With many parts of the UK now officially in drought, worried homeowners may be looking out for tell-tale cracks that could be the first signs of subsidence. The recent press release by the Association of British Insurers (ABI) urged homeowners not to worry unnecessarily.  Knowing what steps can be taken to reduce the risk of subsidence and what to do if you suspect it is happening can ensure that you do not end up with a problem.  

 What is subsidence? 
Subsidence is the downward movement of the ground supporting a building caused by changing moisture levels, usually when the soil dries out or ground water levels drop. The movement is uneven, causing damage, such as cracks in walls, floors and ceilings. Heave, the upwards movement of the ground which can occur when dried-out soil becomes saturated, can also cause damage, as well as landslip, the sideways movement of foundations.    

Causes of subsidence… 

·         Trees – are a major cause as they remove moisture from the ground, sometimes sucking it from under foundations. A large deciduous tree can require more than of 50,000 litres a year. Problems tend to arise if trees are too close to buildings, or grow too big.  Before planting trees or large shrubs in the garden, homeowners can get advice on recommended distances from the ABI website. A tree surgeon can advise on what to do with existing trees near the home and homeowners can begin a programme of pruning to control the amount of foliage produced to reduce the tree’s water intake.    

·         Escape of water – for example from damaged drains, can also cause foundations to weaken. Regular maintenance of your home and outbuildings is key to detecting such damage early on.   

·         Clay soils – contract and expand with changing moisture levels. Most shrinkable clay in the UK is located in the South East, the area most affected by lack of rainfall and most prone to subsidence.   

If you suspect subsidence… 

·         Don’t panic – minor cracking, usually below 5mm wide, can be due to other causes, such as settlement of soil in new build homes, and the drying and shrinking of building materials. These cracks can usually be dealt with by routine maintenance and decoration. 

·         Cracks – wider than 5mm which a 10p can be slotted into are usually the first sign of subsidence. They tend to be visible from both inside and outside the building, tapered and extend below the damp proof. 

·         Distortions – such as doors that may no longer shut evenly and windows slanted in appearance are also signs of subsidence   

Insurance… 

·         Contact your insurer as soon as possible if you notice larger cracks or distortions. Subsidence damage is covered as standard under home building insurance policies. 

·         Your insurer will send out a specialist to investigate the cause of damage and arrange for repair work. Some investigations can take some time to ensure proper and lasting repair work is carried out. 

·         Seeking specialist advice on removing trees near to the home can be useful, however it is not a requirement from most insurers 

·         Standard subsidence excesses (the first part of the claim that you pay yourself) tend to be £1,000 under most buildings insurance policies. 

·         Most leading insurers sign up to an ABI agreement so that your subsidence claim can be handled by the most appropriate insurer with minimum fuss if you have recently changed your insurer or moved home 

·         Your insurer should also continue to offer you cover once you have made a subsidence claim and it is good practice to offer to insure new owners when you sell your house.       

Nick Starling, Director of General Insurance at the ABI comments:   

“There are steps homeowners can take during drought conditions to avoid potential subsidence damage. Regular maintenance of the home and outbuildings is key to preventing any damage and detecting signs, such as cracks, early on.   

“Many minor wall cracks may not be caused by subsidence and can be dealt with by routine decoration. Insurers will be able to make a correct assessment of suspected subsidence and homeowners can also seek specialist advice on trees near to the home.”

The above information was provided by the ABI and can be found here www.abi.org.uk

People claiming whiplash injuries should not be entitled to compensation unless there is objective evidence that they have suffered injury. This is one of several radical reforms which the ABI today said needs to be considered to reduce the UK’s whiplash epidemic and bring down the costs of motor insurance. Britain’s thriving whiplash industry is now pushing up the cost of the average motor insurance policy by a staggering 20%. 

Despite a fall in the number of car crashes, whiplash claims have risen by a third in the last three years. Every year 570,000 people claim for whiplash injuries – enough to fill the London Olympic Stadium seven times over. Last year these claims cost insurers over £2 billion, adding an extra £90 a year to the average annual motor premium of £440. 

