Does Homeowners Insurance Cover Foundation Repair?

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Foundation issues — whether due to damage over time or perils — are bad news for homeowners. They typically mean costly repairs and in some instances, the value of your home could decline. That said, your homeowners policy could kick in to cover the damage unless it’s caused by an excluded peril. Be sure to review your home insurance policy to understand what’s covered and what isn’t so you’ll be prepared should your foundation become faulty and put the safety of your home and its occupants at risk.

Does home insurance cover foundation repair?

Foundation damage is covered by your home insurance policy if it results from a covered peril. However, you’ll likely have to come out of pocket if the damage results from neglect, wear and tear, faulty construction, settling, insects or other excluded perils.Review your policy to clarify what’s covered and what isn’t, as it depends on your provider, coverage levels, policy exclusions and the proximate cause of the damage. The type of homeowners insurance you carry could also determine how much of the damage —if any —is covered.

What foundation issues does home insurance cover?

Standard home insurance policies include dwelling coverage, which is the portion of your policy that covers the physical structure of your home, attached structures and your foundation. HO-3 and HO-5 insurance policies (the most common types of coverage) provide dwelling coverage on an open perils basis, which means any loss that is not explicitly excluded from your policy is covered.

In most cases, foundation repair is covered by insurance when the damage is caused by the following perils:

• Fire or excessive smoke
• Hail
• Windstorms and tornadoes
• A vehicle or aircraft
• Vandalism
• Falling objects
• Water damage that results from an overflow in your A/C, heating or plumbing system or ruptured pipe
• Explosions

Reading through your policy is important to determine which perils are included in your insurance policy and how much you’re required to pay out of pocket. Depending on where you live, you may have a percentage-based windstorm or windstorm/hail deductible or a standalone windstorm insurance policy. In some places, foundation repair is not covered by insurance when the damage is caused by windstorms or wildfires. This is more common in areas prone to those types of catastrophic losses. Several Midwest, Atlantic and Gulf Coat states are prone to windstorm damage, and numerous Western states are prone to wildfire damage.

When does a standard home insurance policy not cover foundation damage?

Although home insurance does cover many sources of foundation damage, there are certain situations where coverage might be denied. For instance, some people assume that foundation damage is covered after any natural disaster. But that’s not the case.

In fact, almost all home policies specifically exclude two of the natural disasters that can do the most foundation damage: floods and earthquakes. If you live in an area where earthquakes or floods are common, speak with an agent to see if purchasing a separate earthquake or flood insurance policy would provide better financial protection for the investment you’ve made in your home.

If you’re seeking better coverage for high-risk events, you could consider a Difference in Conditions (DIC) policy which can fill in the gaps in your home insurance policy. For example, a DIC policy would cover foundation damage caused by landslides.

Most home insurance policies only provide coverage for “sudden and accidental loss” or “direct physical loss,” which is defined as damage caused by an accident or other unexpected event that is out of your control. Standard policy exclusions pertaining to foundation issues typically include:

• Wear and tear
• Neglect
• Faulty construction
• Birds, vermin, rodents, insects or animals kept by an insured party
• Settling, shrinking, bulging or expansion

Settling, shrinking, bulging or expansion

While some settling of a home is normal, especially if it is new construction, extreme settling, shrinking, bulging or expansion will cause your foundation to crack. Too much moisture can lead to soil expansion, putting pressure on your foundation, while too little moisture can cause soil shrinkage, which can lead to foundation settling or cracking. Routine home maintenance and landscaping can drastically reduce the likelihood of this happening, which is why insurers commonly deny foundation claims associated with this type of damage.

To maintain optimal moisture levels, consider watering your foundation during dry seasons and ensuring that your home has good drainage systems, such as gutters and downspouts, to keep water away from it. If you live in an area experiencing a drought, check with your local city officials on ways you can maintain your yard in accordance with mandated water restrictions.

Common types of foundation issues

Here are some of the more common foundation issues to be on the lookout for:

• Poor drainage: If water begins to accumulate around the structure, it could be a sign of a drainage issue that’s damaging to the foundation.
• Gaps around windows: Spaces around windows or issues with sticking or latching are tell-tale signs of a shifting foundation.
• Ill-fitting doors or cabinets: If the doors of your home no longer fit as they should or if the cabinets detach from the wall, this could also be a sign that your home’s foundation is shifting.
• Sagging floors: Floors beginning to sag, slope or look uneven may be a sign of a shifting foundation.

