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How insurers underwrite subsidence risks

A number of factors make up the decision making process that an insurance underwriter goes through when dealing with a non-standard risk, such as subsidence insurance. Information is key, and the more specific you can get with the details you provide, the easier it is for them to apply the correct rate and terms, getting you the cover you need.

How insurers underwrite subsidence risks

How insurers underwrite subsidence risks

The single biggest priority when an inssurer looks to underwrite subsidence risks is to make sure that steps have been taken to prevent the property from suffering the same damage again in the future. If the situation hasn’t been improved (sometimes known in the industry as mitigating the loss) then they are likely to exclude subsidence cover entirely.

Obviously no home owner wants to sustain damage to their property, and by the same token a home insurer will be happier if they are dealing with less claims. Taking preventative measures to stop the same thing happening again is a great way to insure all of your insurance requirements are met.

If you’ve suffered from subsidence in the past and are approaching companies for insurance, they will always want to know:

  • When the movement happened
  • What the cause was
  • How severe the damage was
  • What the preventative measures were
  • When the work was completed

In the case of subsidence in particular, you will often be asked to provide documentation that supports the bullet points above, especially in respect of preventative measures. Some of the documents available are:

Certificate of Structural Adequacy

This is a document that is typically issued following the conclusion of an insurance claim, and will be provided by the loss adjuster that handled it at the time.

The COSA provides a lot of useful information, and summarises an occurrence of subsidence in just a few pages. Some key details include the date of inspection, the date the certificate was issued, the cause, the preventative measures that were taken, and the contractors who carried out that work.

It does not offer any assurances that the property is unlikely to move again, or provide any guarantees to the work.

Guarantee of Work

This document is typically issued by the contractor that carries out repair work to the property, and often applies when a preventative measure is put in place, such as underpinning, or Helibar installation.

This offers a guarantee on the work within a certain timeframe, often 10 years, but can be longer or shorter. This means that if the work they carried out fails, and damage occurs again, the company will have to come out and put it right at their own cost.

Even if the guarantee period has expired, the fact that a company is so confident in their work that they will foot the bill if it fails still gives good assurance to an insurer that preventative measures have been completed to a high standard.

Certificate of Completion

This confirms that the designed work, such as underpinning, has been completed to an acceptable standard. It will detail who did the work, and the date it was signed off.

It can sometimes detail any monitoring that was carried out to ensure that the work was complete.

Like a COSA, it doesn’t offer any assurances that the property is unlikely to move again. The main differences are that it doesn’t confirm the cause or the reason the work was carried out, so it is often too vague.

Full Structural Survey/Subsidence Report

Although two different documents, carrying two different price points, these can be treated similarly in respect of insurance. They both come about as a result of a qualified and accredited structural engineer inspecting a property to determine any previous or ongoing subsidence issues, as well as considering the risk of movement occurring in the future. If there are concerns about further instances of movement, it will include recommendations as to how it can be prevented, i.e. the remedial action mentioned in the first bullet points.

A clean bill of health on a recent full structural survey is likely to improve your chances of getting suitable subsidence insurance in the future.

As specialists in subsidence insurance, GSI Insurance Services (Southern) Ltd are well placed to advise you on your subsidence requirements, even if you don’t have all of the relevant information together yet. We understand how companies underwrite subsidence risks, and can help you to prepare. Give us a call on 0800 612 9376 or click Get a Quote to fill in our online form.

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