Advice on settling a Subsidence Claim

by Readers Question

11:17 AM, 29th November 2016
About 2 years ago

Advice on settling a Subsidence Claim

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Advice on settling a Subsidence Claim

We own a commercial premise which we trade from. Our neighbour has developed land directly at the back of our property. When he excavated the site we experienced subsidence. subsidence

Our neighbour proved to be awkward to deal with. Please note prior to the build we did engage the services of an architect who was supposed to act on our behalf as our Party Wall Surveyor. Unfortunately he should not have offered his services as we now know he wasn’t competent in this area and didn’t fully understand the act.

We therefore turned for help to our insurance company who engaged the services of a structural engineer who found that the damage had been caused by subsidence and attributed the blame directly at our neighbours development.

Two years down the line we are at the position where we have a schedule of works/repairs which the insurance can carry out or we can negotiate a cash settlement.

Most of the works are really cosmetic apart from a slightly sloping floor in an upstairs toilet. To carry out these works would cause significant disruption to our business for approximately a month as we only have one toilet in the building and most of our customers and staff would have to use a Portaloo in the backyard which for a hairdressing salon is not good…to say the least!

We have discussed the condition of our property with the structural engineer and she has said that as far as she is concerned she is happy the building is in a sound and stable condition and that she doesn’t predict any further movement even if we don’t have the work carried out by the insurance company. She is happy to give us a Certificate of Structural Integrity with the building in the condition it is in.

Our main concerns and priorities are firstly
• that we have appropriate documentation that we can show to a solicitor, valuer, engineer acting on behalf of any future purchaser to demonstrate the building is structurally sound. So that we would have no problems selling the property in the future
• having appropriate documentation that we can show future insurance companies so that we are not tied to our present insurer
• having appropriate documentation that we can give to any future lender so we could use the property as security if we chose to lend against it.

Furthermore we feel particularly upset that as a consequence of us having to make this claim our insurance premiums have gone up considerably these last two years due to our claim. Even though we have been told by the loss adjuster the insurance company will probably look to recover their costs from our neighbour.

In the event of us accepting a cash settlement we would also have to accept a £1000 excess which again seems unfair considering fault is not ours.

My questions are this;
• What advice can people give regarding the appropriate documentation required for the three points I made. Is it simply a Certificate of structural Integrity or is there other documentation I would require?
• What advice can people give in relation to realistic dealings with future insurance companies because of the subsidence claims. Will most insurance companies shy away from quoting and will we have to pay increased premiums from now on as a consequence?

I thank you in advance for reading this post and look forward to your reply.

Harvey



Comments

Jason McClean

11:31 AM, 29th November 2016
About 2 years ago

Hi Harvey

This is the murky world of insurance claims - made all the cloudier as it is a commercial property. However, it sounds like you are near the conclusion which is good.

I would suggest you need to have the repair works carried out by an accredited company, with its own professional indemnity insurance in place. Get as much information about the fix, guarantees, certificates etc as you can.

Insurers take different views to subsidence claims. Some will load premium for between 5-15 years after the claim. Others will look at the proof of work completed and offer normal terms, because if anything goes wrong they will claim off the company that made the repairs. It's down to individual companies and how they approach the risk.

In terms of £1000 excess for future subsidence, this is very normal whether you've had a claim or not. More likely, you will find excess levels will rise or subsidence will be excluded from insurance in the future to offer decent premium levels. Again, it all depends on supplier.

You should be able to get reasonable terms through a specialist, so if we can help, let us know when your renewal comes up.

Paul Fay

21:42 PM, 30th November 2016
About 2 years ago

If you want another insurer to be prepared to insure the property you will probably need to get the repairs done. Even then the market will be much smaller than usual and premiums loaded. You're probably better staying with your current insurer.

The floor can be easily levelled using timber firings fixed to the top of the joists. Sure the ceiling below will still slope but it will allow the repairs to be completed quickly, cheaply and more importantly with minimal disruption.

The person responsible for the subsidence is also liable for your policy excess and other uninsured losses, I.e. increased premiums. The insurer's solicitor should recover these for you because if they don't they will have prejudiced your position. Make sure that they do.

If the insurer has an approved builder get them to undertake the repairs as the insurer is responsible for anything that goes wrong.

If you do want a cash settlement a diminution in market value is the most appropriate way to go.

Good luck.

Tony the hairdresser

14:57 PM, 2nd December 2016
About 2 years ago

Hi Jason and Paul,
Many thanks for your comments. They have made us reassess are thoughts going forward. We think as there are long term implications in our decision we need to approach an experienced and reputable loss assessor who can evaluate our circumstances and cast an experienced eye over what is being proposed and ensure nothing is being missed.
Does anyone have an opinion on this and also is there any advice we can be given when choosing a loss asessor?

Paul your comments were very helpful. I tried to read your members profile but it wasn't clear?

Thank you in advance once again

Paul Fay

23:01 PM, 5th December 2016
About 2 years ago

Hi Harvey dog.
I work in insurance having specialised in subsidence claims for years. I also consult for a firm of surveyors who occasionally support people who have been poorly treated by their insurance company.. they get some very good results.

Where are you based and who is your Insurred/ loss adjuster?

I'm yet to meet a loss assessor who can cut it with subsidence claims as they don't tend to have the necessary experience.


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