Subsidence – Underpinned Home Insurance

Subsidence is structural damage, typically cracking around doors and windows, caused by the movement of foundations and is a common problem in the United Kingdom. A common solution is underpinning. Underpinning essentially involves inserting new foundations beneath the existing ones, but if you live in a property that requires underpinning, you may have little difficulty in claiming for the work to be done on your existing buildings insurance policy, you may find, however,that the situation is different once underpinning is completed. Similar comments apply if you are considering buying a property that has already been underpinned.

Insurers tend to take the view that once a property has experienced subsidence it is likely to happen again, despite any remedial work in the form of underpinning. This leaves homeowners in the unenviable position of having to stay with their existing buildings insurance provider and face an almost inevitable increase in their premium of 20%, or 30%, plus a higher excess, or switch to a specialist provider who is unlikely to prove any cheaper. Geo Craft Builders

This is something to bear in mind for prospective buyers of underpinned properties. Underpinned home insurance premiums, where they are available, are high, and although an existing insurance provider is obliged by an industry agreement to continue to provide cover for the existing owner after underpinning, this does not apply to the new owner once the property is sold. This means that the extra cost of insurance, and excess, needs to be factored into the cost of the purchase by the prospective buyer, or worse, that a buyer cannot obtain buildings insurance at all, and therefore no mortgage.

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