Speaking at an international whiplash conference in Bristol today, James Dalton, ABI’s Head of Motor and Liability said: 

“If whiplash was an Olympic sport, the UK would be gold medallists. The fact that whiplash is virtually impossible to disprove means that for too many it has become the fraud of choice, often aided and abetted by ambulance-chasing lawyers and claims management firms”. 

Outlining ideas for radical reform, James Dalton added: 
“The crackdown on our whiplash epidemic has started with the Government’s reform of civil litigation which will reduce the scope for ‘have a go’ claims. But we also need to consider radical action if we are to get a grip on whiplash, such as: 

• A system where whiplash claimants receive no compensation for alleged pain and suffering (general damages) unless there is objective medical evidence of injury. 
• Capping or reducing the level of damages for whiplash claims. 
• Having a panel of independent doctors to assess whiplash claims, rather than the claimants GP. 
• Greater use of bio-mechanical evidence that might enable the introduction of a speed threshold under which there would be a presumption that whiplash has not occurred. 
“Only by thinking big and bold can we reduce the whiplash problem and the costs of motor insurance.” 

The above information was provided by the ABI and is available here www.abi.org.uk/Media

According to the latest Association of British Insurers (ABI) consumer survey, one in four people believe that having trustworthy neighbours is the key to feeling most secure at home, *. But the findings highlight that many homeowners are needlessly putting themselves at risk of financial disaster by overlooking basic security precautions. To help homeowners protect themselves, the ABI has produced a guide on home insurance and some answers to common home insurance questions.   

Nearly three in ten people admit to leaving doors unlocked and windows open when going out briefly, despite the fact that the survey showed 42% of people recognise the importance of good locks. With 36%** of all burglaries being opportunistic, failing to secure doors and windows is an open invitation to thieves, particularly as we approach summer. And with an estimated quarter*** of households admitting to having no contents insurance at all, mistakes like these could leave people footing a hefty bill.  

The two new ABI guides offer advice on how to ensure you buy the right amount of cover and clearly set out what is covered by standard buildings and contents insurance and options people can pay extra for, such as accidental damage cover. The ABI has also produced a home security guide providing advice such as what to do if you are leaving your home unoccupied for a long period and how this might affect your insurance.           

Nick Starling, Director of General Insurance at the ABI said:  

“While it can be reassuring for householders to have neighbours they can trust, this alone cannot substitute the value of sensible home security measures. Common mistakes, such as leaving doors unlocked and windows open, could invite thieves, putting your possessions at risk. And with one in four households without contents insurance, homeowners could be left footing a big bill to replace valuables.  

“Following sensible security measures and ensuring your property and its contents are adequately covered are the wise steps people should follow to protect their homes.”  

Information provided by the ABI and is available at www.abi.org.uk

We recently had a client report the theft of his exhaust system by breaking a window lifting the bonnet and unbolting the system.  This follows on from another client who has had the same thing happen to three of their vehicles. These systems including the catalytic converter cost £3000 to £3500 to replace.

A quick search on Google reveals lots of similar incidents like this on Mercedes Sprinter vans due to the high content of platinum in the catalytic converter and also that the system can be removed in less than a minute by undoing a couple of bolts.

If you have one of these vehicles, please note this warning.

Mercedes have a special mechanism called “catlok” available which costs £125.  It may be worth investing in this for your vehicle.

British insurance law developed during the 18th and 19th centuries, and was partly codified by the Marine Insurance Act 1906 (―the 1906 Act).

Although strictly the 1906 Act only applies to marine insurance, the courts have consistently held that it applies to all forms of insurance, including consumer insurance, on the grounds that it codifies the common law.

The 1906 Act requires that the insured person must disclose every matter that would be material to the insurer’s decision to insure.  Failure to do this permits the insurer to avoid the contract and refuse all claims under it, even where the insured person is not aware of what the insurer would consider material.

The purpose of the Consumer Insurance (Disclosure and Representations) Bill is to update the law relating to pre-contractual disclosure and misrepresentations and simplify the existing legal framework by removing layers of case law, guidance and voluntary codes which currently set the standards expected in this area.

