Subsidence Property Insurance

Not only might it be difficult to raise a mortgage on a property that has been underpinned or suffered from the previous effects of subsidence, you may also experience difficulties in arranging insurance.

The Financial Ombudsman Service says that the subsidence insurance cases it sees are invariably complicated and regularly call for the input of technical data and expert opinion.

What is subsidence insurance?

What is subsidence insurance?

The complexity of insurance cases considered by the Financial Ombudsman Service largely stems from the fact that subsidence is a complicated problem affecting the foundations on which a property is built – it may be difficult to detect, require expert engineering advice, and prove expensive to remedy.

Subsidence may be caused by the shrinkage of clay soils on which the property is built, the escape of water from poorly maintained and fractured drainage and water supply pipes, past mining or excavation activities, or the settlement caused by the decomposition and compaction of rotting organic infill.

Underpinning is a reference to probably the most permanent and effective – but by no means the only – remedial action, which is also likely to prevent the problem in the future.

Because many insurers may make it difficult to arrange insurance where subsidence has been a problem in the past or where underpinning has been done as a result, subsidence insurance might be regarded as a niche product – in which specialist property insurers, such as ourselves at Specialist 4 Property Insurance, may be the favoured providers.

What does it typically cover?

What does it typically cover?

Subsidence represents a substantial risk with the potential for causing considerable damage and potentially the complete loss of a building.

Not only does subsidence insurance need to cover the cost of major repairs, therefore, but the possible need to completely reconstruct the property.

The problem is not only that some home insurers decline to offer cover against subsidence, but also that those who do, cover the cost of repairs only and not the expense involved in preventing the problem from recurring.

Once again, therefore, in order to be certain that the cover you buy is the cover you need, you might want to consult a specialist provider of subsidence insurance and one that is familiar with underpinning that has been done to remedy it.

Who is subsidence insurance suitable for?

Who is subsidence insurance suitable for?

If you live in an area which is vulnerable to subsidence, are intending to buy a property there or suspect that the problem may develop, you have two options:

  • the cheaper – but least secure – of which may be simply accepting the exclusion of this risk from your standard home building and contents insurance; or
  • to search for an insurance policy which includes subsidence cover – and either be prepared to pay a considerable additional premium for doing so, or making sure to arrange the cover through a specialist subsidence insurance provider who is likely to quote a more competitive rate.

The cover is likely to be suitable, therefore, for those property owners, or prospective property owners who suspect that subsidence may cause a problem sometime in the future or where the building has already been underpinned in response to a past problem.

Summary

Summary

Although subsidence and the possible need to underpin the foundations may be a nightmare risk for any property owner, subsidence insurance exists and may be arranged through a specialist provider of this niche product.

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