Does homeowners insurance cover foundation issues?

Mon Oct 02 2023

A worker's gloved hand laying sealant for waterproofing cement

Home insurance may cover some foundation repairs, but there are also a lot of causes of foundation damage that are not covered by most policies. Unfortunately, the damage that happens over time is also the kind that is typically not covered by insurance.

That’s probably distressing to hear – especially considering how expensive problems with your home’s foundation can be to fix! A strong foundation is critical for a dry, well-insulated, and stable home, so it’s good to know:

  • What types of damage your home insurance policy covers.

  • The common causes of foundation damage.

  • How to spot foundation damage.

Let’s get started.

Homeowners insurance and foundation repairs: What’s covered?

As with most types of property damage, home insurance covers damage to your foundation when it’s caused by a covered peril (i.e., a covered cause of loss) as outlined in your policy.

So what’s a covered peril? Again - it depends on your policy. However, most homeowners insurance covers damage caused by:

  • Lightning or fire.

  • Windstorm.

  • Aircraft.

  • Explosion.

  • Riot or civil disturbance.

  • Vehicle.

  • Vandalism.

  • Falling object.

  • Volcanic eruption.

  • Collapse from the weight of snow, sleet, or ice.

  • Water damage from plumbing, heating, or air conditioning overflow.

Basic coverage policies and broad coverage policies (HO1 and HO2, respectively) list specific covered perils and exclude all others. Special coverage policies and comprehensive coverage policies (HO3 and HO5) provide open-peril coverage – as does our House & Property insurance. These policies cover all risks except those expressly not covered in the policy.

When are foundation problems not covered?

Your homeowners insurance likely doesn’t cover foundation issues if something other than a covered peril causes them. Unfortunately, the causes that aren’t covered tend to be among the most common problems for foundations.

For example, almost all homeowners policies exclude coverage for earthquakes and floods – two disasters that can cause serious foundation damage. You may be able to cover this risk with separate earthquake and flood insurance in areas where these natural disasters are prevalent.

You should also note that home insurance is intended for sudden and accidental loss or direct physical loss. Normal wear and tear or cracking to any area of your home, including the foundation, doesn’t fit this profile, so it’s almost always excepted or excluded.

 For your foundation, that means you can't expect coverage for damage caused by: 

  • Settling, shifting, or cracking resulting from soil or temperature fluctuations.

  • Earth movement.

Foundation issues caused by faulty construction aren't usually covered by your homeowners insurance either.

Common causes of foundation problems

Foundations can deteriorate slowly or become damaged quickly by an unexpected event. Either way, knowing how and why your foundation may experience damage is important.

Your home’s foundation sits in direct contact with the ground, making it susceptible to numerous environmental factors that can cause damage. Temperature changes, poor drainage, too much water, too little water, tree roots, and faulty construction can all damage your foundation over time. Other common causes of foundation damage include:

  • Natural disasters like earthquakes, mudslides, and tornadoes.

  • Plumbing leaks.

  • Earth movement.

If you notice any of these conditions, you want to inspect your foundation for damage immediately and get repairs before it worsens.

Early signs your foundation has problems

You can take several measures to protect your home's foundation. But first, it’s important to know the warning signs of a troubled foundation:

  • Cracks in your home’s sheetrock, chimney, tiles, or any part of the exterior can signal a problem with the foundation. Horizontal or zig-zag cracks are particularly concerning, and any growing cracks can signal a worsening situation.

  • Moisture in a basement or crawl space can indicate a crumbling or cracked foundation.

  • Crumbling anywhere on the foundation could mean deteriorating concrete and impending failure of the foundation.

  • Shifting, warping, or leaning walls, floors, ceilings, or support posts can indicate a serious foundation problem. 

  • Doors and windows that don’t fit or close properly, cabinets and counters that separate from the wall, or nails that pop out of the drywall may all indicate a foundation that is settling, sinking, chipping, or flaking.

  • Bugs in your home may indicate cracks in the foundation or gaps where insects or other vermin can enter.

How to protect your home’s foundation

Probably the first step to protecting your foundation (and your bank account!) is to have a thorough home inspection before you buy a house. That way, you might avoid purchasing a home that already has foundation problems. 

Once you’ve moved in, maintain proper drainage of your soil, ensuring it never gets too wet or too dry. And be sure your grading is up to par, properly draining water away from your home when it rains. Another important step for keeping water away from your foundation? Make sure  your  gutters and install French drains, if necessary.

Other tips for protecting your foundation include:

  • Keeping tree roots from growing into, under or toward your foundation.

  • Cleaning your gutters to avoid spillage onto the soil around your foundation.

  • Laying mulch around the perimeter of your home to maintain the appropriate moisture and temperature of the soil near your foundation.

If you see any cracks in your foundation, it's best to determine the cause of the cracks and repair them immediately before they worsen. No matter what type of foundation you have, it’s usually much easier to fix the problem early than to address major structural problems later.


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