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What is subsidence and other types of ground movement?

Subsidence is the downward movement of the site on which a building starts.  Where the movement is unconnected with the weight of the building. Simply put the soil beneath the building foundations is unstable.

This will differ from “settlement” which can also result in the movement of a building.  With settlement the building sinks into the site on which it stands and can be a sign of an inadequate design or construction.  With subsidence the downward movement of the site would have occurred without the weight of the building.

There are other types of movement as well but in real terms ground movement can impact the site on which a building stands, beneath its foundations.  Heave, landslip, settlement and subsidence can cause damage to a property and upset its owners or occupiers.

In insurance policies they often refer to “the site” when talking about movement cover.  This usually means the prepared ground, including made up ground, on which a building is erected after the trenches have been dug, and immediately prior to the first step in the actual process of the building.

Will my insurance company cover me for subsidence?

Yes, they would cover you for subsidence but there are different types of ground movement and four main causes.  These are:-

Heave

Landslip

Settlement

Subsidence

These are defined as follows:-

Heave – upward movement of the ground beneath a building as the result of soil expanding

Landslip – downward moving of a sloping ground

Settlement – downward movement as a result of soil being compressed by weight of a building within ten years of construction

Subsidence – the ground beneath a building sinks, pulling the property foundations down with it. It usually occurs when the ground loses moisture and strength, which can be caused by a prolonged dry spell.  It may also be caused by trees and shrubs which can absorb significant volumes of water from the soil.

Subsidence – these cases can be complex and can require expert evidence and technical data.  They will need to look at the symptoms of the problem to find out why it is caused.

You would normally find that subsidence is caused by one of the following situations:-

Clay shrinkage

Clay shrinkage is one of the most common causes of subsidence.  Clay is made up of about approximately 30 to 35% water, so soil can with a high clay content dry out as a result of nearby vegetation sapping up water, particular during long hot summers.  The volume of the soil decreases and the buildings foundations subside.

Trees

Often a tree can cause structural problems to a property because of the shrinkage of the clay or subsoil beneath the foundations.

An insurance company will usually instruct a company to advise of the most appropriate remedy.  These are called arboriculturalist.  They may include cutting back down the tree to its trunk, topping it, thinning or removing it.  They may also look at installing root barriers to stop the encroachments of the roots.

Escape of water

It is often a case where there has been a significant time of escape of water from a bursting or leaking pipe for example, can wash away fine particulars of underlying soil.  This can happen and the soil beneath the property reduces and the property foundations subside.

An escape of water can cause the underlying soil often to soften.  This will therefore make the whole property have less support and cause the foundations to subside.

When this happens it is often a case that this comes under an escape of water claim within the policy.  It is not unusual for there to be specific exclusions for subsidence damage under this peril clause which could involve a higher excess.

Mining

Often this will the case where there has been a collapse of underground mines even long disused mines.  This is a valid insured event but you need to ensure that the property is not necessarily within a mining area and if so that you did disclose this when putting the insurance in place.

Poor Ground

Every property will take a period of time to settle.  This is due to the weight of the building compacting the soil beneath on its foundations.  Unfortunately soil can compact and this can exaggerate due to:-

  1. Poor ground
  2. Inappropriate material used by the builders when making up the ground
  3. Lack of compaction of made up ground material
  4. The way the ground is prepared before the building starts

Any of the above can result in a considerable down movement of the property or floor slabs and damage the property.

It is important that you are aware of any of these circumstances before you take out the insurance policy and that you fully disclose them.

You may find that an insurance company asks you to fill out a specific subsidence questionnaire asking you certain questions before they will give you cover.  These would be items such as to the best of your knowledge are the buildings built on made up ground or landfill or slag heap?

Are there any visible cracks in the walls if yes please advise:-

  1. Between 1mm and 2.5mm wide
  2. Between 2.5mm and 5mm wide
  3. More than 5mm wide

Has the property for which insurance is required ever been damaged by subsidence, heave, landslip or movement and are there any signs of repair?

