House insurance - company attempting to reduce cover

twigggs

I have a question here on behalf of an older friend of mine who would be ofay with posting anything online but has been put in tough spot by his an insurance company with regard to the renewal of his house insurance.

He purchased a house 40 years ago, filled out the proposal truthfully and got cover. No company wants to insure a house in Cork for subsidence now days. However 40 years ago subsidence wasn't a hot topic and it was included in the policy.

My colleague's renewal came last week and he asked if I could help him pay it online. He had the figure on the renewal and all so we assumed that it was just a matter of putting in credit card details and paying. However on logging in we discovered the we had to go in to a live chat to pay. During the live chat there was multiple questions about subsidence. My colleague could only say that there was no change since that he was aware of (not being an engineer). In the end they sent a big long list query in the chat. My colleague in his 70's was afraid to answer this as it appeared like a means of pairing back his cover or getting him to say something that would invalidate his cover.

In the end he dropped the chat and posted them of a cheque for the original renewal figure that they had sent him. They contacted him this morning to say they were rejecting the cheque until all questions were answered. Are they allowed do this or it the renewal offer he received in the post a legal contract offer?

The second angle in this it are they allowed to change the conditions of the policy. If you took out life assurance 40 years ago, they couldn't go changing your policy as the years progressed. Maybe that is not like with like I don't know.

With regard to the subsidence in the property, the truth is my colleague has observed no change since he owned the property. Was there subsidence prior to that, quiet possibly a bit yes. Most old houses in Cork city suffer from some level of subsidence. There was no mention of this on the initial proposal though are the company allowed to move the goal posts now?

kirving

They can change their policies alright. Particularly since the house is older now, subsistence may be more of a likelihood.
And as you say, it has subsided a bit.

Of there was a problem with the house, it's got to be addressed and the insurance company informed at the earliest opportunity. They're not going to cover something this year which may have happened in the past, as that would be like crashing my car, and then buying insurance after

The 40 years of premiums doesn't really come into it. Those payments have insured the house for all manner of things in the interim, so it's not like that money has gone to waste.

twigggs

Thanks Kevin. The thing is the structural condition of the house hasn't changed in the 40 years of ownership. It may well have subsided a bit before that. It is over 100 years old. So the fear was they would effectively be reducing cover though there has been no noticeable structural change since they initially covered.

The other factor is if my colleague had just returned a cheque to the renewal quotation he received in the post instead of engaging online the situation wouldn't have occurred.

Eggs For Dinner

Every year is a new contract and cover, terms and conditions can be amended. Either party is free to reject the contract. The insurer can withdraw their original offer prior to acceptance. In this case they rejected payment.

Outkast_IRE

How long till renewal day ?

If its a little bit away and there is any suspicion of subsidence should he think of getting an engineer out pronto and boot in a claim ASAP before renewal if he needs it ?



If he is paying in for 40 years i would have no qualms about it.

iwillhtfu

There's a good chance there my have been a subsidence claim with his insurer somewhere in his locality.

coylemj

Outkast_IRE wrote: »

If ...... there is any suspicion of subsidence should he think of getting an engineer out pronto and boot in a claim ASAP before renewal if he needs it ?

OP's friend has owned the house for 40 years, during which there has been no subsidence.

He needs to be aware that at all costs, he does not want to push his current insurer to the point where they decline to renew. Because if that happens, he will be obliged to declare it to any other insurers he approaches for cover. And that will put him in a very bad situation. Because the default response from that point forward is that everyone will refuse him cover.

twigggs

Eggs For Dinner wrote: »

Every year is a new contract and cover, terms and conditions can be amended. Either party is free to reject the contract. The insurer can withdraw their original offer prior to acceptance. In this case they rejected payment.

Yes I suppose it does make sense that they can change the terms year on year. I would have thought if they have made the offer in writing that they would have to stand over it.

twigggs

Interestingly just speaking to my colleague this morning, there had been further phone calls and the situation is not quite what we had anticipated.

Our assumption was that the company wished to trim back the cover. They have now agreed to cover him, however they wish to send a risk assessor to the property to assess if there is any sign of subsidence. If there is, they will push through a claim to rectify now this so that it doesn't become a bigger and more expensive problem at a later date. Further more this claim will be at the request of the insurance company and will not affect my colleagues no claims record!

