Homeowners Who Made Subsidence Claims Are Unable To Switch Insurers.
Homeowners who have claimed for subsidence on their insurance are stuck paying expensive premiums to existing providers because no other insurers will offer them cover.
Mary Pope, aged 72, who lives in Cardiff, is among many people who have contacted the Guardian in despair that they cannot move to a different insurer, even though the subsidence claim they made was many years ago.
Mrs Pope pays £1,100 for home insurance with Halifax for her four-bedroomed Victorian terraced house, which she has lived in since 1977.
She says: “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.”
Ben and Alison Hoare, who live in Durham, also find themselves trapped with their insurer, in this case RIAS, even though they moved to the company following a subsidence claim.
Mr Hoare, 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 insurance renewal in 1994 and had to go elsewhere. Our last claim on the house was in 1994.
Mr Hoare, a retired solicitor, says he is less concerned about increases in premiums and more about the fact he feels he is “held over a barrel” by his insurer, as it is aware that because of previous subsidence, he cannot shop around. He adds: “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.”
RIAS denies that subsidence has been a factor in the premiums Mr Hoare has paid, because his home was underpinned more than 25 years ago. It says that “if any price increases are applied, they are only done so after careful consideration”.
However, even if your property has been underpinned and the subsidence problem resolved, insurers will usually continue to consider it high risk, particularly if repairs were made relatively recently. This is likely to not only mean steeper premiums, but also a hefty excess for future subsidence claims.
A spokesman 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.”
Some insurers are upfront about the fact that they won’t cover properties that have suffered subsidence. Alan Gairns, product manager at Allianz Insurance says: “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.”
Despite the challenges that homeowners affected by subsidence face, a subsidence claim in the past doesn’t necessarily mean you can’t switch providers, according to the Association of British Insurers (ABI).
“Much will depend on the nature of the claim and repair work,” says Malcolm Tarling, a spokesman for the ABI. “A good broker may well be able to help. 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.”