Why do subsidence claims take so long to resolve? Chris Miller says the process can be speeded up.

If you were to visit a doctor with an ache in your left shoulder you would be taken aback if, after an inspection of your hands, eyes and ears, you were told you needed a heart transplant. Not only would you be shaken by what appeared to be a premature conclusion, you would also seek another opinion.

However, when house owners discovers cracks in their buildings and make a claim, they expect an immediate decision on repairs and, from their lay knowledge (and often advice from friends) see this as only being underpinning. When the appointed loss adjuster does not immediately make such a conclusion, the house owners suspect an ulterior motive - one of trying to save the insurance company money. In such circumstances claims can start with bad feeling and, as experience has shown, generally deteriorates.

Clear explanation is required at the start of a subsidence claim as to what is needed, the reasons and the likely time frame involved. Being briefed in this way, the house owner hopefully will then understand the parallel to the medical analogy and take some comfort from it.

A property doctor, unlike his medical colleague, has visible evidence to investigate, the cracks being the manifestation of a problem but not necessarily its location.

A trained eye
Therefore, it should be remembered that the cracking is not the cause or location of the problem, in the same way the ache is not the medical cause, but the manifestation or symptom of the underlying problem. To rely simply on the damage is not the answer and could be negligent.

At the initial inspection, a trained eye should be able to determine whether the cracks are the result of foundation movement or other unconnected causes such as thermal shrinkage, cavity wall tie failure, roof spread, chemical attack, lintel failure or any of many other superstructural causes. If the latter, then ignoring whether the insurance policy provides cover, advice can be immediately given on corrective action. If this is beyond the competency of the adjuster then he should not be on the case. In the adjusting and engineering worlds there are horses for courses, in the same way you do not visit a gynaecologist when you think you may have a heart problem!

From the start it is possible to determine whether the cracks are due to a foundation problem, but the matter does not end with the conclusion that underpinning is the solution. If the bearing capacity of the soil is being affected by extraneous factors such as leaking drains or water main, spring or tree roots, then underpinning may not remedy the situation at all. Likewise, if the foundation brickwork is crumbling due to frost decay, underpinning is of no value. These extraneous causes must be removed.

Therefore, the cause of the foundation problem must be established by way of site investigations. Logic suggests if an extraneous cause is found and can be removed, historic equilibrium will return to the building - assuming that prior to the cracks the building was stable. Once done it becomes necessary to see if this has stopped the problem, in the same way that a doctor will want to monitor the situation following a course of medication. Monitoring takes time.

No instant decisions
The question is whether the phenomenon that has caused the change is a one-off and whether or not stability will return to the building. This can only be established by monitoring the cracks to see if they worsen or fluctuate during certain times of the year. If unacceptable instability is found then strengthening the foundations by underpinning may be the solution. Partial underpinning can create differential loading problems and so is not (as many believe) the panacea to subsidence claims.

So, with a subsidence claim, instant decisions cannot be made and would be unwise, as the resultant work may not be necessary and could be counter-productive. If every claim is approached on the assumption that there is no insurance cover and the costs come out of the house owner's pocket, the prudent house owner, rather than rush in with expensive unnecessary underpinning, might wish to explore lesser but equally successful options.

However, there are unnecessary delays in the handling of subsidence claims and the progress of the claim can be speeded up.

In the past, the loss adjuster, despite having the skills to make a judgment, would invite the policyholder to appoint an engineer to report on the cause. This gave rise to delays and engineers, aware of the potential of a later professional indemnity (PI) claim, tended to recommend action beyond what was needed. Disputes with the adjuster would then arise, causing further delays.

Adjusters have now moved to total project management. Engineering practices are also offering this service direct to insurers and some have chosen to avoid adjusters completely. On paper, this should speed up the claims handling process and reduce delays.

However, monitoring periods are overly long and this often frustrates policyholders. Often it is convenient for the adjuster, given caseloads, to allow monitoring to continue, as this defers the task of producing repair specifications, obtaining tenders and administering the work.

Many cases run for years with extended monitoring periods simply, I believe, for expediency. This is not satisfactory and in such cases complaints abound, over delay, referral to the Institute of Building (IOB) and head office involvement, all of which could be avoided by a speeded up and realistic approach.

Policyholders' main complaint is that they have to live with the cracks and monitoring devices for too long.

The initial diagnosis from the visual evidence should allow a conclusion to be reached on whether a subsidence problem exists. If not, the adjuster, who should be competent to make a diagnosis, should explain what the cause is and advise on remedial measures and whether they are covered by the policy. If subsidence and site investigations are still required these should not take too long and a decision on the next stage can be made.

Unlike other claims, such as fire damage where the appropriate work can be determined at the outset, subsidence claims take longer to resolve by virtue of the unknowns. However, careful explanation of what is involved at the beginning of the claim should temper the natural concerns of most house owners and if the process is handled expeditiously thereafter, policyholders, brokers, insurers and adjusters should avoid some of the problems currently encountered.

Question 1
Site investigations are needed to:
a) Establish whether there is a foundation problem
b) Establish the cause of a pre-determined foundation problem
c) Check whether foundations comply with current standards in design and depth
d) Check the presence of a clay soil

Question 2
Monitoring is necessary:
a) To determine the cause of the subsidence
b) To decide the limit of crack repairs
c) To establish acceptable stability
d) As a pre-requisite to any repair scheme

Question 3
Underpinning is warranted:
a) Whenever subsidence affects a building
b) If there is any movement in crack widths under monitor
c) Where monitoring reveals unacceptable instability in the structure
d) To enable continuance of insurance cover

  • Chris Miller is managing director of the Society of Claims Technicians and chairman of examinations for the Chartered Institute of Loss Adjusters.

    Last week's answers:
    1 (b) | 2 (a) | 3 (c)