The Thoughts of Brian Harrison 4 Dec 1953 - 25 Jan 2017 - Subsidence Claims: A View from 20+ Years of Experience
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In late November 2016, Brian Harrison, a Chartered Surveyor, who I had employed on two occasions and was a valued friend, was in the final stages of his 4 year battle against acute leukaemia. He read one of my blogs and emailed me his thoughts/comments.
Brian died on 25 January 2017, aged 64, and, in his memory, I want to share Brian`s thoughts with you, in this and a subsequent blog.
When I started doing subsidence work in the early 1990`s, after 15 years in Civil Engineering as a contractor/resident engineer/designer, my qualifications and skills were appreciated, though it took a while to learn the specifics of subsidence claims and general insurance. However, a few grey hairs and plenty of letters on my business card were usually enough to put most policyholders at ease, especially if I had a chat with them about what I intended to do, before starting my survey.
Few policyholders knew what subsidence really is and this has not changed. A lot of claims are submitted that have nothing to do with foundation movement and relate to wear and tear/design/workmanship issues. Commonly this includes things such as: wall tie failure/roof spread/absence of lintels/replacement of loadbearing timber windows with uPVC/insufficient lateral restraint/sulphate attack and poor quality conservatory construction. Approximately 2/3rds of the claims fell into this category. In addition, if the pre-purchase survey could be considered in the light of the date of policy inception, a proportion of the rest could also be declined.
Generally repudiation at the time of the initial inspection , if you had delegated authority, or warning the policyholder that insurers would probably decline their claim once they had read the report, was rarely contested, provided you could use at least one of the following arguments.
1] - Properties with true foundation movement, and thus likely to have a valid subsidence claim, had a level of blight on them, even after they had been repaired. This was reflected in the future saleability, and insurability.
2] - Failure to declare subsidence movement at a future point of sale could leave the owners open to future legal action.
3] - The policy excess, normally £1,000, a considerable sum 25 years ago, would have to be imposed.
4] - The investigation and repair process was very rarely quick, typically 12 - 18 months, even longer if trees were a cause.
5] - The repair phase was usually disruptive and might require the owners to move out.
6] - The buildings insurance policy only covered certain specific items and didn`t cover issues of ageing, wear and tear, or defective workmanship.
7] - Many of the problems which fell outside policy cover could be readily addressed by reputable, specialist contractors. Such repairs did not blight the property, were not necessarily expensive or disruptive and often carried long-term guarantees.
8] - All properties need ongoing maintenance, which the owners need to fund.
Most insured`s were happy with this. However, it was always best to have the car pointing in the right direction and, on occasions conclude the visit with " I need to discuss with insurers" and leave, whether or not I had delegated authority!
In such cases, insurers would always be contacted, because that was what I had promised to do.
It was always best to issue the letter of repudiation so that it did not arrive just before the weekend, thus avoiding the possibility of the policyholder seething for two days over the weekend, before they could make contact with me on the Monday!
Over the years claim spend, which was always a key factor, became the dominant and overriding issue.
25 years ago, there were a dozen+ major insurers and, if your company lost one contract, they would often pick up another, after learning why they had lost the business.
Mergers and acquisitions massively reduced the number of major insurers and put the fewer new conglomerates in an over dominant position, where the loss of just one contract could close even a reasonably sized and well run firm of adjusters. Contracts were often agreed on the basis of turnover, rather than adjuster viability in the hope that " next year would be an event year and help to balance the books."
Major flood events such as Sheffield/Hull/Thames Valley and Carlisle [twice] helped the flow of money into adjusters, though often at low fee levels. However, as field staff had been cut to a minimum and were used to working well in excess of contracted hours, this just added to their workload, making their "work - v - life" balance more intolerable.
Unfortunately, the recession had an even greater effect on the house building/construction sector than the linked downturn in mortgage applications had on the subsidence market - pre-purchase surveys always provided a steady flow of subsidence claims.. Therefore, there was a ready supply of desperate surveyors/engineers to replace the field staff who fell by the wayside. Someone once said to me " You`re either busy or you`re sacked, and sometimes you are sacked anyway, because you are too busy and dropped the ball."
The recent legislation governing the late payment of invoices from contractors, something which has long been endemic in the industry, principally due to [poor fees/under resourcing/ the supervision, approval and administration process, may result in contractors being paid sooner, if they are brave/daft enough to "push it."
However, there is little doubt that any late payment charges will ultimately find their way back to the door of the loss adjusters, as such matters will be written into new/amended service level agreements. In all probability it could be circumvented by adjuster/contractor agreements that invoices will be submitted at 90% of work done, with the final invoice not being submitted until the completed schedule of works is approved and agreed. This keeps the contractor`s turnover healthier, it may increase the number of interim payments, but it does at least make the final works inspection and sign-off less time sensitive.
