Does Insurance Cover Foundation Cracks?

Understanding how your insurance policy protects your home is important. For foundation cracks, coverage depends on the damage’s cause and your homeowner’s policy language. Standard policies contain limitations, so understanding these details before an issue arises is important.

Understanding Standard Home Insurance Coverage

A typical homeowner’s insurance policy, often referred to as an HO-3 policy, provides broad protection for your home’s physical structure, including its foundation. This policy usually covers damage on an “open perils” basis, meaning it covers any loss unless specifically excluded. For your foundation to be covered, the damage must stem from a sudden and accidental event, known as a covered peril.

Common covered perils that could lead to foundation damage include fire, lightning, windstorms, and hail. Explosions, vandalism, or damage caused by vehicles and falling objects like trees are also typically included. If a direct and sudden event like one of these causes cracks or other damage to your foundation, your standard homeowner’s policy may provide coverage for repairs.

Typical Reasons Insurance Does Not Cover Foundation Cracks

Many common causes of foundation cracks are explicitly excluded from standard homeowner’s insurance policies. These exclusions differentiate between sudden, unforeseen events and issues from gradual processes or lack of maintenance.

Damage from earth movement is a common exclusion. This includes events such as earthquakes, landslides, and general subsidence. If your foundation cracks due to ground shifting, a standard policy will not cover repair costs.

Another frequent exclusion involves water damage that is not sudden and accidental, particularly gradual water seepage or hydrostatic pressure. Standard policies do not cover damage from external groundwater or general flooding. This type of water intrusion is often considered a maintenance issue.

Normal wear and tear and deterioration are also standard exclusions. As a home ages, minor settling and small cracks are natural occurrences. Damage that develops gradually over time due to aging, lack of routine maintenance, or neglect is generally not covered. This includes issues like foundation settling or expansion of the soil over time, which are considered preventable through proper upkeep.

Foundation problems stemming from construction defects or poor original workmanship are typically not covered. Insurers do not assume responsibility for issues arising from faulty design, materials, or improper building practices. While the policy may cover resulting damage if a covered peril occurs because of a construction defect, the defect itself and the cost to correct it are usually excluded.

Optional Coverage for Specific Water Damage Causes

While standard policies have limitations regarding water-related foundation damage, specific endorsements or separate policies can offer additional protection. These options address perils often excluded from basic homeowner’s coverage.

One common endorsement is for sewer backup and sump pump overflow. Standard policies typically do not cover damage from water backing up through sewers or drains, or overflowing from a sump pump. Adding this endorsement can provide coverage for property damage resulting from such incidents. This is especially relevant for homes with basements or those in areas prone to heavy rainfall.

For widespread water damage caused by natural floods, a separate flood insurance policy is necessary. Standard homeowner’s insurance policies explicitly exclude flood damage, which includes overflowing bodies of water or surface water runoff. The National Flood Insurance Program (NFIP) is the primary provider of flood insurance, offering specific coverage for flood-related damage to your home’s structure and contents, including the foundation.

Some insurers may offer limited endorsements for certain types of earth movement. These are less common for general foundation cracks and can vary significantly by provider and region. It is important to review any such endorsements carefully to understand their specific limitations and applicability.

Navigating a Foundation Damage Claim

If you discover foundation damage and believe it might be covered, thoroughly document the damage with photographs and videos, noting visible cracks or shifts. Take reasonable steps to prevent further damage, such as diverting water away from the foundation.

After documentation, contact your insurance provider as soon as possible to report the damage and initiate the claims process. Be prepared to provide details about what happened and the extent of the damage.

Your insurer will assign a claims adjuster to inspect your property. The adjuster will assess the damage, determine its cause, and gather information to create an estimate for repairs. It is advisable to be present during the inspection.

Review your insurance policy carefully to understand its specific language, particularly regarding covered perils, exclusions, and your deductible. After the adjuster’s assessment, the insurance company will communicate their decision regarding your claim. If the claim is denied or the settlement offer is unsatisfactory, you have options such as requesting clarification or pursuing an internal appeal.