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May 2011 Archives

What is "Normal Settlement?" of a Home or Building

I receive a good number of calls from owners who have noticed cracking, sticking doors or windows, or other indications of soil movement, and have been told by the developer that these are "normal settlement" and that they should not be worried. So what is "normal settlement" that a building owner should simply accept? Although there is no easy answer to this question, I offer several observations:

Will Homeowner's Insurance cover a claim due to soils movement?

Many owner's faced with problems due to soils movement submit a claim to their homeowner's insurance policy. Will a typical homeowner's policy cover claims related to soils movement? The unfortunate answer is almost always no. The typical homeowners policy is known as an All risk policy. An all risk policy has been determined by the Courts in most jurisdictions to cover all risks associated with the property, except for those risks that are specifically excluded. In the 1980's, many homeowners successfully pursued claims against homeowner insurance carriers for damages related to soils movement. In response to these claims, the insurance carriers began to rewrite their policies to specifically EXCLUDE any claims related to earth movement. These policies have been written is such a manner that virtually any type of damage related to subsidence, expansive soils, or other types of earth movement will not be a covered loss under the policy. For the last 25 years, the general rule is that any claims related to earth movement are specifically excluded from the typical homeowner policy, and will not be a covered loss.


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