Homeowners with subsidence claims can not change insurers

Even if the subsidence claims was decades ago and your property has been underpinned, but new providers don’t want to know that.

Homeowners have claimed for subsidence on their insurance, they usually have to pay expensive premiums for existing providers because new insurers will not offer them cover.

For a case of Mary Pope, 72 years old, she lives in Cardiff, she was in despair that they cannot change to a different insurer, even though the subsidence claim they made many years ago. Mrs Pope pays £1,100 for home insurance with Halifax for her four-bedroomed Victorian terraced house since 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.”

And Ben and Alison Hoare also have the same case, they live in Durham, they are also trapped with their insurer RIAS, even though they switched 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, but we did make a claim in respect of one of our children at university in 2006. Nothing since.”

The couple bought a cover from RIAS in 2013, it costs £771 for both buildings and contents insurance. In 2014, the premium rose to £873. And last year, Mr Hoare was given a renewal quote of £1,135, but then, he was offered cover at £870.

Mr Hoare 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, it is aware that because of previous subsidence claim, so he cannot shop around or change to new insurers. 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 refuses that subsidence claim 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”.

In fact, even if your property has been underpinned and the subsidence problem resolved, insurers will usually consider it high risk, particularly if repairs were made relatively recently. This is not only mean steeper remiums, 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 warn 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.”

According to the Association of British Insurers (ABI), despite the challenges that homeowners affected by subsidence face, a subsidence claim in the past doesn’t necessarily mean you can’t switch providers.

Malcolm Tarling, a spokesman for the ABI say “This will depend on the nature of the claim and repair work. 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.”

And the British Insurance Brokers Association (Biba) says it has several members that can help with subsidence risks. To find a broker, you can use Biba’s ‘find a broker’ service on 0370 950 1790, or visit www.biba.org.uk.

Brokers can help find insurance cover include Higos Insurance, Adrian Flux, Endsleigh-owned Woodstock Insurance Brokers and Bureau Insurance Services. For example, Bureau charges £199 to carry out an inspection of your property and aims to provide comprehensive buildings cover with a subsidence excess starting at £2,500. Even if cover is not offered, 80% of the survey fee will be refunded.

The easiest way to shop around for home insurance is usually through a comparison website such as uSwitch.com, Moneysupermarket.com and Gocompare.com. It is useful to help you find a good deal for your home.

However, if you have made a subsidence claim in the past, so the quotes you receive to be both limited and expensive.

Kevin Pratt, consumer affairs expert at Moneysupermarket.com, says: “We have no automatic restriction on providing quotes for people who have made subsidence claims in the past. Each insurer we work with tells us what they will and will not quote for, and many ask to be filtered out of quotes that include a subsidence claim. This means that running such a quote will probably throw up fewer insurers than would otherwise be the case, which simply reflects the market.”

Website Gocompare.com gave an example buildings insurance quote for a three-bedroom semi-detached home worth £300,000 in Ilford, Essex, owned by a married couple aged 35, who were both accountants with no children. It then ran the same quote again, adding a £10,419 claim for subsidence, according to the site’s data, is the average subsidence claim.

Admiral offers the cheapest annual premium, based on nine years’ no claims bonus and no history of subsidence, was £101. But once the subsidence claim was added, the cheapest quote was £303 from InsureItAll, three times higher than the cheapest quote for the property with no subsidence claim. It is true.

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