Are there any trees or shrubs within 20 metres (65 feet) of the property and which are more than 5 metres (15 feet) in height?  If yes please indicate the distance of the nearest shrubs/tree from the building as follows:-

  1. 10 to 20 metres (32 to 65 feet)
  2. Less than 10 metres (32 feet)

To the best of your knowledge has the property ever suffered from any problems with undergrown drainage?

If any of the answers to the above questions are yes then you may have trouble trying to insure the building or alternatively it may be an increased excess for the property.

Would I be covered for all of the above?

Almost all commercial property insurance cover loss or damage by subsidence heave and landslip.  They usually cover the cost of repairing the loss or damage but not the cost of preventing further subsidence.

This means the cost of repairing the damage to the building and super structure is covered but the cost of stopping the building from moving in the future isn’t.

If a building is still moving you will usually need to carry out works to stop the movement first to ensure that the repairs are effective and last for a reasonable period of time.

The insurance company will normally send a loss adjuster to identify the cause of the subsidence and to ensure that its stops the effect on the property by removing vegetation or repairing leaks on drains for example.

You will find that most building policies only the cost of repairing the damage caused by subsidence but not necessarily proactively preventing any future subsidence.

Stabilising the building?

When dealing with this so that the repairs are effective you will need to make sure that the property is stable.  This may not be covered by your insurance but it is needed to be dealt with straight away to stabilize the property to solve the immediate problem and to prevent any future subsidence.

Once the property has been stabilized repairs to the super structure can be carried out.  These can involve filling cracks and restoration begin.  It might even require masonry to be strengthened.

Underpinning

Underpinning if often seen as a permanent and effective way of stabilising a building but is only used in the most serious of cases.  It is seen as a preventative measure which isn’t always covered by your insurance policy.  You would need to check with your insurance company in this regard.

In many cases a building can be stabilized by other action for example:-

Repairing leak drains

Removing vegetation

Removing other external causes

Providing additional strengthening

There are other ways of stopping it and you may need to consider these and what is adequate to stop the movement based on expert advice.

I have an existing subsidence issue from some time ago. What should I do?

Always disclose any form of previous problems you may have had with subsidence and what if any work has been carried out.  This is actually critical when dealing with insurance companies.

You may find that the insurance company would not cover you for any previous work that has been carried out but may cover you in future.

In relation to a claim for subsidence or heave every single property will be different and it is important that you are not only aware of any issues but that they are fully disclosed.

Why not contact us on (01273) 827090 to discuss any requirements you may have. We have insurance companies for all solutions and would be able to help you.

Cover Lite vs Full Cover

We have searched the insurance market and come up with a new product called cover lite. We have often been asked by landlords whether we could provide a cheaper product.

This cover lite policy allows you to be able to do this at a reduced cost.

Yet, it is always important for people to understand that reducing cover might save you in the short term but would it save you in the long term.

We look at what will be excluded from policies in order to reduce the premium. We have found that some of the large insurance companies provide a much more reduced cost for clients but are they covering what they actually need? We appreciate that everybody’s budget is different but it is important that you are aware of what wouldn’t be included.

What items are normally excluded to reduce an insurance premium i.e. what cover is taken out?

Accidental damage for buildings

What is accidental damage cover?

Accidental damage insurance covers damage caused by unintentional acts, like spilling a drink and staining a carpet, or breaking an ornament. Accidental damage is cover for your possessions as well as the building. Accidental damage can cover a variety of items such as broken glass, windows and other fixed external glass.

Accidental damage to toilets, sinks and other bathroom fittings, damaged drains, pipes, cables, and tanks connected to your home.

Damaged kitchen units, including accidental to built in ones.

Any unintentional hole in the wall

Flood, fire, storm and other water damage.

What will it not include?

It will normally exclude the following:-

The cost of maintenance or normal redecoration.

Loss or damage from:-

Settlement, shrinkage or expansion

Insects, vermin, domestic pets

Scratching or denting

Damp, fungus, wet or dry rot, mildew

Atmospheric or climatic conditions, frost, the effect of light

Rust, corrosion, wear, tear or depreciation, or other gradually operating cause

Loss or damage caused by a person you employed to carry out maintenance or repair work and anything else in this regard.

