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 Type||Named or Open Peril Dwelling Coverage?||What’s Covered?|
|Basic Form (HO-1)||Named peril||Damage from fire, smoke, explosion, lightning, volcanic eruption, hail, wind, vandalism, theft, aircraft, vehicles, riots|
|Broad Form (HO-2)||Named peril||All 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 peril||Any 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 home||Items in the dwelling, including those installed by the tenant|
|Comprehensive Form (HO-5)||Open peril||Any damage to the structure of the home that isn’t a result of an excluded peril|
|Unit-Owners/Condo Form (HO-6)||Named peril||This coverage type for condominiums only covers the interior of a structure|
|Mobile Home Form (HO-7)||Open peril||Similar to an HO-3 policy, but for a mobile or manufactured home|
|Modified Form (HO-8)||Named peril||Designed 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.
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:
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.
The following causes of foundation damage are common perils that will most likely be covered by your homeowners insurance policy:
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. 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.
If any of these issues cause damage to your foundation, it’s unlikely your homeowners policy will cover the repairs:
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.
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.
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.
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. Most foundation cracks are cosmetic and may even go away on their own, but a sudden, wide, or jagged crack is cause for concern.
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