Property damage caused by subsidence or heave is a distressing situation for any homeowner or commercial property owner and can create an element of ill-feeling around the sale of an insurance policy. This could be directed towards the insurance broker who sold the policy, as well as towards an insurer refusing to settle a claim as the insured believes their cover dictates.
Resolving such insurance claims with the minimum of distress and recrimination is the role of an Aspray loss assessor, who can step into the complex scenario surrounding subsidence or heave and act on the policyholder’s behalf, addressing the many areas in which delay, friction, refusals to pay or unwillingness to cover the recommended repair costs, can occur.
Aspray’s loss assessors have waged many battles for policyholders who have felt hugely let down by their insurance policy following a case of subsidence or heave. Many rightful settlements have been secured due to Aspray’s dedication, but the same situations emerge continually. It is worth considering what these are and how they could be aligned to your situation.
What is subsidence and what is the difference between subsidence and heave?
Subsidence and heave both affect a building’s foundations. Subsidence is the downward movement of those foundations, whereas heave is the upward. Both can cause internal and external issues, as a property sinks or shifts in response to impacts on the earth beneath.
Earth underneath a property can be affected by various things, including vibration and nearby construction work, frost, chemical attacks – for instance due to contaminants or oil spillages – and the geology of the soil and influences on that soil. This can include soil softening and erosion, compaction/consolidation and the shrinkage or swelling of the clay soil predominantly found in areas such as London and the south east.
Imposed loads can also cause major issues, as can levels of groundwater, leaking drains and the collapse of old mine workings. The last cause has its own geography, being typically found in areas such as the north east, Yorkshire, Derbyshire and parts of the Midlands, where mining activity was once extensive.
How do you know if your property is suffering subsidence or heave?
You will typically see signs such as:
- The appearance of cracks, especially in a hot spell and around features such as doors and windows
- Vertical or diagonal cracks
- Cracks inside the house or property that are matched by a crack outside, in the same location
- Cracks that are open at some times of year and close at others
- Doors or windows that will not open or close and which suddenly ‘stick’
- Wrinkling of wallpaper, even though it isn’t damp
Subsidence in new and old properties
In a newer property, defined as one being built in the past 20 years, something that occurred at the time of construction is typically the cause of the foundations shifting. In an older property, the cause is most likely to be either erosion of the soil or the shrinkage and swelling of clay soil. The latter is estimated to have cost the economy £3bn over the last 10 years.[i]
Erosion is usually due to leaking drains, which could run under a property or be close by. Blocked drains could also be at fault. Any water passing through a soil with a typically fine composition, can loosen and wash away soil particles, causing compaction under the property.
Shrinking and swelling is largely caused by weather conditions. Hot weather sees soil losing moisture content and encourages trees, close to a property, to draw more water out of root systems potentially underneath the foundations. This can cause the clay to shrink and movement in the property to occur. Rehydration of the soil, in wet weather, can see the property moving back to its original position. This can lead to cracks opening and closing at different seasonal times and may allow for just a cosmetic damage repair to be carried out, along with remedial work such as tree removal, as part of the property insurance claims process.
Most modern properties have foundations to a depth of at least one-metre – sufficient to cope with typical moisture content change. However, the foundations of older properties may not be as deep and, if trees are part of the scenario, the depth to which the earth is affected can be much greater. A mature deciduous tree can remove over 50,000 litres of water from the soil per year and, in a drought, moisture removal can extend to a depth as low as six metres under a property.[ii]
Heave on sites of new developments
Where a site has been cleared for new house building to occur, tree removal may have been part of site preparation works. Over many years or centuries, these trees may have taken moisture out of clay soil. This moisture could quickly be replenished, once the site is cleared and this can have the effect of expanding the soil beneath new-build properties now sitting on top of it. If the builder recognised this might happen, they could have allowed for this within the design of the homes but, if not, property damage could be major.
