Standard UK home insurance policies provide cover in respect of loss or damage to buildings as a result of subsidence heave or landslip, this is a valuable cover as the costs of rectification can be significant. Policyholders maybe concerned as to what happens if they move their insurance to another insurance provider and then subsidence damage becomes apparent at the property.
Why do subsidence claims present an issue when moving home insurance provider?
For most of the risks that a householder faces the actual time when the damage or loss occurred is easily identifiable and hence provides no problem to the insurance company in identifying under which policy the property was insured at the time of the loss. The situation with subsidence damage is somewhat different. Evidence of subsidence can occur immediately in one notable event or more commonly it can occur over a period of time with the visual signs of the subsidence not being immediately apparent.
This could lead to insurance companies suggesting that the “insured event” occurred sometime previously perhaps when they were not the insurer of the property.
If I have changed insurance company who will pay for any subsidence claim?
To clear up any potential arguments over which insurer is liable the Association of British Insurers ABI, of which UK insurance providers are members has in place a Domestic Subsidence Agreement that dictates wcih insurer is responsible for dealing with any subsidence claims. In short;
- Claims occurring within 8 weeks of the change of insurance company are handled by the previous insurer
- Claims occurring between 8 weeks and 1 year of the change of insurance company are handled by the existing insurance company and paid for on a 50/50 basis between the current and previous insurer
- Claims occurring after 1 year are handled by the current insurer that also bears the full cost of the claim. Unless of course the insurance has been moved to another carrier in which case the previous rules apply again.
Exceptions to the Domestic Subsidence Agreement
It si not perhaps an exception per se but on occasion a policyholder may report the signs of subsidence damage to an insurance company and upon investigation it is decided by both parties not to undertake any remedial works or rectification at that time, perhaps when the damage is minor and the process of rectification would cause great inconvenience. In these cases an insurance company can admit liability in respect of the claim on the understanding that if the situation deteriorates it will be responsible for the claim.
Are subsidence claims caused by fracking covered by insurance?
This is an issue that is causing some concern in the UK and a lot of incorrect information is being circulated regarding this matter. Our update on fracking will hopefully answer any questions you may have.
If you have any further questions about subsidence insurance or any other aspect of your home insurance policy please contact us directly.