Insurer rejects claim as ‘betterment’ – but expert opinion said it would be needed

Buildings insurance

Will came to us when he was having a dispute with his insurer. Cracking from subsidence in his garage needed to be fixed, but there was a disagreement about the extent of the repairs.


What happened

Will noticed that there was cracking in his garage, so he got in touch with his insurer. They agreed to cover his claim for subsidence damage. Both Will's and the insurer's engineers said that it would be best for the garage to be demolished and rebuilt. This is because the cracking had distorted the frame beyond repair.

The insurer said the garage could be rebuilt on the existing foundations. But Will's engineer said otherwise. Because it had been built on shallow foundations, he suggested to extent the foundation depth to meet current best practices.

Will's insurer didn't agree to this, as this would count as 'betterment'. This would mean that Will would get a better garage than he had before the subsidence. And Will's policy didn't cover this.

What we said

We checked Will's policy and found that it did cover repairing damage from subsidence. It meant that the insurer was only responsible for repairing what was already there - not adding to it. But this would only be fair if it achieved a lasting and effective repair.

The insurer had removed a nearby tree to help stabalise the ground under the garage. But Will's engineer didn't think that this would be enough to stabalise it completely. They believed there would be further movement and so, have further subsidence damage.

The engineer also showed us that at the time Will's garage was built, the foundation depth was in line with building regulations. But these regulations had now changed, so the foundation depth didn't meet the new regulation.

We spoke to the insurer and asked for their view. They agreed with the engineer but said they would consider any further damage that happened in the next five years.

We believed that replacing the garage on the existing foundations wasn't likely to be a lasting and effective repair, which was supported by expert opinion that further damage from subsidence was likely. We therefore thought the insurer should extend the foundation so it would be in line with current building regulations, and be lasting and effective.