What then tends to happen is that those areas that have been repointed and had ties put in are rock solid going forwards but new cracks open on a weaker spot.  So, those get repaired, and so on.   

It can help to identify potential causes that can make it worse.    We had several willows that were too close to the house.  Those have gone.   We also had a misaligned downpipe, which was fixed. And a large rabbit burrow next to the house which was filled.   This year, we are taking down an Oak and an Ash tree to reduce the draw on the water.    

None of those things were reported to the insurer, as they are all low-grade cracking handled by routine maintenance, and the insurer knows the property has had hundreds of years of movement and hundreds of years of maintenance around that.

So, don't worry unnecessarily.    It may be simple and expected.   Maybe get a local structural engineer out to review the cracking.   There is a grading system they use, and ours was category 2, which warned that increasingly hot summers would lead to more movement.   The insurer had a copy of the report and accepted it, and expects us to continue doing the maintenance, which we have.

Yorkie1

Thanks dunstonh. Much appreciated.

Annemos

Some more random points, Yorkie1.  dunstonh remarks work in some cases, but not in others. 

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https://bregroup.com/web/bre-group/insights/assessing-cracks-in-houses?p_l_back_url=https%3A%2F%2Fbregroup.com%2Freports

Also see page 31 here of this excellent Guide.

https://www.subsidenceforum.org.uk/pdf/Structural%20Movement%20in%20Buildings.pdf



The problem arises if the Subsidence movement is progressive and will get worse if a remedy is not found for the cause. My damage was also a 2, but it would quicky have gone to a 3 if it the trees had not been dealt with. 

If the solution to the cause, for example, involves Council Trees or Trees with a Preservation Order, then the remedy may well need the help of an Insurance Company to deal with 3rd Parties and to bear the Cost.

(In my own experience, it was impossible to deal with a Council as a Homeowner. One needs hard technical evidence that the Trees are doing the damage, and I did not have the knowledge of how to get that evidence, what such evidence actually is, or the money to be able to pay for it myself. Without such evidence, the Council will ignore a Homeowner.)

Also, neighbours may decline to address the problem if the trees belong to them and then you will likely need the help of your Insurer to get some action. And if the neighbours do not take down the Trees (they can refuse), then the Insurer might have to consider other remedies like Root Barriers or even Underpinning. 


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Another thing to be aware of is this. The Insurance Companies look into how long cracking has been there. If a claim is opened, they look at recent homebuyer reports. They look at Google Earth. If they decide the Subsidence has NOT been going on during their current Policy, they can try to decline the claim and especially if they were not the Insurer in prior years.  (They can try to send it back to the previous insurer.)

They are also assessing whether, when you took out the current Policy, did you answer truthfully, any questions about cracking, etc etc.? If they discover you were not doing full disclosure, they can try to void the Policy, saying, we would not have offered you a Policy, if we had known about the cracking.   There have been FOS cases, where the FOS has had to review, whether it is reasonable for the Insurance Company to say that the Homeowner should have known cracking was there and should have declared it. (We have also had instances of this on this Forum.) The Insurance Company will be closely looking at cracks to judge how long they have been there and how promptly they have been reported. 


What does this mean for you? In my opinion, you are absolutely correct to get a Structural Engineer in, to look at what is happening. But do try to ensure that you do not leave it too long, so you do have the answers before you have to correctly respond to those cracking questions at your next renewal. Any doubt at all on any of these aspects, it is possibly better to open up a claim before the Renewal.

Also go round your house in detail and take photographs of where the cracking is both inside and outside and also make a note if there are matching location cracks both inside and outside.  Are there large trees or bushes close by? Are their drains and water main nearby etc etc. 

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Another note, if one opens up a Subsidence Claim with the Insurer and it is later determined it is NOT Subsidence, then the FOS usually requires that the Insurance Company does NOT enter a Subsidence Claim on the CUE Central Insurance Database. The Insurer will be expected to characterise it as something else, so the homeowner does not suffer the negative consequences of having had a Subsidence Claim registered on the CUE. 

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I will not get into the issues of Heave here, which is the opposite of Subsidence. Before any Tree is taken down, a Heave assessment should be done. Typically, one might experience Heave, if a Tree is taken down that was older than the home. 


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Good luck, I do hope you just have a dunstonh scenario, Yorkie1

Yorkie1

Thank you Annemos. Really appreciate your extra comments.

subsidenceconsultant

Sound advice from Annemos. I have clients who have had their insurance voided from inception for failing to disclose cracks - either at inception or at renewal. I even have one that didn't disclose because she was told (by a surveyor in a pre-purchase report) that the cracking was insignificant. The insurance question asked had she got any significant cracking, so she understandably said no. It turned out that the cracking was ongoing subsidence but she had no reason to believe that when she completed the insurance form. Still the insurer voided her policy. Yes she is challenging their decision, and also suing her surveyor, but that doesn't help her current predicament of being uninsured and struggling to get cover anywhere.

dunstonh

 The insurance question asked had she got any significant cracking, so she understandably said no. It turned out that the cracking was ongoing subsidence but she had no reason to believe that when she completed the insurance form. Still the insurer voided her policy. Yes she is challenging their decision, and also suing her surveyor, but that doesn't help her current predicament of being uninsured and struggling to get cover anywhere.

I would have thought with that wording, the FOS would side with the consumer.  i.e., the question asks "any significant cracking" and the surveyor says it was insignificant.      The FOS would typically say that the consumer is not the professional, and the question was answered correctly in the way it was asked.

I doubt she will get far suing the surveyor.  They typically include several backside-protecting statements in their reports.