Is Foundation Damage Covered by Homeowners Insurance?

Homeowners insurance protects a residence and its contents against unforeseen events. It provides a financial safety net, covering repair or replacement costs for damage to the dwelling, personal belongings, and liability for injuries on the property. Its purpose is to mitigate significant financial burdens from property damage or legal claims.

Understanding Homeowners Insurance Coverage Basics

Understanding the fundamental concepts of homeowners insurance policies is important for determining coverage, as a policy’s structure dictates what events, or “perils,” are covered. A peril refers to the direct, sudden, and accidental cause of loss or damage to property.

Homeowners insurance policies typically fall into two main categories: “named perils” and “open perils” (also known as “all-risk”). A named perils policy provides coverage only for the specific risks or perils explicitly listed in the policy document. If a cause of damage is not enumerated, it is not covered.

Conversely, an open perils policy offers broader protection, covering all causes of loss except for those specifically excluded in the policy language. This means that if a peril is not explicitly excluded, it is generally covered. Knowing your policy type is key to determining if foundation damage is covered.

Covered Causes of Foundation Damage

When foundation damage occurs, coverage under a homeowners insurance policy depends on the specific cause of that damage. Policies typically cover foundation damage if it results from a sudden and accidental event, which is considered a covered peril. For instance, damage stemming from a fire or a lightning strike is generally included under most standard policies.

Explosions, whether from internal sources like a gas leak or external events, are also commonly covered perils that could lead to foundation damage. Vehicle collisions with the home that damage the foundation are likely covered. Damage from aircraft, falling objects, riot, or civil commotion also typically falls under covered perils.

Vandalism or malicious mischief, such as intentional foundation damage, is usually covered. If a large, heavy object, such as a tree or a utility pole, falls onto the house and impacts the foundation, the resulting damage is often covered. The weight of ice, snow, or sleet accumulating on the roof that subsequently causes structural stress leading to foundation issues may also be included.

Excluded Causes of Foundation Damage

Homeowners insurance policies often contain specific exclusions for certain causes of foundation damage. These exclusions are nearly universal and important for homeowners to understand. Damage caused by earth movement, for example, is almost always excluded from standard policies.

This exclusion encompasses events such as earthquakes, landslides, mudslides, and sinkholes. To obtain coverage for these perils, homeowners typically need to purchase a separate earthquake insurance policy or a specific endorsement. Flood damage, which can severely impact foundations, is also universally excluded from standard homeowners insurance policies.

Coverage for flood-related foundation damage requires a separate flood insurance policy, often available through the National Flood Insurance Program (NFIP) or private insurers. Damage that arises from neglect or a lack of proper maintenance is also excluded. This includes issues that develop gradually over time due to the homeowner failing to address known problems or conduct routine upkeep.

Wear and tear, which refers to the natural deterioration of materials over time, is another common exclusion. Similarly, damage caused by the settling, shrinking, bulging, or expansion of pavements, patios, foundations, walls, floors, or ceilings is typically excluded. This is because such issues are often considered predictable occurrences or maintenance concerns rather than sudden, accidental perils.

Steps to Take When Foundation Damage Occurs

Upon discovering foundation damage, homeowners should take immediate steps to address the situation and initiate a claim. The first priority is to ensure the safety of all occupants, evacuating the premises if the damage appears severe or poses an immediate hazard. After ensuring safety, the homeowner should take extensive photographs and videos of the damage from multiple angles, capturing both the extent and location of the issues.

Take reasonable steps to prevent further damage, such as shoring up a compromised area or redirecting water away from the foundation. Do not undertake permanent repairs before consulting the insurer. Promptly notify the insurance company about the damage. This notification should include details about when the damage was discovered and the suspected cause.

Homeowners should prepare to provide their policy number and a clear description of the damage when speaking with the insurer. An insurance adjuster will typically be assigned to inspect the property and assess the damage. During this visit, homeowners should be present to answer questions and point out all affected areas.

Before significant repairs, obtain multiple detailed estimates from qualified, reputable foundation repair contractors. These estimates should itemize the scope of work and associated costs. Review policy documents to understand the deductible and specific terms related to foundation repair coverage.