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 to its owners or occupants.
Policies often refer to the ‘the site’ when talking about ground movement cover. This usually means the prepared ground, including made-up ground, on which a building is erected after the foundation trenches have been dug, and immediately prior to the first step in the actual process of building.
Types of complaint we see
Ground movement cases that customers refer to us can involve:
- an insurer rejecting a claim for subsidence damage because the damage wasn’t caused by subsidence but by an uninsured event, such as settlement
- claims taking a long time to resolve
- insurers not communicating with the customer
- an insurer not providing adequate alternative accommodation while repairs are being made
- an insurer proposing a claim settlement that the customer feels isn’t enough, for example when the customer wants the entire property underpinned but the insurer says that less extensive remedial measures will do
- repairs completed by an insurer that the customer says are poor
- repairs completed by an insurer that have caused further damage
- an insurer being unwilling to provide continued cover following a subsidence claim
What we look at
One of the first things we must look at is the probable cause of ground movement that has caused damage to a property.
There are four main causes, as defined by the Financial Conduct Authority (FCA): heave, landslip, settlement and subsidence.
Definitions of ground movement types:
Downward movement of sloping ground.
Settlement (also known as consolidation or compaction)
Downward movement as a result of soil being compressed by the weight of a building within 10 years of construction.
The ground beneath a building sinks, pulling the property’s foundations down with it. It usually occurs when the ground loses moisture and shrinks, which can be caused by prolonged dry spells. It may also be caused by trees and shrubs which can absorb significant volumes of water from the soil.
You can find more information about how we look at subsidence cases below.
Subsidence cases can be complex, requiring expert evidence and technical data. We’ll need to look at the symptoms of the problem to find out what caused it.
Subsidence is usually caused by one or more of the following situations:
Clay shrinkage is one of the most common causes of subsidence. Clay is made up of about 30% to 35% water, so soil with a high clay content can dry out as a result of nearby vegetation sapping the water, particularly during long, hot summers. The volume of the soil decreases and the building's foundations subside.
Sometimes, a tree is the cause of structural problems to a property because of shrinkage of clay subsoil beneath the foundations.
An insurer will usually instruct an arboriculturalist to advise on the most appropriate remedy, which may include pollarding (cutting back the tree’s crown to the main trunk), topping, thinning or removing. Installing root barriers can stop the encroachment of roots, but many experts don’t consider them effective or economic.
The Domestic Subsidence Tree Root Claims Agreement
If you’ve signed the Domestic Subsidence Tree Root Claims Agreement (from the Association of British Insurers) you can’t pursue recovery actions in the courts against domestic owners of trees for subsidence or heave caused by tree roots. But if the owner was aware of the problem and didn’t take reasonable preventative measures, signatories can pursue recovery actions.
The agreement doesn’t apply to legal actions against local authorities or non-domestic landowners.
Sometimes, over-enthusiastic tree management can actually have the opposite effect to the one that was intended because the soil can become over-saturated with moisture and the ground swells up, causing heave. Pruning to manage trees isn’t always a good long-term solution. It may be better to remove them.
Escape of water
A significant or long-term escape of water, from burst or leaking pipes, for example, can wash away the fine particles of the underlying soil. When this happens, the volume of soil beneath the property reduces and the property foundations subside.
The escape of water could also cause the underlying soil to soften, giving it reduced ability to support the weight of the property, and causing the property’s foundations to subside.
If subsidence is caused by an escape of water, the customer’s claim for loss or damage is usually considered under the escape of water peril clause of their insurance policy at first. This usually has the advantage for the customer of involving a lower policy excess.
However, it’s not unusual for there to be a specific exclusion for subsidence damage under this peril clause, meaning that the claim would be considered under the subsidence peril clause, which usually involves a higher excess.
A solution feature is an erosion of the underlying soil resulting in an underground cavern. This eventually gives way and may cause subsidence to the site above or nearby. A solution feature can occur in limestone or chalk and is often triggered by an escape of water or a rise in the water table. The first sign is usually a small hole appearing at surface level.
Buildings sometimes subside as a result of the collapse of underground mines, even long-disused mines. Although this is a valid insured event, there may be a third party who can be held liable for the damage. So although an insurer should still deal with a customer’s claim, it may be able to recover what it pays out under the customer’s insurance policy by bringing a claim against the third party.
In some situations, it’s reasonable for the loss or damage to be dealt with by the third party itself, with the insurer’s cooperation. This doesn’t end the insurer’s liability for the claim, but can be the most practical way of moving the matter forward.
Every property will ‘settle’ by a small amount for a short time after it is built due to the weight of the building compacting the soil beneath its foundations.
Soil compaction can be exacerbated because of:
- poor ground
- inappropriate material used by the builders when making up ground
- lack of compaction of made-up ground material
- the way the ground is prepared before building starts
Any of these may result in considerable downward movement of the property or floor slabs and damage to the property.
We often see cases where floor slabs have subsided from similar issues relating to the fill used beneath the slab. This fill is not considered part of the site and most policies exclude subsidence of floor slabs where there’s no movement of the foundations as well.
