Does Home Insurance Cover Foundation Repair?

Lindsay Frankel
Written byLindsay Frankel
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Lindsay FrankelInsurance Writer
  • 5+ years in auto insurance and personal finance writing

  • Featured in top personal finance publications

Lindsay is a widely published creator of auto insurance content. She also specializes in real estate, banking, credit cards, and other personal finance topics.

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Danny Smith
Edited byDanny Smith
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Danny Smith
  • Licensed auto and home insurance agent

  • 4+ years in content creation and marketing

As Insurify’s home and pet insurance editor, Danny also specializes in auto insurance. His goal is to help consumers navigate the complex world of insurance buying.

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Updated January 27, 2023

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Homeowners insurance will cover some foundation repair, depending on the cause of the damage and the policy that you have. It won’t cover foundation damage due to things like burrowing creatures, expanding tree roots, and poor drainage, because it’s your responsibility as a homeowner to take steps to prevent these things.

However, if you require foundation repair after a covered peril, such as a sudden burst pipe that causes water damage, your home insurance policy will pay for it. It’s important to address foundation problems before they become safety issues, whether or not your home insurance would pay for repairs.

Will your home insurance cover foundation repair?

Whether your home insurance will cover foundation repair depends on the type of homeowners policy you have and the cause of the damage to your foundation. Some policies only cover named perils, while others cover anything that isn’t excluded from the policy. Here’s what you can expect from the dwelling coverage for each type of home insurance:

Policy TypeNamed or Open Peril Dwelling Coverage?What’s Covered?
Basic Form (HO-1)Named perilDamage from fire, smoke, explosion, lightning, volcanic eruption, hail, wind, vandalism, theft, aircraft, vehicles, riots
Broad Form (HO-2)Named perilAll HO-1 perils, plus damage from falling objects, sudden water and steam discharge, freezing and accidental damage to household systems, electrical current damage, and the weight of snow, sleet, or ice
Special Form (HO-3)Open perilAny damage to the home’s structure that isn’t from an excluded peril
Tenant’s Form (HO-4)No coverage for the structure of the homeItems in the dwelling, including those installed by the tenant
Comprehensive Form (HO-5)Open perilAny damage to the structure of the home that isn’t a result of an excluded peril
Unit-Owners/Condo Form (HO-6)Named perilThis coverage type for condominiums only covers the interior of a structure
Mobile Home Form (HO-7)Open perilSimilar to an HO-3 policy, but for a mobile or manufactured home
Modified Form (HO-8)Named perilDesigned for homes that are 40 years or older, this covers the same named perils in an HO-1 policy

Keep in mind that whether you have a named-peril or open-peril policy, floods and earthquakes will likely be excluded. You can purchase separate insurance for these risks.[1]

Common causes of foundation damage

Many issues can cause foundation damage, and while some can be prevented with proper maintenance, others can be unexpected. Some of the most common causes of damage include:

  • Improper drainage

  • Flooding

  • Freezing and thawing

  • Nearby trees

  • Nearby construction and heavy machinery[2]

Read More: Do I Need Home Repair Insurance?

When does homeowners insurance cover repairs to your foundation?

Depending on how your policy is written, you may be covered for a specific list of named perils, or you may have open peril coverage, which covers everything except a specific list of perils. It’s important to read your policy and understand how it works. Most homeowners insurance policies will cover certain risks, however.

Covered perils

The following causes of foundation damage are common perils that will most likely be covered by your homeowners insurance policy:

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When does homeowners insurance not cover repairs to your foundation?

Homeowners insurance generally only covers unexpected events, not damage that you could prevent with proper maintenance. It also doesn’t provide flood or earthquake coverage, which needs to be purchased as a separate policy or endorsement.[3] Read your policy to find out what is and isn’t covered, but in general, you can expect certain issues to be excluded from most home insurance policies.

Excluded perils

If any of these issues cause damage to your foundation, it’s unlikely your homeowners policy will cover the repairs:

  • Flooding

  • Earth movement, such as earthquakes and sinkholes

  • Nuclear hazard or war

  • Government action

  • Neglect or intentional damage[4]

A standard home insurance policy also may not provide enough coverage in the event of foundation damage during a home improvement project. You may want to purchase renovation coverage before beginning any construction or renovations.

Filing a claim for home foundation damage

You’ll want to notify your insurance company as soon as possible if your foundation repair costs exceed your deductible. Your home insurance provider will send an insurance adjuster to inspect the property and ask you questions about the incident. The goal of this visit is to determine how much your insurance company will have to pay for the repairs to your foundation.

Take photos and videos of the damage before trying to fix the problem. After you’ve documented the damage, take steps to prevent the problem from worsening.

Keep in Mind:

Keep your receipts for whatever you buy to fix the problem so you can submit them to your insurance company for reimbursement.

If you need to live somewhere else while your foundation is being repaired, remember that your homeowners insurance will most likely pay for your additional living expenses, assuming the damage results from a covered loss. Just remember to provide proof of your expenses.[5]

Check Out: How to File a Home Insurance Claim

How homeowners insurance companies pay claims

Once the insurance adjuster has assessed the damage, your insurance provider will write a settlement check for the actual cash value of repairing your foundation. Once the work is completed, you will receive a payout for the remaining replacement cost. If you have a mortgage, the funds will likely go to your mortgage servicer or lender and be released to you as the project is completed.