Many new homes will have a building warranty attached to them, which should cover any poor workmanship or defective design for 10 years but, if the issue materialises after this period of time, or could not have been predicted, it would be a matter for a homeowners’ own insurance policy to address. Most policies will not cover defective workmanship or the bedding down (settlement) of new structures , so arguments about the cause of property damage can be fierce.
With so many new properties needing to be built in the coming years, to meet government targets, despite a downsizing from the original target of 300,000 new properties a year by the mid-2020s, there is pressure on developers to use all types of land on which permission can be gained. Brownfield sites are a particular focus at present[iii] and, whilst these may not boast many trees, they could have contaminated soils with the presence of chemicals that can affect foundations. Whilst reputable developers should test soils and ensure contaminants will not be an issue, some may not be as conscientious in this regard.
Other exclusions to take into account
A home insurance policy’s small print will contain other exclusions, which basically convey the fact that the policy will not pay in certain circumstances. Land heave or subsidence usually has to be accompanied by damage to the built property, or will not be covered. Another exclusion is often related to instances of fire, earthquake and explosion. Escapes of water from tanks could damage your foundations, but may not allow you to claim on your policy. Also, beware if you are undertaking a ‘grand design’ at your property and having structural alterations carried out, as those could also make a claim for subsidence invalid, or at least see an insurer try to claim such works were responsible for the damage.
Typically, an insurance policy will have no cover for any subsidence or heave-related damage that occurs to walls, fences, patios, driveways or gates. Only the building is usually protected, not surrounding structures.
How to make a property claim for subsidence or heave
If you are sure a mining structure’s collapse is at fault for your property issue, you should download and complete a Coal Authority’s Damage Notice Form, but also advise your insurer that you have taken this course of action and will be seeking compensation from a local coal authority.
If any other reason is behind your subsidence or heave insurance claim, you would be well-advised to quickly appoint your own loss assessor and allow them to interpret all of your insurance policy’s terms, conditions and wording for you. An Aspray loss assessor can instruct experts in the field of engineering and surveying, who can give their learned opinion as to what needs to be done to correctly and permanently stabilise the property and prevent future issues. Other experts, not working on your behalf, may wish to recommend a cheaper and more temporary or shorter-life repair. That could damage your interests – and the value of your property – in the longer term.
How will a subsidence or property claim progress?
You need to prepare for the long haul, as investigations into the causes of the subsidence or heave are likely to take at least 12 months. This is another good reason to appoint your own loss assessor, as the ongoing negotiations, communication and perhaps even wrangling, can be extremely draining over such a long period of time and it can be a huge time commitment, if you choose to go it alone. Given the complexity of such claims, many property owners recognise that handling a claim is not something they can do by themself, even at just a competence and knowledge level. As has been noted by the Financial Ombudsman Service, most of us lack “expertise” in this area.
The repairs process will usually involve something such as the creation of shallow trial holes, which will allow surveyors to analyse the depth of the foundations, what they are resting on and whether or not there are any leaking drains. Hand-augered boreholes will enable samples to be taken out for analysis. Ongoing crack monitoring systems will also be established, and these will need to assess what is happening to the building, over quite a period of time, establishing, for instance, whether any movement is seasonal.
Stabilisation of the building will be accomplished as quickly as possible. This could be achievable by simply removing factors that are causing an issue, such as vegetation, or by repairing drains. In serious cases, it will require an underpinning of the building, which usually means excavation work and the creation of a concrete foundation beneath the property.
You should also be prepared to pay the excess on your policy for a claim like this, which is often around the £1000 mark.
Common areas of complaint against insurers during subsidence or heave claims
According to the Financial Ombudsman Service, the most common areas of complaint about insurers tend to be generated by insurer actions – deemed by the policyholder to be not in line with their policy terms – or inaction and delay. Those they list[iv] are regularly seen by Aspray loss assessors, when fighting on behalf of a client who has a property insurance claim for subsidence or heave.