Decomposing organic fill
As organic fill decomposes, it loses volume and resilience. This causes the downward movement or compaction of the site and the structure to move downward.
Removing trees to prevent or halt subsidence
If a case involves a third party, for example a next-door neighbour, who refuses to allow their trees to be reduced or removed, you can take legal action. But we’d expect you to:
- consider the impact this could have on the relationship between the customer and the third party
- discuss the situation with the customer before proceeding
Without taking legal action, you can’t force a third party to reduce or remove their trees. However, if you weren’t prepared to fund legal action, we’d expect you to have identified another way to stop the movement so that you could repair the subsidence damage.
Because it’s in the interests of both parties that the movement is stopped and repairs completed, we’d expect the customer to cooperate with your attempts to do this.
If you propose to take legal action but the customer refuses permission, we’d consider the reasons behind the customer’s decision. But we’re unlikely to ask you to find an alternative way to stop the movement if it involved additional expense.
Problems that can be confused with ground movement
There are a number of problems with properties that look like they could be caused by ground movement, but in are fact caused by other factors, for example:
Sulphate damage occurs as a result of a chemical reaction – usually triggered by water – between cement paste in a concrete floor slab and sulphates in the filling under the slab.
The symptoms are similar to those caused by heave so sulphate damage is sometimes mistaken for heave. Policies don’t usually cover sulphate damage, unless it’s triggered by an insured event, for example, escape of water from a water tank.
Every property will suffer from cracking at some point, especially those constructed by traditional methods. Cracking in itself isn’t evidence of subsidence. It can be caused by a number of other things which are often uninsured, including:
- settlement (also known as consolidation or compaction), usually the downward movement of the site on which a building stands caused by the building’s weight
- self weight, where the weight of material used to make up the site compacts the soil beneath it
Most new buildings will settle during the first few years after they’re built. This sometimes gives rise to superstructure cracking and concern about subsidence. But as long as the building moves uniformly, there may be no structural problems or serious damage.
The hallmark of subsidence is differential movement, meaning different parts of the building moves at different rates. This isn’t the case for settlement apart from in cases where:
- buildings sometimes just settle in this way
- new additions to an existing building will often settle differently to the original building
If an insurance policy doesn’t exclude settlement (also sometimes called consolidation or compaction), we may decide a claim shouldn’t be rejected just because the movement is connected to the weight of the building.
This is the expansion and contraction that occurs when there are changes in temperature. It can occur on a daily or seasonal basis or while new buildings dry out. For example, masonry heats up and expands during the summer and cools and contracts during the winter. This can cause cracking which, although unsightly, isn’t structurally dangerous. And it’s not subsidence.
Areas of buildings that are particularly susceptible to thermal movement are:
- parts where two different materials meet, for example, wood and plaster
The problem can be particularly acute where there’s been no allowance made for movement in the structure.
Failure of a lintel – support for the brickwork above the opening of a window or door – is characterised by diagonal cracks above windows and doors. The cracks can sometimes be mistaken for subsidence because they look similar. It can usually be diagnosed from the pattern and position of the cracks and is usually caused by:
- poor design
- a missing lintel
- poor workmanship
- failure of the material the lintel is made from
Many insurance policies exclude lintel failure.
Poor design, materials or workmanship
Subsidence damage to buildings may be due to faulty design and poor workmanship (or both) – neither of which are insured, for example when:
- there are insufficient wall ties (supporting metal) between the inner and outer walls or wall ties have corroded and failed because of poor construction or poor materials causing the exterior wall to bulge and crack
- there’s a lack of lateral restraint, where an outer wall isn’t adequately held in place by the internal structure, such as the floors
- the downward forces operating on the roof make the wall push out, causing damage (also known as roof spread), often when roofs are inappropriately re-tiled, for example, if old slates are replaced with heavier concrete tiles
- the site shows potential for subsidence but this wasn’t taken into account when the foundations for an extension (including structures such as conservatories) were designed
Read a case study about poor design.
Subsidence damage to other parts of the property
Many insurance policies won’t cover subsidence damage to parts of a property defined as buildings unless the main residence is also affected, for example:
Policies differ in how they define the main residence or the buildings. Some include outbuildings and garages as part of the home, others don’t. We often see complaints about this but we don’t view it as an unusual or onerous restriction.
As long as the policy is clear and unambiguous, we don’t expect you to have drawn a customer’s attention to it.
When considering a complaint, we’d look at the wording and definitions in the policy documentation to see what exactly is covered.
A change of insurer
We see cases where the customer has changed their buildings insurer and then made a claim for subsidence.
The new insurer says that the damage caused by the subsidence predates its policy and it should therefore be covered by the previous insurer, but the previous insurer doesn’t agree.
Read a case study about a change of insurer.
To deal with these situations, the Association of British Insurers (ABI) published its Domestic Subsidence Agreement. If you subscribe to this agreement, this is how you’ll need to handle change of insurer claims:
- If the claim is made eight weeks or less from the start date of the current policy, the previous insurer deals with the claim.
- If the claim is made one year or more from the start date of the current policy, the current insurer accepts the claim.
