Insurance company set out to void policy

[Andor1542]

Hello,

I’m looking to see what recourse (if any) we have in our situation.

Background
We purchased a house a few years back and in the process my mother in law happened to go past whilst there was a workman up the side of the house we were considering placing an offer on. We contacted the estate agent and asked what was going on and were told another customer had spotted something and so the vendor called their insurance company to check for subsidence. That the insurance company sent an assessor out who checked and found no evidence of subsidence and the house just needed some repointing - which the vendor has arranged and sorted.

we asked our solicitor to secure confirmation that there was no structural issues with the property and they got a letter of repudiation from the vendor which they got from their insurer.

The letter is all we know about the issue. We did not observe any issues ourselves but obviously the estate agent assured us all was fine and we went in to pursue the house.

The letter does indeed confirm no evidence of subsidence. However, within the letter reads

As we discussed I could not detect any evidence of current subsidence damage to the buildings. It is my opinion that the slight cracking to the south facing front elevation of your hose has been caused by thermal expansion. The cracking is essentially vertical which indicates that the movement has been from left to right rather than up and down. The cracks should be raked out and repointed with a weak mix mortar which should be better able to accommodate this type of movement which will inevitably occur on such a south facing elevation.
Internal cracks are of no structural significance and should be filled as part of the routine redecoration and maintenance of the house.
The cost of repairing such damage is not covered under your policy because it has not resulted from subsidence of the site or the action of any other insured peril. I must therefore confirm that your buildings insurer is unable to offer any financial assistance on this occasion.

.

This letter was bundled in amongst a sizeable amount of documented from the solicitor but from my understanding of it - what they observed was some wear in the mortar ok the south facing wall which simply needed repointing. Mu understanding is there are no structural issues with the wall.

When we took out our insurance policy we used compare the market and the question posted is

Has your house ever had cracks on its external walls?

We only need to know if cracks have affected the main structure of your wall. You don't need to tell us about minor cracks that have affected render or plaster only.

We answered no. My understanding being that whatever observed did not affect the main structure of the wall and was simply wear to be expected of a house of the age on the wall facing south.

Our issue

We put in a claim for an unrelated matter of accidental damage. As part of the validation checks carried out by the insurer they found a record in the database for a claim for subsidence. They came to us and asked us for more details. I provided the same explanation as above and provided the letter. They have seen the mention of cracks and although accept that there is no subsidence; have set out a notice to void the policy as cracks were not disclosed and in their view should have been. They state they accept it was a ‘careless mistake’ and not intentional and will refund all premiums paid. We have 14 days to appeal.

What option do I have from here?

my main concern is now having to declare a voided insurance policy for the rest of my life.

- I don’t care about the claim. I can let it drop. It’s not enough value to lose sleep over and less than a voided policy will cost me over the years?
- can I ask the broker to cancel the policy to avoid it being voided?
- It I can’t avoid it being voided I intend to complain to FOS. There is no reason not to as far as I see.
- Should I seek formal legal advice to fight the matter? Whilst costly it may work out beneficial in the long run.

[wales01man]

You don't need to tell us about minor cracks that have affected render or plaster only. These words may be important they stated there were cracks in the brickwork externally not in render or plaster?

[Andor1542]

I’ve literally copy and paste everything they said about it. I read it as there was only cracks in the mortar as they suggest it should be scraped out and repointed as the suggested remedy. I’m not aware of any cracked brickwork.

should I contact the previous company who inspected the work for more information? I feel like I should have probed into this more before buying the house now, yet not even our solicitor suggested it needs further investigation or concern when providing their reports.

In my head this sounds like a general upkeep job and I suspect most house probably need repointing at some stage. Especially south facing walls exposed to the sun for most of the day as is the case here.

[Pezza54]

My buildings insurance policy doesn't mention cracks in external walls.
I was asked " to the best of your knowledge has there been a claim for or the property suffered from subsidence, heave or landslip in the last 25 years?"
Your insurance company may be concerned unduly so, about the surveyor's report regarding external wall cracks and possible subsidence.
The letter uses the word "I" but doesn't state it is a surveyor's letter so "I" could be the vendor, not a qualified building surveyor or structural engineer experienced in detecting subsidence

Normally a building surveyor or structural engineer would use "tell-tales" to monitor cracks over several months before preparing a report. This report was for the insurance company to aid in a decision whether to accept a subsidence claim, not for a prospective buyer.
Had your MIL not spotted the men working on house external wall you would be none the wiser.

BUT if the previous owner made an insurance claim for subsidence and even though it was turned down, the detail about the claim should have been answered in the vendor's solicitor questionnaire about the property.

[PallasAthena]

The letter uses the word "I" but doesn't state it is a surveyor's letter so "I" could be the vendor, not a qualified building surveyor or structural engineer experienced in detecting subsidence

I suspect the letter is from the insurance company's Loss Adjuster but it is unclear whether it is from a 'general' loss adjsuter or whether they instructed a specialist in subsidence to examine the house. In either case I agree that it was prepared solely for the pupose of deciding whether the Vendor had an insurance claim under their policy.