Insurers sometimes make an outright refusal to pay the claim, or offer to pay something, but not an amount that will actually repair the property in any extensive way, with the works they will fund being more remedial than a permanent solution. Sometimes, the complaints are generated after such works are completed, when the customer realises the quality of repair is not sufficient or repairs that have been undertaken have caused further property damage. Another key area of complaint surrounds insurers not providing alternative accommodation for the insured, whilst work is carried out.
Taking too long to resolve matters and failing to communicate with the policyholder are another regrettable area from which complaints stem. Having your own loss assessor on board, removes you from the frustration of having to ring departments multiple times, to try to get answers or commitment to actions.
What your insurer could try to do to your settlement in a subsidence or heave claim
Analysing some of the Financial Ombudsman Service’s case studies demonstrates some of the ways in which an insurer might try to escape their obligation to rightfully pay a claim, or might try to reduce your claim for subsidence or heave.
Disputes over degrees and methods of stabilisation
One case involved a semi-detached property in which, although the insurer felt that the whole property required stabilisation, due to the non-cooperation of the owner of the other half of the building, this was not possible and, despite legal action being threatened, the neighbour would not agree to work being carried out. The insurer was allowing things to carry out in this less than satisfactory state of limbo, ignoring an option that did exist, to effectively stabilise and repair just the insured’s part of the property. Their refusal to follow that option was because it was more expensive to do. Following the Financial Ombudsman Service (FOS) judgement, the insurer was forced to follow that option.[v]
In another case, an insurer claimed stabilising a property was not part of its liability, because the policy purchased only covered the cost of repairs to a damaged property. It interpreted stabilisation as being “preventative, not restorative” and said such costs were not covered. This argument also held no water with the Ombudsman.[vi]
In a claim where insufficient attention was given to repairs, again the insurer’s view was not upheld. The Financial Ombudsman Service stated, “in our view, the proper repair of a building requires something more long-lasting than a temporary patch-up.” The authority felt that just filling in cracks that would appear again, was not in line with a duty to “repair” and ordered that the insurer meet the cost of property stabilisation.[vii]
Date of damage/not declaring a material fact
Another common means through which an insurer can try to avoid paying a claim is an assertion that the subsidence or heave is historical and dating from a time before the current insurance policy came into force. Here, the Association of British Insurers has an agreement by which insurers should abide, if a property owner has changed insurer.
If:
- the date of notification of a claim is within eight weeks of the change of insurer, the previous insurer should pay the claim.
- it is between eight weeks and one year, then the current and previous insurer should pay.
- more than a year has passed since changing insurer, the current insurer should pay.[viii]
Where a policyholder is trying to deal with more than one insurer with regard to their subsidence or heave claim, of course, the role of a loss assessor can be even more crucial, as communication can be even more difficult.
With regard to allegations of historic damage and an idea that the homeowner should have known and declared they had subsidence property damage, there is another grey area. The Financial Ombudsman Service recognises that it is not always easy for a lay-person to recognise subsidence or heave. Having said that, if you did suspect such forces might be at work, you should report it to your insurer and, not to do so, leaving things to worsen, could catch you out in a claim, particularly if you change insurers and do not declare any signs of subsidence when doing so, if you are aware of these. Knowledge of this kind is deemed to be a ‘material fact’ and it is your duty to make your insurer aware of all material facts.
Capping the property claim payout
Your insurer could also attempt to cap your claim for subsidence, if the cost of the repairs and stabilisation exceeds the limit of the policy. This is another area in which a loss assessor could potentially argue your case effectively, as the Financial Ombudsman Service has stated that when an insurer chooses to repair damage under an insurance policy, it enters into a “contract to repair” which is separate to the contract of insurance. In most cases, the insurer is not, therefore, able to limit the benefits to fall in line with the overall sum for which the property is insured and it is “likely” that the insurer would ultimately be ordered to pay any costs of stabilisation and repairs that exceed this sum.
