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11-10-2011

Subsidence insurance claims: Are you covered?

Insurance can be a minefield as far as subsidence and other types of ground movement are concerned. Within this article, we will look at what subsidence is, the potential issues policyholders may come up against when making a subsidence insurance claim, and what can be done in the event of a disputed or rejected insurance claim.

What is subsidence?

Before we get into the potential issues relating to subsidence insurance claims, it’s important to understand the definition of subsidence from an insurance perspective, as well as the other types of ground movements that can affect a property.

There are four main causes of ground movement, as defined by the Financial Conduct Authority (FCA):

Heave: The upward movement of the ground beneath a building, usually associated with the expansion of clay soils which swell when wet. 

Landslip: The downward movement of sloping ground, for example, a mass of soil or rock from a steep slope.

Settlement (also known as consolidation or compaction): The downward movement as a result of soil being compressed by the weight of a building within 10 years of construction.

Subsidence: The ground beneath a building sinks, pulling the property’s foundations down with it. Subsidence is most commonly caused by clay shrinkage; when water is extracted from clay, either as a result of extended spells of dry weather, or due to nearby vegetation sapping the moisture, the volume of the soil decreases, and consequently the ground level drops. Subsidence can also be caused by one or more of the following factors:

  • Tree roots
  • Escape of water
  • Poor ground conditions
  • Mining or fracking
  • Solution features (the erosion of the underlying soil resulting in an underground cavern)
  • Composting organic fill

Subsidence insurance claims: Rarely straight-forward

According to the Financial Ombudsman Service, common complaints relating to subsidence insurance claims include:

  • Insurance claims being rejected because the damage wasn’t caused by subsidence but by an uninsured event, such as settlement
  • Insurance claims taking too long to resolve
  • Lack of communication from the insurer with the policyholder
  • The insurer not providing adequate alternative accommodation while repairs taking place
  • The policyholder not being happy with the proposed claim settlement figure
  • Poor repair work carried out by the insurer’s recommended building contractors, or further damage being caused as a result of the poor workmanship
  • The insurer not providing continued cover following a subsidence insurance claim

For further information regarding subsidence insurance claims, visit https://www.financial-ombudsman.org.uk/consumers.

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