If you’re trying to obtain insurance for a property that has a history of subsidence, you will find you’re asked a number of extra questions about the history of the property.
You may also be asked to provide certain documents to help support the history.In this article, we will attempt to explain how these details help an insurer come to a decision.
Information is Key
Unless an insurer is able to put together a clear picture about what has happened in the past, then it is very unlikely any policy they arrange for you is going to include the subsidence peril.The number one priority is to ensure the situation has not only been put right, but also improved, so the chance of it reoccurring is reduced. This is sometimes known in the industry as mitigating a loss.
The main information you will need to have is as follows:
- When the movement happened
- What the cause was
- The severity of the damage, i.e. how much of the property was affected, along with an approximate cost if possible
- What the preventative measures were
- When the work was completed
It may be possible that until all of these questions are answered, you may find it difficult to find an insurance policy that includes cover for subsidence. If you are considering the purchase of a property, it is worth making sure you’ve collected this information from the current owners.
As subsidence claims can be a long and expensive process, there tends to be a paper trail that comes along with them. This is valuable for the insurers, as it provides written evidence of what has taken place previously, and is particularly crucial in giving them peace of mind that the preventative measures have been carried out to a sufficient standard. Some of the documents you may be asked about are as follows:
Certificate of Structural Adequacy
This is a document that is issued following the conclusion of an insurance claim, and will be provided by the loss adjuster. You are very unlikely to be given a Certificate of Structural Adequacy unless an insurer was involved.
The document, sometimes shortened to COSA provides a summary of the event in two or three 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 the work. Essentially, it answers all of the questions above.
It does not offer any assurances that the property is unlikely to move again or provide any guarantee. It is worth noting though that it is only issued after a period of monitoring (checking that the situation has not worsened). It is commonly monitored for 6 or 12 months, but it can be as short as 3, and some complex cases may need to be checked for several years before sign-off is issued.
Certificate of Completion
This confirms that the planned repairs, such as underpinning or piling, has been completed to an acceptable standard. It will detail who did the work, and the date it was signed off.
Like a COSA, it doesn’t offer any assurances that the property is unlikely to move again. It doesn’t confirm anything about the cause, or when the problem started, and is often considered too vague for insurance purposes.
Guarantee of Work
This document is typically issued by the contractor that carries out repair work to the property. It tends to apply when preventative measures like those mentioned above are put in place.
This offers a guarantee on the work within a certain timeframe, often 10 years. This means that if the design or the work itself is unsuccessful, leading to further damage, the company will have to come out and put it right at its own cost.
Even if the guarantee period has expired, a company showing that level of confidence in their work is a sign that repairs were completed to good order.
Full Structural Survey/Subsidence Report
While the two documents are different, i.e. the first covers the whole property, the second only comments on previous subsidence, they are often accepted by the insurer in a very similar way.
They both require an inspection from a qualified and accredited structural engineer who will determine any previous or ongoing subsidence issues and will comment on the risk of future movement. It will include recommendations as to how it can be prevented if more could be done.
If a Full Structural Survey comes up clear, and was carried out within the last couple of years, it is likely to give a potential new insurer a lot of confidence when making their decision.
Once the facts have been considered, and in a lot of cases, once suitable documentation has been provided, an insurer that specializes in subsidence insurer is likely to offer subsidence cover to you.
If it has been recent, i.e. within the last 1-2 years, or if your property has suffered from more than one occurrence of movement, then this may not be possible right away. For example, the company may ask for more time to pass or may ask for further documentation to be provided.
Often, additional terms may apply, such as an increased subsidence excess.