By: MARIKE VAN NIEKERK, Manager: Legal and Compliance at MUA Insurance Acceptances
A recent incident where almost 30 families in Mosselbay had to evacuate their houses after land foundations shifted, has raised awareness about whether this type of damage is typically covered by insurance policies.
Most insurance policies provide limited or no cover for subsidence, landslip or ground heave unless it is specifically requested beforehand and the homeowner pays an additional premium for that cover. Homeowners might not have this cover in place as part of their policy and it is therefore vital that they check with their insurance broker what their policy states.
When buying a house, it is vital that the new homeowner ascertain whether the area is prone to landslips, subsidence or ground heave. If an area is prone to these elements the property should generally have reinforced structures and additional measures implemented based on a geotechnical report.
The cover for subsidence, landslip and ground heave need to be bought prior to the loss. This will normally be at an additional cost and after the insurer had the opportunity to assess the risk prior to providing the cover.
It is standard procedure when an insured wants cover for subsidence, landslip or ground heave, that the insurer would assess the risk based on any signs of building damage like, whether neighbouring properties have a history of similar damages, if property is built on ground level or if foundations have been reinforced. A geotechnical engineer will be able to provide reassurance of the information should these type of damage signs be present.
There are instances where the claim might be rejected due to the damage not being determined as sudden or unforeseen, but might have been caused over a period. Settlement, the movement of a site as a result of loading placed on it by a building, is excluded from subsidence cover in general and the insured will not enjoy cover if it is found that the cause of the damage is due to settlement.
There are always certain exclusions connected to such cover and this must be kept in mind as this cover is not all incumbent for any such event, for example, any damage in existence prior to the insurance cover, faulty materials being used or poor workmanship. The proximate cause of the damage will always be established by engineers before the insurer will accept or reject liability of such a claim.