Why do I have to tell my insurer about subsidence from 10 years ago?

I had a minor case of cracking/subsidence at my small terraced home in North London about 10 years ago caused by a tree which has since been removed.

It wasn’t a major job and involved material being injected into the brickwork. I have had no problems since.

Because of the claim I pay an extortionate premium for my buildings insurance and I have to use a specialist insurer. Currently, I pay £1,330 for my buildings and contents insurance each year – it would be £840 alone without contents.

There is no statute of limitation for subsidence claims – I have to notify any potential insurers of the claim forever.

Subsidence and cracking can often occur on a property when nearby trees' roots expand

Subsidence and cracking can often occur on a property when nearby trees' roots expand

Subsidence and cracking can often occur on a property when nearby trees’ roots expand 

However, builders, insurance companies, surveyors and anyone else involved, by law, only need to keep records of the claim for seven years. And after three or four years insurers would consider a claim for subsidence as a new claim.

How can this be fair? For any other insurance, there is a time limit for having to declare a previous claim.

Grace Gausden, This is Money, replies: Having any sort of building work done to your home is often quite stressful, especially if you have no choice.

You experienced a mild case of subsidence, which is described as the gradual caving in or sinking of an area of land. This in turn caused cracking to the outside of your property. 

Although you managed to get this sorted and have not had any similar problems in the decade since, you are still paying a large amount of money on your buildings and contents insurance every month as a result – £1,330 – which equates to £110.83 a month. 

Not only are you having to pay over the odds, you have to take your policy out with a specialist insurer which will accept customers who have had to make a claim for subsidence before.

You must still tell any insurer in the future that you had a case of subsidence in your property, despite insurance firms only having to keep records of this for seven years.

This makes it difficult for you to move insure,r as many will not take on properties that have been subject to claims for subsidence before. 

It may also make it problematic should you ever want to move house as prospective buyers would have to be made aware of the situation before purchasing.  

Those who have previously experienced subsidence find their buildings insurance rockets

Those who have previously experienced subsidence find their buildings insurance rockets

Those who have previously experienced subsidence find their buildings insurance rockets

One of your main quarrels is that insurance claims made in other sectors have a time limit in which customers have to report previous claims to their insurer, for example, car insurance claims usually need to be disclosed for up to five years after the claim. 

You generally wouldn’t be asked about previous claims if they’re older than five years.

You were also told that any new cracking to the property occurring and claimed against after three years from the original damage would be considered a new claim.

This is Money checked, and it is up to the individual insurer to stipulate how much disclosure they require in order to provide cover.

For instance, if a home was destroyed by an earthquake 20 years ago and no subsequent damage from tremors has since occurred, the insurer would still consider any property built in that location to be at risk today. 

It is also important to note that failing to provide accurate and honest disclosure to an insurer could invalidate your policy.

Your question is really – how is this fair?  

This is Money asked major UK insurers to explain why they would keep the information on record and why they consider higher premiums for the customer justified.  

A spokesperson for Aviva replies: If a property has experienced subsidence once, there is a possibility that it may suffer a recurrence, unless suitably remedied. Therefore, this is something we need to consider when offering cover.

There are various factors which contribute to the cause of subsidence. These include the locality and nature of subsoils, property features, proximity to trees and weather conditions.

In the tree example outlined, removing the tree might eliminate the root cause, but could still leave the property susceptible while the ground recovers, or where trees are no longer present to absorb moisture.

Any instance of subsidence can be complex and sometimes we will need further information to understand the level of risk posed.

For existing customers who have made a subsidence claim with Aviva, we will continue to insure them, as we will have carried out necessary repairs as part of the claim.

For new customers, generally if works have been carried out in the past five years, we will recommend they stay with their existing insurer.

For properties where works were carried out more than five years ago, we may offer cover, but this depends on such considerations as when the damage occurred, the cause and any remedial action taken.

If a property has experienced subsidence previously, we will consider each case individually to understand the circumstances and the potential future risk. 

There are various factors considered in the premium, such as location and exposure to weather events. So some customers may pay a higher premium to reflect the risk posed.

Trees near properties are often the cause of subsidence which can prove to be very costly

Trees near properties are often the cause of subsidence which can prove to be very costly

Trees near properties are often the cause of subsidence which can prove to be very costly

A spokesperson for Admiral replies: Insurers usually ask a customer if they have made any claim at their property within the past three or five years to help them work out an accurate home insurance price.

Customers will also be asked at point of sale to confirm that the property hasn’t suffered from subsidence. Some insurers limit this to within a certain number of years, for example, 25 years. 

This is regardless of whether a claim has been made by the customer or any previous owners. 

We have specific underwriting criteria that must be met for us to accept a property as new business and are unable to accept customers whose home has had subsidence within the past five years because it takes a long time to know if remedial work has been successful.

In these circumstances, we would recommend the customer stay with their existing home insurer if possible because some will continue to insure the property even if the owner changes.

However, existing customers whose property has subsidence while insured by us will continue to have full subsidence cover.

We take a number of different rating factors into account when we calculate a price, and history of subsidence is just one of them.

Dan Simson, head of home insurance for Direct Line, replies: It can often be difficult for homeowners affected by subsidence to get home insurance, which is why we are committed to ensuring our customers have the peace of mind that Direct Line will continue to cover their property after a claim for subsidence. 

We will also offer insurance to a new buyer should they wish to sell their home, in order to make this transition easier for both them and the new owner.

Due to the often complex nature of subsidence claims, we do not offer quotes online, we therefore ask potential new customers to give us a call to discuss their individual situation before we are able to offer a quote. 

In the case of complex or long-lasting subsidence issues there are multiple specialist insurers available who are able to offer more tailored policies.

Insurers base premiums on a number of factors including previous claims, therefore if your home has been affected by subsidence, or is in an area often affected by subsidence, then your premium is likely to reflect this.

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