In memory of Brian Harrison, 04.12.1953 -> 25.01.2017
To be continued in my July blog.
In late November 2016, Brian Harrison, a Chartered Surveyor, who I had employed on two occasions and was a valued friend, was in the final stages of his 4 year battle against acute leukaemia. He read one of my blogs and emailed me his thoughts/comments.
Brian died on 25 January 2017, aged 64, and, in his memory, I want to share Brian`s thoughts with you, in this and a subsequent blog.
When I started doing subsidence work in the early 1990`s, after 15 years in Civil Engineering as a contractor/resident engineer/designer, my qualifications and skills were appreciated, though it took a while to learn the specifics of subsidence claims and general insurance. However, a few grey hairs and plenty of letters on my business card were usually enough to put most policyholders at ease, especially if I had a chat with them about what I intended to do, before starting my survey.
Few policyholders knew what subsidence really is and this has not changed. A lot of claims are submitted that have nothing to do with foundation movement and relate to wear and tear/design/workmanship issues. Commonly this includes things such as: wall tie failure/roof spread/absence of lintels/replacement of loadbearing timber windows with uPVC/insufficient lateral restraint/sulphate attack and poor quality conservatory construction. Approximately 2/3rds of the claims fell into this category. In addition, if the pre-purchase survey could be considered in the light of the date of policy inception, a proportion of the rest could also be declined.
Generally repudiation at the time of the initial inspection , if you had delegated authority, or warning the policyholder that insurers would probably decline their claim once they had read the report, was rarely contested, provided you could use at least one of the following arguments.
1] - Properties with true foundation movement, and thus likely to have a valid subsidence claim, had a level of blight on them, even after they had been repaired. This was reflected in the future saleability, and insurability.
2] - Failure to declare subsidence movement at a future point of sale could leave the owners open to future legal action.
3] - The policy excess, normally £1,000, a considerable sum 25 years ago, would have to be imposed.
4] - The investigation and repair process was very rarely quick, typically 12 - 18 months, even longer if trees were a cause.
5] - The repair phase was usually disruptive and might require the owners to move out.
6] - The buildings insurance policy only covered certain specific items and didn`t cover issues of ageing, wear and tear, or defective workmanship.
7] - Many of the problems which fell outside policy cover could be readily addressed by reputable, specialist contractors. Such repairs did not blight the property, were not necessarily expensive or disruptive and often carried long-term guarantees.
8] - All properties need ongoing maintenance, which the owners need to fund.
Most insured`s were happy with this. However, it was always best to have the car pointing in the right direction and, on occasions conclude the visit with " I need to discuss with insurers" and leave, whether or not I had delegated authority!
In such cases, insurers would always be contacted, because that was what I had promised to do.
It was always best to issue the letter of repudiation so that it did not arrive just before the weekend, thus avoiding the possibility of the policyholder seething for two days over the weekend, before they could make contact with me on the Monday!
Over the years claim spend, which was always a key factor, became the dominant and overriding issue.
25 years ago, there were a dozen+ major insurers and, if your company lost one contract, they would often pick up another, after learning why they had lost the business.
Mergers and acquisitions massively reduced the number of major insurers and put the fewer new conglomerates in an over dominant position, where the loss of just one contract could close even a reasonably sized and well run firm of adjusters. Contracts were often agreed on the basis of turnover, rather than adjuster viability in the hope that " next year would be an event year and help to balance the books."
Major flood events such as Sheffield/Hull/Thames Valley and Carlisle [twice] helped the flow of money into adjusters, though often at low fee levels. However, as field staff had been cut to a minimum and were used to working well in excess of contracted hours, this just added to their workload, making their "work - v - life" balance more intolerable.
Unfortunately, the recession had an even greater effect on the house building/construction sector than the linked downturn in mortgage applications had on the subsidence market - pre-purchase surveys always provided a steady flow of subsidence claims.. Therefore, there was a ready supply of desperate surveyors/engineers to replace the field staff who fell by the wayside. Someone once said to me " You`re either busy or you`re sacked, and sometimes you are sacked anyway, because you are too busy and dropped the ball."
The recent legislation governing the late payment of invoices from contractors, something which has long been endemic in the industry, principally due to [poor fees/under resourcing/ the supervision, approval and administration process, may result in contractors being paid sooner, if they are brave/daft enough to "push it."
However, there is little doubt that any late payment charges will ultimately find their way back to the door of the loss adjusters, as such matters will be written into new/amended service level agreements. In all probability it could be circumvented by adjuster/contractor agreements that invoices will be submitted at 90% of work done, with the final invoice not being submitted until the completed schedule of works is approved and agreed. This keeps the contractor`s turnover healthier, it may increase the number of interim payments, but it does at least make the final works inspection and sign-off less time sensitive.
In memory of Brian Harrison, 04.12.1953 -> 25.01.2017
To be continued in my July blog.
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