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Insurance disputes involving subsidence

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Subsidence is probably one of the most serious and technically challenging risks to face your home.

It is hardly surprising that the settlement of subsidence claims may also be some of the most expensive that insurers are obliged to handle. As we reported back in August, there has been a surge in the number of subsidence claims – which in turn typically means that the cost of building insurance (and its associated subsidence insurance) is rising at a faster rate than home contents insurance. 

Insurance disputes

Against this background, it is also little wonder that consumers’ disputes with insurers over subsidence issues are also likely to arise.

The fact is confirmed by the Insurance Ombudsman (a member of the official Financial Ombudsman Service) who has previously described subsidence insurance claims as typically taking longer to settle than many others and are the subject of technically challenging disputes.

Delays in settling claims

The Insurance Ombudsman explains that many complaints are received about the time taken for insurers to settle claims. 

The reasons for delay are largely in the nature of subsidence issues. When a claim is reported, for instance, an insurer needs to investigate:

  • expert analysis must be made of the soil on which the foundations are built;
  • the consistency and make-up of that underlying soil has to be analysed; 
  • the nature of the foundations themselves must be investigated; 
  • explanations must be found for what triggered the movement of the foundations and the building they bear; and
  • once those professional investigations have been concluded, options for repair must be considered.

Throughout this lengthy and involved process, the Insurance Ombudsman concedes that some insurers and the relevant professionals are not as good as they might be in keeping their clients fully informed – the latter feeling that they are too often kept in the dark about the handling of their subsidence claim.

Definitions of subsidence

In addition to frustration about delays – during which they are often kept in the dark – complainants also take issue with insurers’ very definition of subsidence.

The Insurance Ombudsman refers to those cases in which the insured makes a subsidence claim, but the insurer dismisses the loss or damage as arising from “settlement” instead. Settlement is likely to occur in any newly-constructed building as its weight compresses the ground on which it is built.

But unless the insurance policy explicitly defines subsidence – and distinguishes it from settlement – both phenomena ought to be regarded as grounds for a subsidence claim, argues the Insurance Ombudsman.

Confusion arising from a change of insurers

Complications may also arise when a property owner has recently switched insurers and disputes arise as to whether the original, previous insurer should handle the claim or the new insurer.

Thanks to the Domestic Subsidence Agreement arranged between the Association of British Insurers (ABI) and participating insurers, however, rules are now established as to which of the insurers needs to assume responsibility for handling the claim, or whether one or the other must contribute to the costs of settling the claim. 

Arranging your subsidence insurance 

Given the potential for complications arising from any subsidence claim you may make, you might want to consider arranging your subsidence insurance through us here at UKinsuranceNET, where our knowledge and expertise may be brought to bear in helping you negotiate the minefield that your claim may become.