Subsequent or consequential loss of damage where the initial cause of the loss or damage is not covered.

Loss or damage where a part of the property is empty or occupied.

Underground services could be covered. Normally accidental damage to underground services supplying the buildings for which the insured is responsible including the cost of breaking into and repairing the part between the main sewer and the building following a blocked pipe.

However the following would not be covered

Loss or damage which you are not legally responsible to repair:-

Loss or damage caused:-

  1. a) By rust corrosion or other wear, tear or deterioration
  2. b) Whilst clearing or attempting to clear a blockage
  3. c) Damage due to a fault or limit of design, manufacture, construction, or installation or by gradual deterioration which has caused an installation to reach the end of its serviceable life.
  4. d) Damage to pipes made from pitch, fibre material
  5. e) Loss of damage whilst the property is empty or unoccupied

Accidental damage for contents if often excluded. This basically relates to an accidental damage to any contents that may be in the property and is pretty similar to the other exclusions.

Reducing property owner’s liability

It is normally standard for property owner’s liability to be up to £5M. Yet by reducing the cover down to £2M this can reduce it. But not all insurers will do this and some it is a fixed amount.

What is property owner’s liability insurance and why do I need such a higher cover?

Property owner’s liability insurance enables you to meet any costs and damages awarded to a member of the public if they suffer an injury following an injury on or linked to your premises.

This protection is usually included within the policy but not always. It could be from any claim arising from the ownership of the property.

The property owner’s liability insurance policy will protect landlords and property owners in respect of claims. As a property owner you have the legal responsibility to ensure that your property is well maintained and does not present unnecessary risk of injury or property damage to either tenants, visitors to the premises or a member of the public outside of the building.

It is totally a matter for you on whether you wish to reduce this type of liability but you must understand that if you do and a claim is made against you for more than the insurance company are covering you would have to pay the difference. It can often be misunderstood by clients and their insurance company whilst they are not covering it i.e. they are giving you £2M but an award has been made of £5M they will pay it out. This is not the case. What the policy says and outlines is exactly what you will be able to get from your insurance company by way of cover.

I have decided to go for a cover lite policy do I need to read what is included?

Absolutely yes, it is so important that you understand that under the Insurance Act you are responsible for all your paperwork and if there is anything that is not included within your policy then it is your responsibility to confirm that you wish to have it added in. It is absolutely critical that you read your paperwork. If for instance, subsidence has been excluded due to the particular area having lots of subsidence claims and you don’t notice and then want to make a claim you will not be able to do so. The Insurance Act makes it clear that it is your responsibility to do this.

When receiving your renewal it is important that you read through all the documentation. You may have excluded accidental damage, malicious damage, or reduced your sum insured but you have to take full responsibility for all of the policy.

Reducing your sum insured can have a huge and critical effect on your policy.

What is an average clause with respect to my building sum insured? What does it mean for my insurance?

You may have an insurance claim reduced by what’s known as an average clause. An average clause is applied when insurance company find that your insurance value sum i.e. sum insured to be incorrect to their own valuation. The value can vary dramatically so it is in your interest to investigate this in the terms of your policy. If you are trying to reduce your premium by reducing your sum insured this could have a huge effect on a claim.

A condition of average is a clause that every insurance policy will have which is there to protect not only your assets but the insurance company and their other customers to. It ensures that you don’t receive a full insurance payment when you have only paid part of the premium.

How does it work?

For instance if a fire damaged a property causing repairs of £100,000.00 and the total declared reinstatement insurance value is £1M most owners would assume that they have adequate cover.

The trouble comes when the insurer can establish that the actual cost to rebuild is £1.2M they can potentially claim that there is inadequate cover in place and reduce the claim via the average clause. The claim will be reduced by the same proportion as the amount of “under” insurance.

These reductions affect the claims pay out and can be as much as 50% which could be devastating on anybody. This typically occurs when the reinstatement insurance assessment for the building is out of date.

