There’s a basic insurance principle that evidence of increased risk will mean an increase in your premium, as well as possibly a tougher time getting insured at all. For instance, if you’ve made an insurance claim for an accident in your car that was your fault, your motor insurer will see you as high risk. However, if you then drive for several years without incident, that assessment of higher risk will be wiped out.
This is true of almost all types of risk, except for one — subsidence.
Subsidence currently has no statute of limitations in insurance terms. This means that, even if the subsidence has occurred ten years ago and was fully dealt with then, you still have to declare it to your insurer, not to mention any new purchaser of the property. That creates the double whammy of making your property difficult and expensive to insure and making it harder to sell.
This might seem reasonable if there’s a very real risk of the subsidence recurring. Not all subsidence is like this, though. It can be caused, for example, by tree roots too close to the building or by faulty drains, and if these issues have been fully resolved, your home is in no greater danger than the average property.
Nevertheless, in this situation the property will still be assessed as being at risk of subsidence. So what does this mean, and is there any way around it?
Insuring a Building with a History of Subsidence
In general, if subsidence has occurred within the past five years, whether or not an insurance claim has been made, most regular insurers will refuse to take it on as a new policy. On the other hand, they’ll probably continue an existing policy, but at a much higher premium. They may accept your application after five years, but again at a higher premium.
The alternative is to go to one of the specialist insurance firms that deal with higher-risk cases. One of these should be able to arrange a policy for you, even if the subsidence has been recent — but you’ll still have to pay over the odds for it.
So can you avoid being penalised for past subsidence, even if it goes back as far as Noah’s flood? There’s no guarantee, but Allied Claims would recommend going through a good insurance broker, especially one who has experience dealing with this kind of case. If there is a chance of finding an insurer willing to give a more reasonable quote, they’ll be your best bet for finding it.