A much better situation than I or my colleague were anticipating. If this is the all correct there must be something tying the company to the cover outlined existing policy proposal. They are certainly not doing this out of the goodness of their hearts. Strange one.

coylemj

twigggs wrote: »

Our assumption was that the company wished to trim back the cover. They have now agreed to cover him, however they wish to send a risk assessor to the property to assess if there is any sign of subsidence. If there is, they will push through a claim to rectify now this so that it doesn't become a bigger and more expensive problem at a later date. Further more this claim will be at the request of the insurance company and will not affect my colleagues no claims record!

So let me get this straight...

1. They're going to investigate (and possibly pay to fix) a problem which your friend has not reported. You told us that he's lived in the house for 40 years with no subsidence in that period but 'possibly a bit' before that.

2. If they do pay, it won't count as a prior claim at renewal time.

3. They're prepared to continue cover as before, even if this does turn out to be subsidence.

seagull

I'd be looking for that in writing.

Eggs For Dinner

I think your friend is not getting the full picture. A claim relates to when the insured event occurred, not when it is reported. As he has been with the same insurer for a long time, there shouldn't be any dispute that it occurred on their watch. If they believe subsidence is in the immediate vacinity, it would be in their interest to tackle the problem now.

Any claim payment made for repairs and remedial work has to be disclosed to potential insurers. If investigation costs only are incurred, they don't. Basically, if they insurers confirm there is nothing of concern, they will close the file and pay the engineer

coylemj

Eggs For Dinner wrote: »

A claim relates to when the insured event occurred, not when it is reported.

But the OP's friend says that there has been no subsidence in the 40 years he has owned the house...

twigggs wrote: »

He purchased a house 40 years ago....

With regard to the subsidence in the property, the truth is my colleague has observed no change since he owned the property. Was there subsidence prior to that, quiet possibly a bit yes.

Eggs For Dinner wrote: »

As he has been with the same insurer for a long time, there shouldn't be any dispute that it occurred on their watch. If they believe subsidence is in the immediate vacinity, it would be in their interest to tackle the problem now.

According to the OP, nothing (by way of subsidence) has happened since his friend bought the house. So the insurance company wouldn't be liable for a cent.

But the OP is telling us that the insurance company is going to have the place checked out and pay for any necessary remedial work. To fix a problem that goes back at least 40 years?

Eggs For Dinner wrote: »

If they believe subsidence is in the immediate vacinity, it would be in their interest to tackle the problem now.

Wouldn't they either decide (based on the past 40 years) that this house presents no major risk of a subsidence claim or, (if it does) refuse cover? Why would they spend money on it when there has been no subsidence while they have had a policy on the place?

twigggs

Eggs For Dinner wrote: »

As he has been with the same insurer for a long time, there shouldn't be any dispute that it occurred on their watch. If they believe subsidence is in the immediate vacinity, it would be in their interest to tackle the problem now.

I would have thought the insurance companies options were to hike up the premium if subsidence is to remain covered or offer a lower premium with subsidence cover removed from the policy.

If it was removed before there was a claim I thought the company would be in the clear future claims.

twigggs

coylemj wrote: »

But the OP's friend says that there has been no subsidence in the 40 years he has owned the house...

The house isn't perfectly level but it is well over 100 years old. Going by my own experience of trying to buy an inner city house in Cork engineers have flagged signs of subsidence on nearly everything I looked at.

coylemj wrote: »

According to the OP, nothing (by way of subsidence) has happened since his friend bought the house.

Yep according to the owner there is no obvious change in the last 40 years. No doors catching or cracks appearing on external walls.

Initially I posted to see if the company could remove subsidence cover and if the renewal offer could be withdrawn as I thought that was what the company were aiming for. That seems to have been off the mark.

As an aside, my understanding it subsidence work on mid terrace houses (as this is) is often a bad idea I hear as it puts the house out of sync with attached houses and can cause more problems. While the owner didn't want that cover removed he was unlikely to be ever claiming on it unless it was absolutely necessary.

It is a very strange one, interesting to see how this plays out.

Eggs For Dinner

twigggs wrote: »

I would have thought the insurance companies options were to hike up the premium if subsidence is to remain covered or offer a lower premium with subsidence cover removed from the policy.

If it was removed before there was a claim I thought the company would be in the clear future claims.

The options you suggest are correct. However, subsidence is a tricky one. Removing cover now does not release the insurers from their obligations if it can be established that it occurred prior to the removal of cover, even if not obvious. An insurer wouldn't be able to cite late notification if there is subsidence not readily visible at this stage. I suspect that's why it is being inspected