Learn More: Actual Cash Value vs. Replacement Cost: Which Is Best?

How much does foundation repair cost?

The cost of repairing your foundation depends on the severity of the damage. You’ll want to consult a few certified contractors or structural engineers to collect quotes and evaluate your options. Most repairs will likely range from $2,156 to $7,750, according to HomeAdvisor. But you might pay upwards of $10,000 for major repairs or as little as $500 to fix a minor hairline crack.

If your claim is approved, your insurer will pay (up to your policy limits) either the actual cash value or replacement cost of the repairs minus your deductible. Most home insurance policies have replacement cost coverage for the home’s structure. Your policy will specify whether you receive the actual cash value, which is the cost of the repairs less depreciation, or the replacement cost, which is the funds required to replace what was damaged based on the cost of today’s building materials.[6]

Important Information:

Even if you have a replacement cost policy, your insurance company will likely only pay the actual cash value at first, and then provide the difference once the project is complete.

How can you prevent home foundation damage?

While you can’t always prevent disasters, your homeowners insurance will typically cover many of those risks. It’s best to be proactive about excluded perils, however. Make sure to properly maintain your home and respond quickly to signs of damage to your foundation. If you put off repairing the damage, the structural integrity of your home could be at risk.

Take the following steps to prevent home foundation damage:

  • Get a home inspection. You should get a home inspection to identify any existing foundation issues when you purchase your home. Your homeowners insurance typically won’t cover future damage related to construction defects, so you’ll want to determine whether signs of poor building practices are present, while also evaluating other potential causes of damage. The American Society of Home Inspectors also recommends getting a home inspection every two years.[7]

  • Monitor soil and trees. Make sure your land slopes away from your house to avoid water damage, and keep large bushes a safe distance away, since their growth can push into and damage your foundation.

  • Ensure proper drainage. Ensure you have gutters and downspouts that direct water away from your foundation. A sump pump can also help prevent water damage, and you may even want to consider waterproofing the exterior of your foundation.

  • Watch for signs of damage. If you have diagonal cracks wider than 0.25 inches, newly slanting floors, or signs of moisture, like stains and mold, you should consult a structural engineer. These signs indicate more serious foundation issues.[8] Most foundation cracks are cosmetic and may even go away on their own, but a sudden, wide, or jagged crack is cause for concern.

Check Out: 30 Seasonal Home Maintenance Tasks to Add to Your Personal Checklist

Home insurance and foundation repair FAQs

Your home’s foundation is critical to the safety and durability of your house. Here are answers to some commonly asked questions about home foundations and homeowners insurance.

  • What are the warning signs of home foundation damage?

    Warning signs of foundation damage include sudden, wide, or jagged cracks that don’t close up on their own, cracked tiles, sloping floors, and doors and windows that won’t close all the way. Signs of moisture damage can also indicate damage to your foundation.

  • Does home insurance cover cracks in the foundation?

    Foundation cracks are only covered by homeowners insurance if they result from a covered peril. For example, if the crack was due to water damage from a burst pipe or a vehicle driving into your foundation, the repairs would be covered. They wouldn’t be covered if the crack was due to wear and tear or neglect.

  • Can a house collapse from foundation issues?

    It’s unlikely that your home will collapse entirely from foundation issues, but they can do harm to your home’s structural integrity, which can lead to other damage, such as broken plumbing. The good news is that if you pay attention to warning signs and address issues promptly, you can avoid any serious harm to your home and your family.

  • When will a home insurer deny your claim?

    Your home insurance company may deny your claim for a number of reasons: if you intentionally damage your home or are neglectful, someone else (such as a contractor) is at fault for the damage, your home sustains damage from a peril that isn’t covered in your policy, you don’t provide enough documentation, or you violate the terms of your policy. Home insurance companies will also typically deny claims arising from wear and tear.

  • How can you prevent home foundation damage?

    You can do many things to prevent home foundation damage. Get a home inspection before you move in and every two years after. Maintain your property by removing trees and bushes that are too close to your home and ensuring proper drainage with gutters. And if you notice any sudden signs of damage, get help from a contractor or structural engineer right away.

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Sources

  1. Florida Office of Insurance Regulation. "Homeowners' Insurance."
  2. Realtor.com. "Does Your House Have Foundation Problems? Ask Yourself These 5 Questions."
  3. Insurance Information Institute. "Do I need flood insurance for my home?."
  4. Rocky Mountain Insurance Information Association. "What Homeowners Insurance Does Not Cover."
  5. Insurance Information Institute. "How to file a homeowners claim."
  6. North Carolina Department of Insurance. "Actual Cash Value vs. Replacement Cost Value."
  7. American Society of Home Inspectors. "Structure."
  8. National Association of Realtors. "7 Fixes to Avoid Major Foundation Problems."
Lindsay Frankel
Lindsay FrankelInsurance Writer

Lindsay Frankel is a content writer specializing in personal finance and auto insurance topics. Her work has been featured in publications such as LendingTree, The Balance, Coverage.com, Bankrate, NextAdvisor, and FinanceBuzz.

Danny Smith
Edited byDanny Smith
Photo of an Insurify author
Danny Smith
  • Licensed auto and home insurance agent

  • 4+ years in content creation and marketing

As Insurify’s home and pet insurance editor, Danny also specializes in auto insurance. His goal is to help consumers navigate the complex world of insurance buying.

Featured in

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