Home insurance may cover some foundation repairs, but whether there’s coverage depends on what causes the damage. Sometimes the event that damages your foundation isn’t covered by your home insurance. When that happens, you’re most likely going to have to pay for repairs out of your own pocket.
What foundation issues are typically covered by insurance?
As with most types of property damage, home insurance covers damage to your foundation when it’s caused by a covered peril (i.e., a covered cause of loss) as outlined in your policy.
So what’s a covered peril? Again - it depends on your policy. However, most homeowners insurance covers damage caused by:
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Lightning or fire.
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Windstorm.
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Aircraft.
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Explosion.
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Riot or civil disturbance.
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Vehicle.
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Falling object.
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Volcanic eruption.
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Collapse from the weight of snow, sleet, or ice.
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Water damage from plumbing, heating, or air conditioning overflow.
Even when foundation damage is the result of a covered peril, the event has to be sudden and accidental – not gradual. If your foundation suddenly collapsed, your insurance company would still need to investigate because it would want to figure out if a covered peril was the cause.
In some cases, what caused your foundation damage is obvious. A car crashing into your home or a tornado blowing debris that cracks your foundation are some examples of claims that could likely be covered.
Other situations might be less obvious. A crack that appears out of nowhere may be the result of normal soil or temperature fluctuations. Chances are your insurer won’t cover those repairs.
What foundation issues are not covered by insurance?
Home insurance usually doesn’t help with foundation damage caused by:
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Normal wear and tear.
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Neglect.
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Damage due to soil movement not caused by a cover peril.
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Typical settlement or land movement.
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Ground water intrusion through the foundation.
Your policy might also have specific exclusions and limitations in it, so you may want to check with your insurer if foundation issues are a big concern.
Types of insurance that may cover foundation issues
When homeowners encounter a foundation issue, they typically turn to homeowners insurance to fix it. And, in many cases, homeowners insurance is the primary type of insurance used to protect against these types of issues.
But homeowners insurance doesn’t cover every possible peril that might damage your foundation. If you have an HO1 or an HO2, you’ll need to check the list of perils the policy covers. All other perils are excluded.
Other home insurance forms, like the special form (HO3) and the comprehensive form (HO5) provide open peril coverage. That means these policies cover all risks except those expressly excluded from coverage by the policy language.
But even if you have an open perils policy, your foundation damage may be excluded if it’s caused by flood or earthquake. Luckily, there are policies for those perils.
Flood insurance
Whatever form your home insurance is written on, it most likely excludes damage from flood. The way to protect yourself from a loss caused by flood damage is with flood insurance.
You can get flood coverage either as a standalone policy or as an endorsement to your current home insurance. Most people get standalone flood policies from the National Flood Insurance Program, which is run by the federal government. However, coverage is also available from private insurance companies.
Earthquake insurance
Homeowners insurance also usually excludes damage caused by earth movement, mudslides, and earthquakes. For that type of damage, you may need earthquake insurance. This is another coverage you can find as a standalone policy or as an endorsement to your home insurance.
Even with earthquake insurance, you may not have coverage for any changes to the land your house sits on or any efforts to stabilize your home. That means that your insurer may pay to fix a crack in your foundation after an earthquake, but it probably won’t pay to regrade your property if your house is partially collapsed because the ground it sits on is now lopsided.
Additional riders or endorsements for foundation protection
In addition to flood insurance and earthquake coverage, some insurers offer separate riders or endorsements specifically designed to protect homeowners against foundation issues.
How to file an insurance claim for foundation issues
If you think your foundation damage is covered by insurance, then you’ll need to file a claim. Your insurance company will then assess the damage, often by sending an adjuster to investigate the cause and determine whether the damage is covered.
Steps to take when you notice foundation damage
The first step to take when you notice damage to your foundation is to try and mitigate your damages. You want to minimize the chance of the problem getting worse. This may mean:
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Calling a contractor to evaluate cracks in your foundation.
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Taking steps to divert water away from your foundation.
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Putting out a fire.
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Stop anything else that’s actively causing damage to your home.
Please only do these things if you can do them safely.
The importance of documentation and evidence
Once you’ve addressed the cause of the damage, then you need to document everything. Take pictures of cracks and other damage, plus any other systems or personal property that have been impacted. For example, if one of your foundation walls has fallen into your water heater, take pictures of the wall, the water heater, and any other associated damage.
Tips for working with insurance company adjusters and contractors
When you’ve documented damage that has occurred, it’s time to start the claims process with your insurer. This typically means first filing a first notice of loss (FNOL), where you notify your insurance company that you’ve suffered a loss.
The insurance company will then have your claim reviewed by an adjuster and may have a contractor assess the damage and costs of covered repairs.
What are common foundation issues?
The most common foundation problems that homeowners encounter include cracks, settling, and water damage. These issues are typically the result of:
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Improper drainage of surface water and roof runoff around your foundation.
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Soil movement.
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Poor construction of your foundation, such as poor quality mortar.
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Severe weather conditions.
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Poor workmanship.
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Material deficiencies.
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Design errors.
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Poor installation of drainage and other systems.
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Improper compaction of soil.
Tips for preventing foundation issues
While many foundation issues are caused by things that homeowners can’t control, the likelihood of having problems can be reduced with a few simple steps. For example, you might want to:
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Conduct regular maintenance of drainage systems, including your sump pump and other systems.
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Construct landscaping and drainage to divert water away from your foundation.
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Invest in preventive measures like a sump pump and sump pump alarm in case your pump stops working.
Interested in other ways regular maintenance can keep your home safe? Check out our home maintenance guide for more tips.
