Will Subsidence Cause Home Insurance Increase?
Well, you’re sort of in a double-bind situation if the house of your dreams that you want to buy has been previously damaged by subsidence. Even if the situation has been taken care of, if you live in a high-risk area or wish to, the chances of a foundational problem in the future due to the sinking nature of the ground on which the house was built make it likely enough that subsidence will occur again. Whenever there’s a greater probability that something will happen causing claims for damages, the insurance rates are naturally higher. Because subsidence damage can be so expensive, not only does this mean you are up against the usual price increases, but you may also find that no other insurance company but the one under which the current owner is insured will even offer to insure against subsidence. Often, the current insurer is only insuring the property because of regulations requiring the insurer to provide coverage after initial damages. These regulations, however, may not apply once the house is sold to a new party, and rates can become exceedingly high. When you are being evaluated by a mortgage company to see whether or not your income and assets are enough to afford the property you are considering, the high cost of subsidence insurance can put you out of the range of the price that the lender will be willing to front you. If you find your house has subsidence your contents insurance cover will end up costing you a lot more money
