Can insurance refuse a subsidence claim? (UK guide)

The short answer

Yes, an insurer can refuse a subsidence claim, but only for a valid reason set out in the policy or in law. Common grounds are that the damage is not subsidence but excluded settlement or thermal cracking, that it is pre-existing or was undisclosed when the policy started, that the property was poorly maintained, or that an exclusion applies (such as a new build still bedding in). An insurer can also reduce or refuse a claim for non-disclosure under the Consumer Insurance (Disclosure and Representations) Act 2012 if you failed to answer questions about previous movement honestly. A refusal is not the end of the road: you can ask for the decision and engineer's report in writing, make a formal complaint, and if unresolved within eight weeks take it free of charge to the Financial Ombudsman Service, which can overturn an unfair decision. Many disputes turn on the cause of cracking, where a second engineer's opinion can be decisive.

A declined subsidence claim is one of the most common reasons people contact the Financial Ombudsman about home insurance. The sections below explain the legitimate grounds for refusal and the steps to challenge one you think is wrong.

Refusals at a glance

Can insurers refuse?Yes, on valid grounds
Common reasonSettlement, not subsidence
Other groundsNon-disclosure, exclusions
First challenge stepFormal complaint
Final routeFinancial Ombudsman Service

Legitimate grounds for refusal

Insurers cannot decline a valid claim arbitrarily, but several genuine grounds allow a refusal or reduction:

It is not subsidence. Many cracks come from initial settlement, thermal movement, or shrinkage of plaster — none of which is the insured peril of subsidence.
Pre-existing damage. If the cracking existed before the policy started, or was present and undisclosed when you bought the property, it falls outside cover.
Exclusions. Policies commonly exclude settlement of new builds, damage from poor maintenance, or movement to paths, drives and boundary walls (often only covered if the house is damaged too).
Non-disclosure. Failing to declare a known history of subsidence or underpinning can reduce or void the claim under the 2012 Act.

What an insurer cannot do is refuse a genuine, covered claim simply because subsidence repairs are expensive, or decline without giving a clear reason grounded in the policy or the evidence. If the engineer's investigation points to an insured cause and the claim was properly disclosed, the insurer is expected to deal with it. The line between a fair refusal and an unfair one is whether the insurer can point to a specific, evidenced ground — and that is precisely the question the complaints process and the Financial Ombudsman exist to test.

Subsidence versus excluded settlement

The single most common dispute is whether cracking is insured subsidence or excluded settlement. Subsidence is the downward movement of the ground beneath the foundations, usually from clay shrinkage, leaking drains or tree roots, and it is covered. Settlement is the natural bedding-in of a building's own weight, particularly in the first years after construction, and it is generally not. The two can look similar, which is why insurers investigate the cause so carefully before deciding. If you disagree with the insurer's engineer, you are entitled to commission your own structural engineer for a second opinion to support a challenge.

Get the decision in writing: ask the insurer for its refusal in writing, together with the engineer's report it relied on. You cannot effectively challenge a decision you have not seen the reasoning for, and the written report is the document the Financial Ombudsman will examine if the dispute goes that far.

Reductions short of a full refusal

A claim is not always simply accepted or refused; insurers can also partially settle. The most common situation is where part of the damage is covered and part is not — for example, the insurer agrees to repair cracking caused by a leaking drain but declines decoration it considers pre-existing wear. Another is where a degree of non-disclosure is found: under the 2012 Act, if the insurer would still have offered cover but on different terms, it may reduce the settlement proportionately rather than refusing outright. And where a higher subsidence excess applies, the contribution you make can feel like a partial refusal even though the claim is accepted.

Because of this, read any decision letter carefully to see exactly what has been accepted, reduced or declined, and on what grounds. A reduction can be challenged through the same complaints route as a full refusal, and the Financial Ombudsman regularly considers whether a partial settlement was fair as well as whether an outright decline was justified.

How to challenge a refusal

The FCA sets out a clear complaints route. First, make a formal complaint to the insurer, explaining why you believe the decision is wrong and enclosing any supporting evidence — a second engineer's report, dated photographs and your records. The insurer has up to eight weeks to issue a final response. If it upholds the refusal, or the eight weeks pass without resolution, you can refer the complaint free of charge to the Financial Ombudsman Service, generally within six months of the final response. The Ombudsman reviews the evidence independently and can direct the insurer to accept the claim, carry out works or pay compensation where the refusal was unfair.

To give a challenge the best chance, focus on the specific reason the insurer gave and address it directly with evidence. If the refusal rests on the cracking being settlement rather than subsidence, an independent structural engineer's report contradicting that finding is the strongest response. If it rests on an alleged non-disclosure, evidence of what you actually told the insurer, or that the information was not material, is what matters. Vague dissatisfaction rarely shifts a decision; a focused, evidenced rebuttal of the stated ground is what the Ombudsman weighs.

Keep the process orderly and in writing. Note the date of the insurer's final response, because the six-month window to take the matter to the Financial Ombudsman runs from it. Gather your evidence into a single clear bundle — the decision letter, the engineer's reports from both sides, dated photographs and your correspondence log — so the Ombudsman can see the dispute at a glance. A well-organised, specific complaint is taken more seriously and decided more quickly than a scattered one, and it costs you nothing to pursue.

It is also worth being realistic about which refusals are likely to be overturned and which are not. Where the dispute genuinely turns on the cause of cracking — subsidence versus settlement — a credible second engineer's report can shift the outcome, because the question is technical and a fresh expert opinion carries real weight. Where the refusal rests on a clear, evidenced exclusion or a genuine non-disclosure that the insurer can point to, the challenge is harder, and the honest position is that the Ombudsman may well uphold the decision. Knowing which kind of refusal you are facing helps you decide how much effort and expense to put into the challenge, and whether a second engineer's report is the right investment or whether the policy wording simply does not cover the damage.

Frequently asked questions

What is the most common reason a subsidence claim is refused?

Most refusals turn on cause: the insurer's engineer concludes the cracking is excluded settlement, thermal movement or shrinkage rather than insured subsidence. A second independent engineer's opinion can support a challenge if you disagree.

Can a claim be refused because I didn't mention past subsidence?

Yes. Failing to disclose a known history of subsidence or underpinning can let the insurer reduce or void the claim under the Consumer Insurance (Disclosure and Representations) Act 2012, so always answer such questions honestly.

Is taking a refusal to the Ombudsman free?

Yes. The Financial Ombudsman Service is free to consumers. You must first complain to the insurer and allow up to eight weeks for a final response, then refer it to the Ombudsman, generally within six months.

Sources & further reading

Figures on this page are typical UK ranges drawn from published sources and depend on your specific property. They are guidance, not a quotation.