Whilst insurance costs for those who have suffered damage to their property’s foundations do become significantly higher, it does not necessarily mean that you cannot sell your property. Your insurer should usually agree to insure any future owner of your home, if you sell. Switching insurer would be more difficult. Do not let these thoughts prevent you from advising of the property damage, however, as damage could become worse and, once you are aware of any damage, it is your duty to report it, to prevent it worsening.
Third-parties and subsidence and heave claims
Having the co-operation of a neighbour may be imperative in your subsidence or heave repairs process. We have already discussed the case of a semi-detached home that required both homeowners to co-operate in stabilisation works but it may be that your neighbour, or another landowner, has trees that are causing an issue or drains that are leaking, or has suffered an oil spillage that has led to oil getting into your foundations. In these instances, you might need their assistance in rectifying the issue or may need to hold them liable for the damage and sort out your claim accordingly, potentially looking to their insurers for the settlement.
In the case of trees, the Association of British Insurers Subsidence Tree Root Claims Agreement[ix] should step in, if a neighbour’s tree is at fault for damage to your property’s foundations. Under this agreement, your insurer should still pay the claim, even though the neighbour’s tree or trees have caused the issue. However, if the issue then reoccurs or no preventative measures have been taken by the third party who was liable, any subsequent claim is not bound by this agreement. The agreement also has no bearing in any uninsured loss claim pursued against the person held liable for the damage.
Conclusion
Subsidence and heave property insurance claims are typically complex and protracted claims that require a lot of knowledge of insurance jargon, the policy cover and property repair and reinstatement. Insurers have used various tactics to try to avoid paying what can be very costly claims and, without any knowledge of insurance, it may be extremely difficult to argue against their opinion.
On the other hand, trying to get a favourable ruling from the Financial Ombudsman Service may not work or may delay your property reinstatement, when a loss assessor could potentially argue your case for you immediately, point to previous cases, if necessary, and gain you a fair settlement in as quick a time as possible.
Having an Aspray loss assessor represent your interest in such a difficult claim makes perfect sense, particularly when, if that loss assessor is appointed to manage the claim and able to instruct their vetted contractors to carry out the repairs, the claims and property reinstatement management service is offered free to the policyholder.
With subsidence and heave claims involving such major works, an individual policyholder should also be very aware of the CDM 2015 laws, whereby they have a duty to ensure that the health and safety of the contractors working on their job is being safeguarded and managed correctly.[x] This is another good reason to appoint a project manager, in the form of an Aspray loss assessor, who will take that responsibility off your shoulders.
If you need to discuss your subsidence or heave claim, or have just spotted possible signs of subsidence or heave and need to contact your insurer – but do not wish to do this without already having help in place – please call us on 0800 077 6705.
[i] https://www.designingbuildings.co.uk/wiki/Subsidence_of_buildings
[ii] https://www.abi.org.uk/globalassets/files/subject/public/home-insurance/protecting-your-home-from-subsidence-2020.pdf
[iii] https://www.theguardian.com/society/2020/dec/16/brownfield-sites-prioritised-in-plan-to-build-300000-homes-a-year-in-england
[iv] https://www.financial-ombudsman.org.uk/businesses/complaints-deal/insurance/home-buildings-insurance/subsidence-types-ground-movement
[v] https://www.financial-ombudsman.org.uk/decisions-case-studies/case-studies/subsidence-claim-hampered-neighbours-refusal-cooperate
[vi] https://www.financial-ombudsman.org.uk/decisions-case-studies/case-studies/insurer-says-not-liable-preventative-work-investigation-found-otherwise
[vii] https://www.financial-ombudsman.org.uk/decisions-case-studies/case-studies/insurer-says-not-liable-preventative-work-investigation-found-otherwise
[viii] https://www.abi.org.uk/globalassets/files/subject/public/home-insurance/protecting-your-home-from-subsidence-2020.pdf
[ix] https://www.abi.org.uk/globalassets/files/subject/public/home-insurance/abi-domestic-subsidence-tree-root-claims-agreement-may-2017.pdf