I have a flurry of subsidence claims on my desk, where the policyholder has felt poorly represented by their insurers agents, Innovation Group. I am aware of this company and their practices, but I decided to do some further research.
The Guardian suggested in 2008, although CIS and RSA would not confirm or deny it, that outsourcing companies such as Innovation Group, were essentially fixing subsidence claims costs with insurers. If they can settle the claim within the purchase cost, say £10,000, then the balance is retained by the outsourcing company. If they have to spend more than £10,000, then the claim becomes a loss maker.
If this is true, then there is an incentive for the outsourcing company to actively seek to reduce the amount spent, over and above that which the policy seeks to pay. Is this fair? Given that subsidence claims are the most technical to resolve, the policyholder is at a disadvantage. This certainly beaches the idea of good faith that the insurance policy implies.
Our experience also suggests that outsourcing companies are not advising policyholders that they have cover for their own professional engineer, and declining that these costs are covered. This offers no alternative view to theirs, and stops any potential suggestion of underpinning.
The key here is to not underpin – this is the most expensive part of the subsidence process. Often, outsourcing companies opt to patch and repair the cracks and fail to stabilise the actual cause. But the ombudsman is very clear.
“In our view, the proper repair of a building requires something more long-lasting than a temporary patch-up. Filling cracks and repainting cannot properly be regarded as repairing subsidence damage if, within a relatively short time, those same cracks are likely to reappear. The expert evidence had indicated that the insurer should meet the cost of stabilisation.”
Please feel free to call us if you have a similar claim.
You can read the full article here: www.theguardian.com/money/2008/jun/01/homeinsurance.property