Property owners who have previously claimed for subsidence on their home insurance are stuck paying high premiums to existing providers, as other companies will not offer them cover, found a study by The Guardian.
So what can landlords do?
Mary Pope, 72, lives in Cardiff. She cannot move to a new insurer, despite the subsidence claim she made occurring many years ago.
Mary pays £1,100 for home insurance with the Halifax on her four-bedroom, Victorian terraced house, where she has lived since 1977.
She explains her situation: “I have experienced annual rate hikes and have only tried to change insurers in the past four years, since I was widowed. But I was unable to proceed because I declared that my house was flooded in 1979 – never since then – and cracks in the walls revealed subsidence in 1999, which was dealt with by my then and current insurer, Halifax.”
“It seems I have no option but to remain with it, as I have found no other company prepared to insure my house,”1 she adds.
Ben and Alison Hoare, from Durham, are also stuck with their insurer – RIAS – despite moving to the firm following a subsidence claim.
Ben, 68, says: “When we bought our house in 1983, we were aware it had subsidence and, following an engineering report, we had the necessary underpinning carried out as we found it lacked foundations.
“Following a series of claims, we were refused an insurance renewal in 1994 and had to go elsewhere. Our last claim on the house was in 1994, but we did make a claim in respect to one of our children at university in 2006. Nothing since.”
The couple was offered cover from RIAS in 2013, costing £771 for combined buildings and contents insurance. In 2014, the premium increased to £873. Last year, Ben was given a renewal quote of £1,135. After challenging the high price, he was offered cover for £870.
Ben, a retired solicitor, insists he is less concerned about increases in premiums and more about the fact that he feels he is “held over a barrel” by his insurer, as it understands that due to previous subsidence, he cannot look elsewhere.
He continues: “The problem is that as soon as you mention subsidence, insurers do not want to know. I got an up-to-date surveyor’s report a few years ago confirming everything was fine, but it has made no difference.
“I have tried pointing out that our house is less likely to subside than a house that has not been underpinned, but when the box labelled subsidence is ticked, they are not interested. This leaves me at the mercy of my current insurer, because it knows it will be difficult for me to change.”1
RIAS has denied that subsidence was a factor in Ben’s premiums, as his property was underpinned more than 25 years ago. It notes: “If any price increases are applied, they are only done so after careful consideration.”1
However, even if your property has been underpinned and the subsidence issue resolved, insurers will normally still consider it high-risk, particularly if repairs were made relatively recently. This is likely to not only mean high premiums, but also a large excess for future subsidence claims.
A spokesperson for Halifax says: “A customer in a high-risk subsidence area may have their premium adjusted for the extra risk posed. While underpinning and other remedies will rectify the symptom, it does not guarantee that the subsidence risk has been reduced or mitigated. The house will still be on a clay subsoil, a tree may not have been removed, a drain not repaired, or the property may still be in a mining area.”1
And some insurers are frank about not offering cover for properties that have suffered subsidence.
The Product Manager at Allianz Insurance, Alan Gairns, states: “Subsidence claims can be expensive, and if there has been one claim, it can lead to further claims in the future. Because of this risk, we would not quote for a property that had suffered subsidence, but usually the existing insurer will offer to provide cover.”1
However, despite the challenges that these homeowners have faced, a past subsidence claim does not necessarily mean you can’t switch providers, according to the Association of British Insurers (ABI).
Malcolm Tarling, a spokesperson for the ABI, explains: “Much will depend on the nature of the claim and repair work.
“Insurers will always take into account the expertise of surveyors and structural engineers regarding the nature of the problem, any underlying causes and the likelihood of future problems.”1
Indeed, here at Just Landlords, if you have a rental property that has previously suffered from subsidence, you must provide a satisfactory structural report that is no more than two years old.
However, if your property has previously been underpinned, we would be unable to provide subsidence cover.