Is Foundation Damage Covered by Insurance?

Home foundations are the structural base for any house, and damage can compromise the property’s integrity. Understanding whether such damage is covered by homeowners insurance is a common concern. The answer often depends on the specific cause, as policies cover certain types of events while excluding others.

Basic Principles of Coverage

Homeowners insurance policies typically operate on a “peril-based” system, meaning coverage is determined by the cause of the damage rather than the damage itself. A “peril” in insurance terms refers to an event or hazard that can cause damage or loss to your property. For foundation damage to be covered, it must result from a peril explicitly listed or implicitly covered in your policy.

Policies generally distinguish between “named perils” and “open perils” coverage. Named perils policies cover only the specific events listed in the contract, while open perils policies cover all risks unless specifically excluded. Even with open perils coverage, certain significant events like floods or earthquakes are almost always excluded and require separate policies. The sudden and accidental nature of an event is often a key factor in determining coverage.

Commonly Covered Causes of Damage

Standard homeowners insurance policies provide coverage for foundation damage when it results from sudden and accidental events. Fire and lightning are typically covered perils, and any foundation damage sustained from these events is usually included. Damage caused by sudden water discharge, such as a burst pipe, an overflowing appliance, or a broken water heater, is also commonly covered. This generally includes water that unexpectedly escapes from plumbing, heating, or air conditioning systems.

External forces that cause abrupt damage are frequently covered. This includes foundation damage from a vehicle impacting the house, falling objects like trees or power poles, or explosions from sources like a gas leak. Additionally, damage resulting from severe weather events such as tornados, windstorms, hailstorms, or the weight of ice and snow are typically covered under standard policies. Vandalism or malicious mischief that directly harms the foundation can also trigger coverage.

Commonly Excluded Causes of Damage

Many causes of foundation damage are excluded from standard homeowners insurance policies. Earth movement, which includes events like earthquakes, landslides, mudslides, and sinkholes, is almost universally excluded due to their catastrophic and widespread nature. These perils often require separate, specialized insurance policies for coverage. Similarly, flood damage is not covered by standard policies, encompassing rising waters from rivers, lakes, excessive rainfall, or groundwater seepage into the foundation. Homeowners in flood-prone areas must acquire a separate flood insurance policy, often through the National Flood Insurance Program (NFIP).

Gradual water damage, distinct from sudden water discharge, is also typically excluded. This includes long-term leaks, continuous seepage, or moisture accumulation that leads to deterioration over time. Damage from the natural settling, shifting, expansion, or contraction of the ground beneath the home is also generally excluded, as these are considered normal wear and tear. Furthermore, foundation problems arising from poor maintenance, such as improper drainage or failure to address existing issues, are usually not covered because they are considered preventable. Construction defects, including faulty workmanship or materials, are another common exclusion, as these are issues related to the home’s original building quality rather than unexpected perils.

Interpreting Your Homeowner’s Policy

To determine your foundation damage coverage, review your homeowner’s insurance policy documents. Begin by examining the declarations page, which provides a summary of your coverage limits and deductibles. Next, read the exclusions section of your policy, as this part explicitly lists the perils and types of damage not covered. Pay close attention to the language used for earth movement, water damage, and wear and tear.

Understanding these policy details can be complex, given the precise terminology and conditions. For clarification on any specific clauses or to discuss scenarios, contact your insurance agent or company directly. They can provide insights into your policy and help you understand how potential foundation damage might be addressed under your specific coverage.