UK House Insurance - The Thorny Subject of Subsidence

Let me say at the outset, it is going to cost you. There is a serious excess, so you will be made to pay the first piece of any claim. The majority of UK policies now impose an excess of 1,000 but you can shop around for less. It's best to have some money put to one side!

Second, your claim will take months, if not years to resolve. There is a lengthy list of exclusions. Here is a likely list. If one or more of these apply, you could well be without any help from the insurer.

All the outside gates, decks, paths, patios, drives and so on are not covered unless your main buildings or outbuildings are damaged..

Subsidence as a result of coastal erosion.

Movement of solid floor slabs unless foundations beneath outside walls are also damaged by the same cause

Settling of newly erected buildings or the settling of newly worked ground.

Then there are the extras that apply to standard cover. This is where you actually get some accidental damage cover with your standard policy.

Underground service pipes and cables. Apart from wear and tear, you are pretty well covered for any damage you are responsible for as the property owner.

Sanitary fittings, windows etc. Again you are covered against accidental damage to your built in ceramic hobs, bathroom fixtures and all windows in the building. Beware, that there could well be a clause later on into the policy that will restrict what you can claim for. Each item is treated as an individual item, not as part of a suite. Thus, if your wash basin is accidentally damaged, don't wait for your insurance company to pay out for a full new bathroom suite!

Alternative Accommodation. This can be a very important benefit if it becomes dangerous or impossible to stay in your home. Your insurer will pay for you to be put up elsewhere. This might be a local hotel or possibly the extra cost to family and friends if they can give you temporary accommodation. At least one insurer will also pay for your pets to go into boarding kennels if necessary. The policy might also provide for either loss of rent, if you are a landlord, or payment of rent due. This could be limited to, a sum insured which is normally around 20% of the total sum insured for your buildings cover.

By the way, if you sell your property, the purchaser can enjoy the benefit of the cover up to the date of completion provided they have no cover of their own in force at the time.

BASIS OF SETTLEMENT - All reputable policies will provide for 'reinstatement'. In other words they are offering 'new for old'. The House will be restored with new materials and if the whole structure is beyond economical repair, it will be completely restored with new materials and no payments from you (with the exception of any excess due). The latest building regulations might mean increased rebuilding expenses. Not a problem - but it only applies to the damaged part of the building. Demolishing, debris removal, shoring up etc are all covered as are professional fees such as architects and surveyors, legal fees and charges for estimates, plans and so on.

Insurers prefer to have control of the matter so if cracks start appearing in your walls, report it to them immediately. If you go and instruct your own surveyor they might well recommend drastic measures to prop up your house that might not be required. You would find yourself in dispute with the insurance company.

There are countless issues that can arise during a subsidence claim. Because of the length of time that these claims can take, things such as trying to sell your home, trying to change your insurer and so on are all fraught with anguish. It would take a book to clarify them all. One that is worth mentioning is that if you have changed insurance companies, the previous company might be called upon to make a contribution to your claim under the A.B.I. Domestic Subsidence Agreement. This is to prevent disputes between insurers as to who pays for what. It should not affect you at all.

But what happens when an underground pipe has leaked and this has led to movement and thus subsidence What insured peril should apply and what excess would you have to pay Do your best to demonstrate that the loss should be dealt with by the the underground services peril. That way you are not required to pay the imposed excess of a subsidence claim. It is all down to what insurers call the 'proximate cause'. You must attempt to prove that the proximate cause of the damage is the burst or leaking pipe.