Firstly, what is a Consumer?

A consumer is defined as a ―individual who is acting wholly or mainly for non-business purposes.

Thus the consumer must be a natural person, rather than a legal person (such as a company or corporation). The definition expressly provides for mixed use contracts. Where a policy covers some non-business and some business use, the main purpose of the insurance needs to be considered.

For example, insurance would be considered to be ―consumer insurance if private vehicle insurance covers a limited amount of business use, or if home contents insurance covers some business equipment. 

What is the effect of the Bill?

Abolishing the consumer’s duty to volunteer information

The Bill replaces the duty to volunteer material information with a duty on consumers to take reasonable care not to make a misrepresentation during precontractual negotiations. If a consumer breaches this duty and this misrepresentation induces the insurer to enter the contract, the insurer will have a remedy.

The nature of the insurer’s remedy depends on the nature of the consumer’s misrepresentation.  

If a consumer makes a deliberate or reckless misrepresentation, the Bill permits the insurer to treat the contract as if it never existed and refuse all claims.

If, when answering questions posed by an insurer, a consumer answers carelessly, the Bill provides that the insurer may have a remedy according to whether it would have entered into the contract on different terms.

If it would not have entered into the contract at all it may refuse all claims but it must return the premiums paid.

If it would have entered into the contract on different terms, the contract may be taken to include those different terms.

If the premium would have been higher this may have consequences for the amount of any claim. If the consumer acts with reasonable care, the insurer must pay the claim in full.

Group insurance

The Bill makes provision for a situation where a member of a group insurance policy makes a misrepresentation. Where this happens the misrepresentation will only have consequences for the cover of that member and not for the policy as a whole.

This is a very simplified summary and nearer the time that the Bill becomes an Act I will break down the effects of Act and how it impacts on our own product.

There are 4 questions. Don’t miss one.
 

1.  How do you put a giraffe into a  refrigerator?

Stop and think about it and decide on your answer  before you scroll  down.

The  correct answer is: Open the refrigerator, put in the giraffe and close the door.

This question  tests whether you tend to do simple things in an overly complicated  way.

2  How do you put an elephant into a refrigerator?

Did  you say, Open the refrigerator, put in the elephant, and close the  refrigerator?

Wrong  Answer.

Correct Answer: Open  the refrigerator, take out the giraffe, put in the elephant and close the door.

This tests your  ability to think through the repercussions of  your previous actions..

3.  The Lion King is hosting an animal conference.

All the animals attend.... Except one.

Which animal does not attend?

Correct  Answer : The Elephant.

The elephant is in the refrigerator. You just put him in there.

This tests your memory...

Okay, even if you  did not answer the first three questions correctly, you still have one more chance to  show your true abilities.

4.  There is a river you must cross but it is used by crocodiles, and you do not have a boat.

How do you manage it?

Correct  Answer:? You jump into the river and swim across.

Have you not been listening?

All the  crocodiles are attending the Animal Meeting.

This tests whether you learn quickly from your  mistakes.

According to Anderson Consulting Worldwide, around 90% of the Professionals they tested got all questions wrong, but many  preschoolers got several correct answers.

Thank you for trying the test and please feel free to post your results in the comment section below

I am very pleased to announce that we have been given kind permission to reproduce the Financial Ombudsman News on a bi-monthly basis.

The Financial Ombudsman News provides an insight into the work of the Financial Ombudsman and also details recent cases and the reasoning behind their decisions.  Some of the cases make for very interesting reading.

If you didn’t already know of the Financial Ombudsman, here is a little information about their service:

•  Set up by law, they have official powers to settle financial complaints. The service is for everyone. 
• They aim to be accessible – and meet any particular needs customers may have.
• They are completely independent.
• They look at the facts, ask questions and decide what’s fair in each individual case.

 Happy reading.

 For more information, please click here to access the official website

Click here to download:

Financial Ombudsman News - Issue 97.pdf (2.48 MB)

(download)

Click here to download:

Financial Ombudsman News - Issue 97.pdf (2.48 MB)

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