When a customer put in a claim for subsidence damage, he was surprised that it was turned down. We stepped in to resolve the disagreement over the policy definition of 'stabilisation'.
The insurer agreed that subsidence was the cause of the damage Christopher claimed for under his buildings policy. However, it refused to pay for any stabilisation work. Christopher felt this work was essential to put matters right and prevent future problems.
The insurer’s engineers prepared a report stating that minor movement would probably continue unless the foundations of the house were stabilised. The insurer said it would pay for any superstructure repairs and any necessary redecoration, as and when further movement occurred.
But, it argued, stabilisation wasn’t strictly part of its liability, since its policy only covered the cost of repairs. It considered stabilisation to be "preventative, not restorative".
After complaining unsuccessfully to the firm, Christopher came to us.
What we said
We listened to both sides of the story. We considered the insurer's contractual obligation under the terms of its policy. As is usually the case, the insurer was obliged to repair, or pay the cost of repairing, the damage.
In our view, the proper repair of a building requires something more long-lasting than a temporary patch-up. Filling cracks and repainting can’t be regarded as repairing subsidence damage if, within a relatively short time, the cracks are likely to reappear.
The expert evidence indicated that, without stabilisation, the movement that had caused the damage would continue. We asked the insurer to meet the cost of stabilisation.
Related case studies
Sataj felt an insurance company racially discriminated against him
Consumer complains about impact of underinsurance