Does House Insurance Cover Foundation Issues?

Homeowner’s insurance provides financial protection for your dwelling, personal belongings, and liability against various unexpected events. Understanding your policy’s scope is important for homeowners to know what protections are in place for their significant investment.

Standard Homeowner Policy Coverage

A typical homeowner’s insurance policy covers damage to your home’s physical structure on an “open perils” basis. This means the policy covers any cause of damage unless specifically excluded. Covered perils that can lead to foundation damage include fire, lightning, windstorm, hail, explosion, or damage from a falling object.

Damage caused by a sudden and accidental discharge of water from a plumbing system, such as a burst pipe, is also commonly covered. For instance, if a sudden pipe burst leads to significant erosion around the foundation, the resulting damage might be included in coverage. The determining factor for coverage is the sudden and accidental nature of the event that caused the damage, rather than the damage itself.

Common Exclusions for Foundation Damage

Many common causes of foundation damage are excluded. Damage resulting from the natural settling, shifting, expanding, or shrinking of the foundation is not covered. These issues are considered normal wear and tear or gradual deterioration, which standard policies do not cover.

Earth movement, such as earthquakes, landslides, mudslides, or sinkholes, is excluded from standard policies. Homeowners need to purchase separate coverage for these specific perils. Standard policies do not cover water damage that is gradual or results from neglect. This includes flood damage from external sources, which requires a separate flood insurance policy.

Damage from water backing up through sewers or drains, or from sump pump overflow, is excluded. Slow, continuous leaks or seepage from groundwater or prolonged plumbing issues are not covered. Damage resulting from a homeowner’s failure to maintain the property, such as clogged gutters directing water toward the foundation, is excluded. Problems arising from faulty design, construction, or materials are not covered.

Additional Coverage Options

Homeowners can acquire additional coverage for some perils excluded from standard policies. A sump pump overflow and water backup endorsement can be added to a policy to cover damage from water backing up through drains or sewers, or from a failed sump pump. This optional endorsement can cost between $50 to $250 annually, depending on the coverage limits desired.

Flood insurance is a separate policy, primarily available through the National Flood Insurance Program (NFIP). This insurance covers foundation damage caused by floods. Earthquake insurance is available as a separate policy or an endorsement to a homeowner’s policy, providing protection against earthquake damage. These specialized policies are important for homeowners in areas prone to such natural events, as they address gaps in standard coverage.

Navigating a Claim

If you discover foundation damage, thoroughly document it with photos and videos. This visual evidence helps establish the extent of the damage and its potential cause. Take reasonable steps to prevent further damage, if safe to do so.

Promptly contact your insurance agent or company to report the claim. Be prepared to explain the damage and how it occurred. An insurance adjuster will be assigned to assess the damage and determine if it falls under your policy’s coverage. Before filing, review your specific policy documents to understand your coverage limits and deductible.