Structural engineer's report reassuring about cracks BUT insurance still an issue - any advice?

[mrsfox]

DH and I are buying a Victorian terraced house in East London, and the survey found a couple of cracks in the front bay window. Because the survey said they might be progressive, we got a structural engineer to assess it. His report says that in his opinion the movement is historic (over 20 years old), not progressive and the bay window does not need underpinning. The cause seems simply to be the weight of the bay window on the clay soil - there are no drains or trees around. The rest of the house is in good condition.

However, the insurance companies I have so far contacted about getting buildings insurance have all said that because the report says that monitoring the cracks is the only way to be 100% sure the movement is not progressive, they won't cover us for subsidence. This includes Adrian Flux, who I thought would be our best bet (having read recommendations on MN).

So I am wondering if anyone has experienced similar issues and managed to get insurance at a sensible price? It seems a crazy situation, as this issue affects so many London houses - how do people get insurance??

I am panicking a bit as I am 38 weeks pregnant and we have just been served notice by our landlord and have to be out of our flat by 11 August. I really really want this sale to go through, but am worried that even if we find insurance we could end up with ridiculous premiums.

Thanks!

[ASillyPhaseIAmGoingThrough]

Who currently insures? You could get insurance with no subsidance cover, get the house underpinned at your cost. Make sure you get house at a good price.

[mrsfox]

It's Legal and General currently. Unfortunately I think that our mortgage provider requires us to have subsidence cover in order for us to exchange contracts.

It doesn't need underpinning according to the engineer, but the problem seems to be that because the report says 'The only way to definitively confirm if the movement is progressive would be to adopt a 12month monitoring regime of the cracks, in order to measure how much they moved' - so all the insurance companies are saying that they want the monitoring to take place before they can give us subsidence coverage.

[northernruth]

We had this with our house. TBH I wish I'd never had a full survey! We are insured with Hiscox who have a subsidence excess on the policy. You will need insurance, have you tried the current insurers (who will currently be on risk for the problem) or your mortgage provider

[mrsfox]

I know, northernruth!! The mortgage survey didn't pick up on the cracks, but because we had the full works survey done, we have to declare them. Although I suppose it's better to know now rather than later.

I actually called Hiscox today and did have a fairly positive response from the guy I spoke to, so now just waiting to see what they say when they've read the report. Just heard back from Woodstock to say that they won't insure for subsidence either

We are trying the current provider as well, so haven't given up all hope just yet.

[northernruth]

Hiscox are reeeeeely expensive tho. You don't have to have contents with them if they will cover buildings, go for contents cover elsewhere (I am with Direct Line) and the contents will exclude damage for subsidence. CLearly if you are worried your house will collapse then that's a risk you might not want to take, but my cracks are small and never get any bigger so I'm happy to exclude it and keep an eye ;-)

Bizarrely if you DO need underpinning then it's easier to get insurance. But I'd raise it as an issue in the purchase and get the vendor to initiate a claim on their insurance policy, they can then transfer to you and if the cracks get bigger then existing insurer pays

[ASillyPhaseIAmGoingThrough]

Can u rent the house during monitoring and buy when their insurance claim is complete?

[mrsfox]

Thanks very much for the advice and suggestions. Unfortunately we can't rent the house while it's monitored as the vendor needs to sell it in order to buy another house. Although we might suggest this in a last resort situation.

Adrian Flux have just come back to say that they will cover for subsidence on the condition that we have the cracks monitored, and with excess on subsidence raised to £5,000. The premium would be £790, which for London doesn't seem outrageous.

We'll also see what the existing insurers say and we are going to negotiate on the purchase price - fortunately the vendor is desperate to sell so we are in a fairly strong position. DH's view is that we buy this house whatever, given we don't have the option of staying where we are and with a new baby on the way (plus a toddler to think of). We do plan to stay in this house for a good 20 years, but equally it worries me that we might find ourselves having trouble selling it when the time comes.

Sorry to burble on. I'm just hating the uncertainty so close to my due date.

[ASillyPhaseIAmGoingThrough]

You will have no problem selling or getting insurance on if its underpinned. I know your report says its not subsidance, you are on clay with shallow foundations in drought times. I would cut down ant trees in the garden too if I were you.

[mrsfox]

Thanks, SillyPhase. My sensible side tells me that if no one bought houses with cracks or underpinning in London then the bottom would drop out of the housing market here, so I think you're probably right.

[marilynmonroe]

Mrs fox - we were in a similar situation a couple of years ago. i was v pregnant and had to move before baby arrived. The house we bought had previous subsidence and there was no paper work s had to get a structural engineer in. no insurance company would not touch us and it was very stressful.

in the end Aviva took us on. there was no premuim and the excess is only £1k. they were brilliant.

good luck!

[suburbandweller]

I'm fairly sure the exisiting insurer is legally obliged to offer insurance to you if the issue has been reported to it as potential subsidence requiring monitoring (because most other insurers won't touch it, as you are finding out). It might not offer you a good price though, properties with this sort of "movement" are notoriously expensive to insure.

[mrsfox]

Just a quick update to say thanks for the advice, and it looks as though we'll be going with the Adrian Flux quote. We've had good news from a builder who looked at the cracks yesterday and said that it's all a storm in a teacup - the house is very structurally sound and he thinks we're getting a bargain.

So we should be completing around about my due date (eek!) and moving as soon as we can after the baby is born. Fingers crossed for no repeat CS!!

Thanks again!

[ASillyPhaseIAmGoingThrough]

I hope it goes well, post an update please when you have baba etc.

[mrsfox]

Will do! No signs yet...

[ANTagony]

I did the same brought a house with querry subsidence needs monitoring. The sellers registered a claim under their insurance and a benefit of claim letter was passed to me. After two years monitoring and owning the house the insurers then repaired the cracks as their was no further movement. I did insure with the same people for the first two years though.

Good luck

[catastrophewaitress]

Hi. Late to this thread and sounds like you're already sorted, but in brief we were in a similar position 2 years ago, only our surveyor did not recommend a structural report as he reckoned the movement was historic not ongoing, but wording in report said "no guarantee it won't recur" etc. We were upfront with the survey findings and got turned down in a few places, eventually our sellers contacted their insurer to explain the situation and were told we can take on the policy. Insurer wanted the cracks fixed but the cost was way below the 1k excess so sellers paid for that. We cannot shop around for home insurance and will stick with the current provider for now but it all got sorted in the end. Good luck with the move and forthcoming arrival.

[mrsfox]

Just a quick update - in the end Adrian Flux were the only people to quote for buildings insurance, as even the current insurer declined, but the premium is about normal for that area, and the cost of repairing the cracks is under a grand, so we went ahead and we completed on the house yesterday. Very relieved!

And in other news, baby Tessa May arrived on 6 July after an epic 55 hour labour, but I managed to get my VBAC so am very happy!

Thanks again for the advice. We will be moving next week.