Basically, yes! In most other countries, they view cracking to buildings much differently, more like how we would view any other minor building defect.
The vast majority of subsidence cracks are minor and not structurally threatening and subsidence is generally not insured in most other countries. In these cases, many people live with the cracks or get their local builder to repair them. Indeed, that is how we used to view subsidence in the UK as well, before the 1970s – when everything changed in the UK and a whole new industry was born. Other counties did not follow our lead.
It was in the early 1970s when an insurer first decided to introduce additional cover for subsidence, heave and landslip as a free bit of extra cover to win some extra business. Some mortgage lenders cottoned onto that and thought it was a good idea so started requiring this cover to be in place for properties they were lending on. The ties between the lending and insurance industries in the UK are such that this soon became the norm, and the subsidence industry was unwittingly born.
Then came the hot summer of 1976, and many properties on clay of course developed minor cracks, as they always had in the past in previous hot summers. This time though, home-owners were able to claim for the cost of repairs, so they did – in droves! Not knowing how to deal with subsidence repairs, insurers appointed loss adjusters to handle these claims for them, but the adjusters didn’t really know either.
At that time, those few major subsidence cases which occasionally arose had been traditionally resolved by mass-concrete underpinning by those that could afford it, so some adjusters turned to specialist underpinning contractors for a resolution. One particular adjuster turned to a structural engineer he knew for help, who offered to deal with all of his subsidence work for him – seeing this as a golden opportunity to pave the way for structural engineers to lead the field in this new industry. After all, insurance covered “professional fees”, traditionally those of architects and surveyors (which had been a necessary part of large loss reinstatement work like big fires and the like), but insurers were happy to include structural engineers’ fees in this section for subsidence work. It was seen as a good way of dealing with these new types of problem with which the insurance industry had no experience. Structural engineers before then had rarely (if ever) dealt with subsidence or underpinning, but the insurance industry was persuaded that this was the way to go – nobody else stepped up with a sensible plan.
It soon became the norm that loss adjusters would appoint structural engineers to sort the matter out for them, and this frequently resulted in mass concrete underpinning being carried out – often unnecessarily. The cost of subsidence repairs was therefore artificially high and seen as technically complex needing the services of structural engineers and specialist repair work like underpinning. The insurance industry paid out a fortune. This in turn reinforced the notion that subsidence was a complex and expensive problem to resolve so lenders were all the more insistent that the properties they were lending against were fully covered for subsidence – to protect the value of their security.
In other countries, however, things carried on as they always had, with minor cracks being repaired by builders at the home-owner’s expense, and cracked properties changing hands quite easily without being insured against subsidence, as people didn’t view it as anything more than a minor nuisance. That is still the case today, and they maybe consider us a little strange when we panic about tiny cracks and how this will affect the value of our property.
Some other counties offer subsidence cover as an optional extra at an additional premium, but it is not generally a requirement of lenders. In France, subsidence cover is often included on policies but it only operates when a catastrophe naturelle is declared by the Department. That will only happen in a specific area if the mayor applies for it and the Department agrees. The mayor will only apply for it if enough people in his town complain about suffering it, as has happened in some areas during the intense drought in France this year (2022). Similarly in many other countries the only financial assistance that a home-owner can get for subsidence repairs is from the government in the event of some nationally recognised major disaster.
In North America and Australia, subsidence insurance is almost unheard of.
Since the late 1970s, a great deal of technical research has been carried out in the UK into the behaviour of clay, buildings and trees, and we now understand that underpinning is rarely necessary. It is now much more common for subsidence issues to be dealt with at much lesser cost, without using expensive professionals or costly stabilisation systems. However, the subsidence industry still costs people in the UK a great deal through insurance premiums. This is fuelled by the fact that subsidence insurance is essential to preserve the value of the property and enable it to be bought and sold.
If lenders were able to drop this notion and allow mortgages to be given without subsidence insurance then it is possible that subsidence insurance would become an “optional extra” as it is in many other countries. In time, perhaps we in the UK would learn to view subsidence as nothing more than a minor nuisance again, and the panic over the phenomenon would disappear. It is difficult now though to turn back the clock, as the public perception is already well ingrained that properties with cracks are worth much less, and that would be hard to change.
The fact remains though, that the vast majority of subsidence damage is minor and structurally insignificant. In some few cases damage can escalate to a level whereby structural stability is significantly threatened, but the (very low) risk of this seems to worry people in the UK far more than it does our friends overseas.
Bob Gibson, FFPWS – Subsidence Consultant (Structural Engineer, Building Surveyor)
B&SC – director