Introduction
- Insurance for a building that has been underpinned or has suffered
previous structural movement can create a great deal of problems for
either existing owners or new buyers of a property. Prudent advice
would be that before you purchase a property that has been underpinned
or has suffered movement, to ensure that you can obtain adequate
insurance cover.
There are two main reasons for this. To borrow
money to finance the purchase of a property, you are going to have to take out
insurance. A lender will require you to confirm that any policy you buy includes
the peril of subsidence, a peril that almost all insurance companies will want
to exclude if there has been any previous movement, or the property has been
underpinned. Secondly, without adequate insurance , you are less likely to be
able to sell the property. If you have sourced an underpinned building insurance
policy, you may find that the insurer will continue cover for the new purchaser.
If you suspect you building is suffering
subsidence, there are a number of tell tale signs, for example, hairline cracks
may appear in the building, although this is not unusual in new properties, it
can be one of the first signs of subsidence in older houses. Diagonal cracks
should be monitored closely as should cracks which suddenly appear in
plasterwork, both inside and out and in brickwork. Doors and windows that do not
open and close properly should also be watched out for.
Insurers are traditionally reluctant to offer
cover for buildings that have been underpinned or have suffered movement as the
cost of remedial work , can be very expensive. Insurers have developed questions
on their proposal forms which ask for detailed information about Trees (within
influencing distance , can be a major factor ) previous subsidence in the
property or surrounding area and any existing evidence of movement, such as
cracks in doors, or windows not fitting properly.
The Association of British Insurers recommend
that where a building has suffered from subsidence, the insurance company "in
situ" at the time of the loss, is retained to cover the risk for the new
owners. This is usually, the easiest and most practical solution for new owners
of underpinned buildings. Insurers may be reluctant to continue cover but it is
established procedure subject of course to underwriting considerations. Further
information on this can be found on the Association of British Insures website,
which contains valuable consumer information.
Consider making the previous insurer the first
port of call to insure your underpinned building. The vendor , via their
solicitor will usually be only to pleased to assist you, after all, they are
attempting to sell you their home and will want to make things as easy as
possible. Sometimes it will not be possible for the existing insurer to continue
cover for you, this happens for a variety of reasons, you may be purchasing the
property to secure a rental income and the existing insurer does not offer buy
to let insurance, or you may fall outside of their standard acceptance
criteria. Obtaining insurance for an underpinned building should be attempted
as early in the sales process as possible. It can sometimes take a good deal
of time to source a quotation and it is doubtful if your mortgage provider will
release funds until such time as insurance cover is in place.
Before proceeding with a purchase, think about
the long term implications, will the fact that the property has been underpinned
, affect the valuation. Will you be able to source insurance now and in to the
future ?
Offers of insurance for underpinned building
insurance need to be considered carefully. You should be notified of any terms
and conditions and make sure that you are fully aware of the type of cover on
offer. Some insurance companies are prepared to offer cover on properties that
have been underpinned but with a subsidence cover exclusion clause or a
pre-existing exclusion clause. These type of policies are not a real solution as
both will leave you without adequate cover if subsidence happens at the property
again.
What is subsidence? - Most
homeowners have heard of subsidence but many are unsure as to what it actually
is. Subsidence is classed as the downward movement of the ground supporting a
building. Sometimes only part of a building is effected by the movement,
sometimes all of the property. Structural problems can become acute when
different parts of the building move in different directions.
Insurance policies tend to cover three separate
perils relating to movement;
- Subsidence- The downward movement of the
property.
- Landslip- The movement of ground down a
slope.
- Heave- The upward movement of ground
supporting a property.
There are many causes and factors that can help
cause movement in a property.
- Soil Type- Clay soil is more likely to
be a factor in causing subsidence over any other soil type. It can shrink
during periods of dry weather , then expand again when moisture returns.
- Trees & Shrubs- Many insurance
proposal forms now ask about the number of Trees & Shrubs within influencing
distance of the property, roots from vegetation are a major cause of
subsidence in property.
- Drainage Problems.- Cracked and
damaged drains, may result in excess water leaking in to the ground, this can
lead to problems.
- Old Mine Workings.- Old mine workings
or underground tunnels have been shown to cause subsidence.
To help avert subsidence a program of
maintenance should be undertaken at the home. Water disposal systems should be
kept in good condition and all trees and shrubs regularly pruned to prevent
excess growth. Different trees and shrubs have different water needs and before
planting any new ones, information should be obtained on the likely impact on
the soil.
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