Are foundation repairs covered by home insurance?
The foundation of your home supports the structure, so when something goes wrong with the foundation, things can go very wrong with your entire house. Fixing a foundation may cost a few thousand dollars; but replacing a foundation often can run 10 times that amount.
So, if you find your foundation needs to be fixed, can you turn to your home insurance to help pay for it? Well, it depends.
Which foundation issues are covered or excluded by your homeowners insurance?
In many cases, foundation damage such as cracking or settling aren’t covered by a home insurance policy. Why? If the damage was caused by normal wear and tear, it’s up to you to pay for repairs — not your insurance company. Taking care of normal wear and tear is simply one of the costs of home ownership.
Loretta Worters, a spokeswoman for the Insurance Information Institute, notes that a home insurance policy typically excludes foundation-related damage caused by natural settling, cracking, shrinking, bulging or expansion of the foundation, growth of tree roots or faulty construction.
“Generally speaking, home insurance won’t cover general foundation repair,” Worters says. “That’s why it’s important to regularly monitor your foundation and home for signs of shifting, like cracks, and doors that are hard to open or close. Foundation cracks can cause long-term damage to your home’s foundation. A minor crack is not determined by size, but by the severity of the crack.”
Now, if a foundation is damaged in a sudden accident, home insurance typically will pick up the tab (minus your deductible). What qualifies as a sudden accident? If a car rams into your house or a tree falls on it and the foundation sustains damage, for instance, it usually is classified as a sudden accident.
Other foundation damage that normally is covered by a standard home insurance policy involves perils such as:
- Collapsing snow, ice or sleet
Things get a little bit more complicated if the foundation is damaged in a flood, earthquake or hurricane. Typically, a home insurance excludes damage caused by these three natural disasters. However, you can buy separate flood, earthquake or hurricane coverage on top of your standard home insurance policy.
Standard home policies also don’t cover damage to the foundation or any other part of your house that’s caused by a sinkhole. Optional coverage for sinkhole coverage is available in some states, though.
You also might be able to buy what’s known as a “dwelling foundation” rider, which covers foundation damage caused by certain events that are outlined in the rider. A covered event might, for example, be foundation damage triggered by a burst pipe.
If you’re uncertain about which foundation issues are included and excluded in your home insurance policy, carefully review your policy or contact your insurance agent or insurance provider.
How do you make an insurance claim for foundation repairs?
Depending on the extent of the damage, it might be wise to call a reputable foundation repair contractor before filing a claim. This way, you might prevent further damage.
Next, do some math. If repairing the foundation damage on your own would cost less than your deductible, then it makes no sense to file a claim. However, it’s likely that the repair bill will exceed the amount of your deductible, which traditionally is $500 to $1,000 for a home insurance policy.
If you end up choosing to file a claim:
- Take lots of photos of the foundation damage.
- Contact your mortgage company to find out what their guidelines are surrounding home insurance claims.
- Keep a record of all of your communication with the insurance company.
What do you do if your insurance company denies your claim?
Claim denials happen a lot. Be sure to keep your cool and gather all of the evidence you can if the insurance company rejects your claim for foundation repair.
Other things to keep in mind:
- Go over the claim denial letter from the insurer.
- Reach out to the insurer’s adjuster if you feel they’re in the wrong.
- Look at hiring a public claims adjuster or an attorney if you decide to move ahead with disputing the claim denial. A public adjuster or an attorney will work on your behalf, and not on behalf of the insurance company.