- If the claim is notified more than eight weeks but less than one year from the start date of the current policy, the claim is accepted and dealt with by the insurer who was first notified about the claim and the cost of the settlement will be shared between both insurers.
It’s irrelevant whether most of the damage occurred before the current policy started.
If the customer was aware of subsidence when they took out the new policy but didn’t disclose it, the current insurer may still be able to void the policy on grounds of material non-disclosure.
But being aware of cracking is not necessarily the same as being aware of subsidence – most customers don’t have this level of expertise. So it’s very important to find out exactly what the customer knew when they took out the policy.
The Domestic Subsidence Agreement doesn’t apply when a property has changed hands and there’s been a change of policyholder.
Handling a complaint like this
You should make customers aware from the start that subsidence claims are usually complex and may involve lengthy and inconvenient investigations and repairs.
Many of the complaints we see are about poor communication with customers, so it’s good practice to keep them updated on the progress of their claims and consult them where appropriate.
You’ll usually need to carry out a thorough investigation into the cause of loss or damage caused by subsidence. Monitoring over 12 months is sometimes reasonable because all the seasons are covered.
A thorough investigation would usually involve:
- making shallow trial holes to determine how deep the foundations are, what they rest on and whether nearby drains are leaking
- hand-augered boreholes to determine the nature of the ground at depth and obtain samples for analysis
- CCTV inspection of drains close to the property
- crack monitoring to see whether the building is still moving, the extent of the movement, and whether it’s seasonal which may point to tree root desiccation
If you haven’t done any of these, we may ask you to reinvestigate the claim.
Putting things right
Most household insurance policies, and some commercial property insurance policies, cover loss or damage caused by subsidence, heave and landslip. They usually cover the cost of repairing the loss or damage and not the cost of preventing further subsidence.
This means the cost of repairing damage to the building's superstructure is covered. But the cost of stopping the building from moving in the future isn’t.
If the building is still moving, you’ll usually need to carry out work to stop the movement first to make sure that repairs are effective and will last for a reasonable period of time.
There are several ways to settle a complaint when arranging to repair the damage caused to a property by ground movement, depending on what the problem was.
Some ways to put ground movement claim complaints right include:
- finding a fair cash outcome
- underpinning and other repairs
- making an effective and lasting repair
- when to repair and when to replace?
- finding a good match
- stabilising the building
- superstructure repairs
Subsidence needs to be stopped before the property is damaged further.
As an insurer, you’ll need to identify the cause of the subsidence and stop its effect on the property by removing or pollarding vegetation, or repairing leaking drains, for example.
Most buildings insurance policies only cover the cost of repairing the damage caused by subsidence, not proactively preventing any future subsidence. What’s important is that you make the property stable.
If a customer complains that any cosmetic repairs are inadequate, we’ll treat them in the same way as other disputes about repairs under insurance policies.
We’ll compare expert opinions you’ve been provided with, with the actions you’ve taken or recommended to see if you’ve acted reasonably. If there’s conflicting expert evidence about the appropriate remedy, we’ll decide which is the most persuasive. Occasionally, we’ll ask for further independent evidence.
Stabilising the building
So that repairs are effective, you’ll need to make sure that the property is stable. You’ll usually pay for any works needed straightaway to stabilise the property to solve the immediate problem not to prevent future subsidence.
Once the property has been stabilised, repairs to the superstructure can be carried out. Cracks can be filled and redecoration can begin. The masonry might have to be strengthened.
Underpinning is often seen as a permanent and effective way of stabilising but is only used in the most serious cases. Also, it would usually be considered preventative, which isn’t covered under the insurance policy.
In many cases, a building can be stabilised by other action, for example, by:
- repairing leaking drains
- removing vegetation
- removing other external causes
- providing additional strengthening
If you use a method other than underpinning, we’ll consider whether that method is adequate to stop the movement based on expert evidence.
Compensation when a property’s value decreases
Sometimes the cost of repairs is greater, or almost greater, than the amount the customer has insured the building or contents for.
If the property is beyond economic repair, the insurer may offer the customer a cash settlement representing the reduction in the property’s value. This is worked out based on the sale value immediately before the damage, less the residual value after the damage.
The value must be calculated using expert evidence, for example, from surveyors or reputable estate agents.
Sometimes, customers feel the property has decreased in value as a result of the subsidence damage, even after it has been repaired and the property fully reinstated. In these cases, the customer may request an additional payment.
However, most policies exclude this. We usually say that if the property was stabilised and the superstructure properly repaired, there shouldn’t be a reduction in value.
In other cases, the amount a property is insured for doesn’t cover the cost of stabilising the site and repairing the damage. We see complaints where the insurer tries to stop payments relating to the claim once the policy’s maximum amount has been reached, even though the work isn’t finished.
But when an insurer chooses to repair damage under an insurance policy, it enters into a ‘contract to repair’, separate to the contract of insurance. In most cases, this means that the insurer isn’t able to limit the benefits to the amount the property is insured for.
So we’re likely to tell the insurer to continue to meet any costs of stabilisation and repairs beyond that amount.
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