I read with dismay the opinion written by Christine Seib (Opinion, 20 July) not because she says that she was unable to get any cover because of subsidence, but that she was able to get anyone to insure half a building at all.
Please explain how any insurer can insure a part of a building. Who is responsible for insuring the foundations and roof? In the event of a total loss, what would happen if one of the parties insuring their 'part' of the building had let that policy lapse? How is the rebuilding cost calculated for each part?
I query the validity of either policy in force and would hate to have the job of sorting out the insurance claim if the whole property were totally destoyed.
This seems to be endemic of bad advice/misunderstanding across the board from all parties involved including the solicitor who dealt with the purchase of the property and the mortgage lenders.
While the Commonhold and Leashold Reform Bill is designed to give people the opportunity to own their own freehold this has to be dealt with sensibly. What usually happens is that once the freehold of a block of flats has been transferred to the individual flat owners a management company is set up and this insures the whole building on behalf of everyone and apportions the premium accordingly.
If there are only two flats involved and the freehold is divided or jointly owned then the owners of both flats should insure the property as a whole in joint names.
I would be very interested to hear the comments of HSBC and Norwich Union re the above. If ChristIne Seib had come to me, I would have insisted that someone in authority at HSBC, who knew and understood the situation, dealt with the matter correctly.
Obviously none of them read your CPD page dated 6 February 2003 entitled "Recruitment check" where staff at one company had been arranging household contents insurance and had for a number of years been adding buildings to this policy. It was spotted when a compliance auditor noticed that there was a building item in the 12-storey flat in a London high rise.
Finally, there are a number of schemes where insurers do cover properties that have had subsidence and these can be found easily just by going on the web or by looking in any buyers guide.
I appreciate that subsidence had not been definitely ascertained at this stage and this can cause a problem, and is why existing insurers should be asked to continue the cover for the property - preferably before exchange of contracts.
I am suprised that the mortgage lender in this case did not insist on seeing the insurance before exchange, as usually happens now.
Sandra Salter
Manager, commercial department
Lawrence Insurance Group