[Pezza54]

Had this happened to me, after I became aware that a subsidence claim had been made by the previous owner, I would have to answer "Yes" to the question in the 2nd sentence in my previous post to prevent my policy being invalidated at a later date
Knowing how the cost of my buildings insurance would be affected over future years I may have decided not to continue with the purchase

[Andor1542]

I’ve just gone back through the solicitors paperwork.
all the form mentions is:

6.5 Has the seller made any buildings insurance claims?
• No
If Yes, please give details:
Insurance claim made but withdrawn following survey and advice from insurers. Please see attached report. Defects now rectified.

The report provided is what I pasted above. As suggested, its purpose was for the vendor and is not detailed.

Our homebuyers report made no mention of cracking.

[Andor1542]

I’ve looked back at the letter. I won’t public the persons name but the signature attached reads

[Name] BSc (Hons) MRICS C.BuildE MCABE Dip CII (Claims)
Building Consultant

[PallasAthena]

So the reprot was written by someone who was a Chartered Surveyor and a Chartered Building Engineer so was well qualified to given a professional opinion on the cracks.

Have you used your insurer's internal complaints policy?

And if that fails a trip to the Ombudsman beckons. One issue here will be whether you reasonably have been expected to know that the insurers question included "re-pointing" of mortar between bricks (which is what vendor told you needed to be done) and which is a routine maintenance matter, and when your own surveyor pre-purchase reported no evidence of cracking.

I think your insurers are being over sensitive about the word "subsidence" even though they didn't actually ask you if there had been subsidence or whether any previous owner had submitted a subsidence claim. Even if that had it would be reasonable for you to assume that a report to insurers of something that might be subsidence but was found by professional survey not to be can properly be called "there has been no claim for subsidence".

[Pezza54]

Withdrawn or not a claim was still made and can affect the cost of future insurance. Unfortunately Insurance companies do attempt to invalidate a policy at every opportunity when a claim is made

It surprises me that your insurance company didn't ask about any subsidence claims. Asking only for cracks in external walls is like asking if the property has suffered from heavy downpours as opposed to flooding

[PallasAthena]

I agree with you that insurers may increase premiums if you report something that turns out not be a claim but this is most common in motor insurance. I've never come across it in home buildings insurance and I doubt the same statistical projections used to justify the practice in motor insurance (that having one incident has a statistically significant increase in the probablility of having another incident) exists in buildings insurance. Not that that would stop them if they thought they could get away with it.

I don't agree with you that reporting building damage which is professionally inspected and confirmed not to be subsidence can count as a subsidence claim under the policy. If, as a question of fact, it is established that there has been no subsidence event it canot be a claim for loss or damage caused by subsidence. Although it wouldn't surprise me if insurers coded it that way on their internal records.

[Pezza54]

Please see the second sentence in my post 4. The insurance questionnaire would have included the words "an approved claim" and not just "a claim"

[des8]

I agree with you that insurers may increase premiums if you report something that turns out not be a claim but this is most common in motor insurance. I've never come across it in home buildings insurance.

I don't agree with you that reporting building damage which is professionally inspected and confirmed not to be subsidence can count as a subsidence claim under the policy. If, as a question of fact, it is established that there has been no subsidence event it canot be a claim for loss or damage caused by subsidence. Although it wouldn't surprise me if insurers coded it that way on their internal records.

The problem with modern trend to outsource claims to companies who employ unqualified staff and couldn't read a policy if it was written in words of one syllable.

[Andor1542]

I have double checked what compare the market asks as this was the medium used to take out the policy.
it asks if the house has ever suffered from subsidence. It does not ask if a claim has ever been made for subsidence. Based on the report provided to me, I would think it reasonable to answer ‘No’ as the assessor has seemed no evidence of subsidence. This however, doesn’t seem to be an issue. My insurer seems to accept there is no issue around subsidence and are basing the need to void the policy based only on this crack mentioned in the report.
I have submitted an appeal based on the guidance provided and that my understanding was the issue was a routine maintenance issue and not a structural problem.

I will prepare to have to take my case to FOS. It seems my case to present is just that. The report was not prepared to an advise me about cracking and it’s not adequately prepared to advise me on such issues. That I believed my answer to be correct as it so my belief the reporter issues were deemed by a professional to be routine maintenance issues caused by weather and not a structural problem

[PallasAthena]

Please see the second sentence in my post 4. The insurance questionnaire would have included the words "an approved claim" and not just "a claim"

I saw it. I stand by my opinion. I do not agree with you. Nor would I expect an insurance company to use the expression "approved claim" in a formal consumer insurance proposal. In 25 years in the business I have never seen a proposal form question phrased that way. The phrase would be extremely disadvantageous to the insurer.