If the summer threatens subsidence, now is the time to repair your insurance

Sam Dunn shows how to stay on solid ground as claims and temperatures rise
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The Independent Online

A spat between rival forecasters over the chances of a glorious British summer this year has put personal finance on the weather map.

A spat between rival forecasters over the chances of a glorious British summer this year has put personal finance on the weather map.

The dispute last week turned on a predicted washout by Metwatch and a rebuff from the Meteorological Office that our tourist industry will be needlessly hit by such an early forecast. But concerns about sun and rain aren't confined to tourists; homeowners are likely to be a little relieved at the prospect of rain instead of record-breaking temperatures. The hotter the summer, the greater the potential impact of subsidence on our homes, as soil crumbles and weakens foundations.

The sweltering summer last year led to soaring numbers of claims on buildings cover, but research from Halifax Insurance reveals that the wet December and January helped slow down cases of subsidence. Even so, claim levels remain well above those of 12 months ago.

Halifax says that in the first two months of this year, claims touched 100 a week - half as high again as last year's average. It estimates that £34m worth of subsidence damage was done to the homes it insures in 2003 - more than double the long-term average and an increase of nearly 70 per cent on 2002.

Figures from the Association of British Insurers (ABI) reveal some 54,100 claims for subsidence in 2003, worth £390m. And further bad news for policyholders is that a rise in claims usually leads to a hike in insurance premiums.

But Liz Kennett, a spokeswoman for Norwich Union, says customers should not expect to see higher premiums as a result of 2003's subsidence, though this may be because the drawn-out nature of the incidents and the claims means it can take time for higher costs to feed through into premiums.

Yet homeowners should rest assured that most buildings insurance policies carry standard subsidence cover.

Insurers calculate your premiums according to the rebuild value of the property - the cost of putting your house back together brick by brick. Terraced homes tend to be more expensive to rebuild because, in the extreme event of collapse, remedial action is also likely to be needed on neighbouring houses.

Since the expense of this work won't move by much more than the rate of inflation in the construction industry - the cost of bricks, labour and materials to build your house again - most policies adjust to changes in your home's rebuild value over the years.

It's worth checking the details, though, just to make sure you are covered. Norwich Union, for example, automatically index-links the "rebuild" value for policyholders. But while Halifax customers are covered for an unlimited sum for the full replacement cost of their home, policyholders must notify the insurer if new bedrooms or gar- ages are added to the property.

Like crime, however, subsidence is best tackled by planning and vigilance. It usually strikes after a prolonged spell of dry weather sucks the moisture out of earth, particularly clay, beneath house foundations. Trees and shrubs starved of water extend their roots to find moisture and loosen the surrounding soil.

Although many homes suffer small, superficial cracks from time to time, caused by temperature and humidity changes, these can be repaired with a product such as Polyfilla.

But when the cracks are wider than the thickness of a 10p piece and more pronounced at the top than the bottom, they could be caused by subsidence, warns Ms Kennett at Norwich Union.

To protect your home, keep trees and shrubs pruned and be doubly careful about planting any new trees. Norwich Union says you should plant trees at least eight metres from your property. And keep drains free of leaves and rubbish and check pipes for splits; these can lead to flooding and wash away soil.

It's also worth reviewing your buildings policy to check for exclusions. Norwich Union says external walls, gardens, patios and drives hit by subsidence won't be covered unless the damage extends to the house itself. But Direct Line says it will cover claims for subsidence elsewhere on your property.

Alarmingly, on the average £7,000 to £8,000 subsidence claim, Halifax research reveals that half of all households have no idea that they will have to pay a £1,000 excess. Since the heartache of seeing your house ripped apart by subsidence will be compounded if you aren't able to sort the problem out straight away, make sure you have the funds available to cover this excess.

According to Halifax, a simple way to do this is to add £1,000 to your mortgage and release the money to fix the problem as soon as possible. But this should be a last resort as you will pay interest over the term of the mortgage. You would be better off setting aside this amount in a savings account just in case you have to make a claim.

TREE WAS FELLED BEFORE THE WALLS CAME TUMBLING DOWN

Peter Sterling returned home from holiday last August to find an agitated neighbour on his doorstep in Barnsley.

A crack had appeared in next door's property on the wall shared with Mr Sterling's terraced home. Fearing the worst, inspection of his own property led to the discovery of cracks 150cm long - one on the parting wall and another in an upstairs bedroom. Worse, the subsidence had made it difficult to open his front door.

"I called my insurer, Halifax, and a couple of engineers came round," he says. It turned out that baking heat had forced a tree standing some eight feet in front of his house to spread its roots in a bid to find moisture. Thanks to the high temperatures, the clay soil under the house had dried out, making the ground unstable.

The tree's position on the pavement and road outside Mr Sterling's property meant responsibility lay with the local authority. "It was amazing - it was gone in 48 hours," he says. "The council was contacted and it took 10 minutes for an official to arrive and say immediately that the tree should be removed. And it was - before my neighbour's insurance company arrived."

Despite the cracks, it cost Mr Sterling only £150 to repair the damage. As the excess on standard buildings insurance is usually around £1,000, he paid for this work himself.

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