Have you had your building assessed for insurance purposes recently?

If not you need to consider this. There are various different products out there and we have our own that can help you to ascertain whether the amount that you have insured your building is correct.

Index linking

Do I really need this?

Absolutely yes, if you reduce your sum insured amount by the index linking every year you will be in a position that your building will be horrifically under insured. You may be able to reduce your premiums every year by saving £10.00 or £15.00 but you could end up losing thousands by doing this. It is important that you find out exactly what your building is worth and it is your responsibility.

What is Accidental Damage Cover?

What is Accidental Damage?

Accidental damage insurance is there to keep you covered against the cost of repairs or damage to the buildings and contents. Following an unexpected accident or crisis. You can have accidental damage as part of your flexible landlord insurance policy. This is sometimes included within your policy or can be an optional extra. It is important that you double-check before buying.

 

Accidents will happen but what does accidental damage cover in your landlords’ insurance?

The definition is uniform across insurance policies. If damage occurs as a result of an unexpected, non-deliberate or external action by a third party. This could mean that the damage is unintentional. A one-off incident that harms your property or contents. Such examples of this are dropping a mobile phone in a sink and breaking it or spilling a glass of red wine on a new beige carpet. It is important that you understand that all policies are different and may not include this cover.

Also, some policies do a new for old whereby you will get a new replacement but some are on a like for like basis and you need to check.

Not every policy has accidental damage insurance. For instance, some will cover it but not cover the damage to unoccupied areas. It may not cover damage caused by pets or malicious damage, it won’t cover contents unless the contents cover is added. It is important you understand the difference between accidental damage and malicious damage. Please don’t hesitate to read our articles.

 

Is DIY damage included?

Accidental damage insurance protects you against DIY accidents. This also includes home mishaps such as spilling wine on a sofa etc. It all depends on the terms of your policy. So it is important that you do check this at length. Be aware that it may not cover some plumbing and electrical work that an amateur has completed under DIY such as drilling through a water pipe. Contractors have their own insurance to cover their work. Which is professional indemnity insurance.

Accidental damage accounts for half of all contents insurance claims. These relate to home or buildings cover. Landlords must differentiate between the two and check you have the right type of cover. The insurance does not cover general wear and tear. In most cases it will exclude damage by domestic animals or bad workmanship.

 

What does it cover?

Accidental damage is the cost of repairing or replacing property. Or contents damaged in a one-off incident. The cover could come under your landlords’ contents insurance. So it is important to check the level of cover. Not all insurers have it within their policy so it is important that you check. It is an optional extra with some insurance companies so it is best to check. It will not cover you for wear and tear of an item over a period of time. This, for instance, maybe a carpet that has worn out over a period of time and become threadbare. Which would not be a one-off event. If the tenant has their own furniture or belongings within the property. It does not cover these either. It is important to familiarise yourself with the policy. To understand what’s included and what is not.

You can buy extra damage cover as part of flexible landlord insurance from iInsure365. Or many other key landlord covers. Make sure you read and understand any exclusions on your policy before you buy it. It is unlikely that a conventional home insurance policy would cover you for a buy to let property. So check the insurance is in place and decide what’s required.

 

How much does accidental damage buildings insurance cost?

Talk to us and we will be able to give you a quote to include this within your policy. We will also be able to provide you with the extent of the cover and the sum insureds you might have. The size or value of your property must also be taken into consideration. For example a landlord with one domestic property. Would pay a very different price for cover for a landlord who wanted to cover a large portfolio. Both domestic and commercial. It is important that you discuss these with us so that we can help you.

 

What does the landlord insurance cover?

It is up to your tenant to insure their valuables with their own contents insurance policy. But some landlords’ insurance policies will cover contents up to a certain limit.

Landlord insurance policies also tend to include public liability insurance. This covers you against injury to your tenants or damage to their belongings. As a result of leaving the property.

There are various extra options when it comes to landlords’ cover. Just call our registered office to discuss a quotation.

For competitive commercial insurance call us now

01273 827090


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