[intro]Is this a good idea? Subsidence need no longer strike fear in the hearts of homeowners or perspective buyers, but as with any house sale, it is still a good idea to know precisely what you are getting into before you buy.
Primarily caused by changes to the water levels beneath a property, subsidence can be commonly caused by large trees sucking water from clay based soils, or conversely, trees being removed causing the soil to become waterlogged. Water escaping into the soil from poorly maintained drains or extreme weather conditions such as extensive periods of drought followed by flooding, can also cause subsidence. Less common causes include landslip, mining or excessive vibrations from traffic or building works. [/intro]
The insurance headache associated with buildings with a history of subsidence can lead to a drop in price of up to 20%. For cash strapped buyers who understand that there are specialist insurers out there who will reasonably insure this type of property, this can present a real opportunity.
If you are thinking of buying a property with a history of subsidence, there are a few things you need to find out first:
- The Devil’s in the details
Get as much information as possible, including a full structural survey. The more details you can provide underwriters the better. When did it happen, why did it happen, has anything changed or deteriorated since, what has been done to prevent further damage?
- Examine the root
Has the root cause of the damage been fixed? For example, has the offending tree been removed, has any underpinning taken place, have any drainage problems been resolved?
- Look to your neighbour
It is not uncommon for insurers to blacklist an entire postal code area based on one property suffering subsidence. However specialist insurers, such as Highworth Insurance, will examine each case on individual merits. Find out how extensive the damage was in the area, was it just this one home affected or where there more?
- Follow the paper trail
Ask for any documentation concerning the work, repairs and preventative measures. Once discovered subsidence is usually heavily documented. Ideally what you are looking for is an engineer’s report.
- Do your homework
Due to the stigma surrounding subsidence and in particular difficulties in finding competitive building insurance premiums, it is not uncommon for buyers to obtain quotes for buildings and contents insurance on the property before contracts have been exchanged. In any event, cover has to be in place at exchange of contract as liability passes to you at that point.
- Honesty is the best policy
Tell your insurers everything. It really is not worth the risk of not declaring the buildings’ full history in the hope of achieving lower premiums. If you ever do need to make a substantial claim and it is discovered that this information has been withheld, insurers are well within their rights to completely invalidate the policy and leave you with nothing
One of the big fears with subsidence is that the property will become impossible to insure, or that insurance premiums will rocket. This can be true; buildings with a history of subsidence can attract much higher excesses and rises of 20%, 25% or even 30% on standard premiums.
The trick here is to find a specialist broker. Classified as non-standard homes, buildings with a history of subsidence can actually achieve reasonably competitive rates if you use an insurer prepared to look at the case individually rather than simply running statistics through a database.
[intro] Highworth Insurance Specialist Advisors can do just that. Providing full disclosure in these cases is often the only way of getting the best premiums and because Highworth Insurers use Underwriters prepared to assess subsidence cases on an individual basis, they can very often achieve comprehensive cover at competitive premiums even if the building has suffered subsidence in the past. [/intro]