• Warning signs of foundation damage and prevention
  

  Damage type	Signs	Prevention
  Cracks in walls or floors	Bug sightings Cracks in interior sheetrock, chimney or tiles Cracks on home’s exterior	Manage moisture levels around foundation Steer clear of dry soil Clean gutters and downspouts often Ensure adequate spacing between property and downspout
  Crumbling of the foundation
  Shifting	Sloping or uneven floors Gaps around exterior doors or window frames Doors or windows don’t open or latch properly Nail pops Cabinets separate from the wall	Remove large trees near the home that could cause stress on your foundation

What to do if you experience foundation damage

If your home’s foundation is damaged in a covered peril, you should get in touch with your insurer or agent as quickly as possible to file a claim. Here’s a step-by-by breakdown of how to move forward:

• Step 1: Snap photos. Be sure to collect photos and videos to document the damage when it’s safe to do so. You want to have these handy for the next step.
• Step 2: File a claim. Reach out to your insurance provider to inquire about the process to file a claim. Most have an online portal you can use to input additional information about the foundation damage and upload proof (i.e., photos, videos and any supporting documentation if applicable).
• Step 3: Speak with the adjuster. Upon receipt of the claim, the insurance company will assign a claims adjuster to your case. They will also send a field adjuster to your home in most cases to assess the damage and include their findings in an itemized report.
• Step 4: Shop around for repair quotes. If your property damage is covered, the next step is to do your homework to find a reputable contractor. Be sure to get quotes from at least three contractors to help you make an informed decision.
• Step 5: Select a contractor: Many insurance providers, including State Farm, USAA, Safeco, Farmers, Liberty Mutual and Amica, help simplify this process by providing you with a network of preferred contractors. And some even guarantee the work done for a set period of time when you choose one of their contractors.
• Step 5: Use the payout to complete repairs. The insurance company will send you a check in the mail to cover the repair costs minus your deductible.

How to prevent foundation damage

While catastrophic losses are unavoidable, there are ways to safeguard your foundation and reduce the risk of loss from preventable damage. Here are some tips for preventing homeowners foundation issues:

• Get a home inspection before moving in: Before buying your home, you should get a home inspection from a qualified inspector. The inspection should include a careful look at your foundation so you will have a better idea of any problems you might face after the sale (or whether you should back out of the deal).
• Maintain your soil: The soil near your home should be neither too wet nor too dry — both can strain the foundation. During drought-like conditions, it may be helpful to water the soil thoroughly with a hose.
• Check your grading: You want water to drain away from your home when it rains. Aim to have at least 6 inches of grading away from your house in the 10 feet surrounding it.
• Mind your trees: Any trees that are too close to your home should be cut down or moved to prevent the roots from putting stress on the foundation. A good general rule is to allow one foot of space for roots for each inch of trunk thickness. So a tree with a trunk that is 6 inches in diameter should be at least 6 feet away from your foundation.
• Clean your gutters: Clogged gutters can lead to water spilling over the edge and directly onto the soil surrounding your foundation. Keeping your gutters clear of leaves and debris can protect your foundation from moisture-related issues.
• Lay some mulch: Mulch can be used around your house to maintain the moisture level and temperature of the surrounding soil, minimizing pressure on your foundation. Note that wood mulch should be kept at least 6 inches from the foundation or perimeter of your home to prevent termite damage. Additionally, mulch should not be used around homes that are in high-risk wildfire areas, as it can easily ignite from airborne embers.
• Address cracks promptly: If you notice any cracks in your foundation, don’t wait to get a professional out to assess the severity of the issue. Acting fast can minimize the damage — and the cost of repairing it.

You can also be proactive and help minimize foundation damage by:

• Inspecting your home twice a year for damage
• Investing in a meter to measure moisture levels
• Refraining from watering your grass or soil until dawn or dusk
• Only watering for 30 minutes at a time
• Reaching out a professional right away if you spot any issues

Frequently asked questions

• How can tree root growth cause foundation problems and how can I prevent it?
  

  Tree root growth can potentially cause foundation problems. As tree roots grow, they can push against your foundation, causing it to crack or shift. To prevent this, avoid planting large trees too close to your home. If you have existing trees near your foundation, consider having the roots trimmed regularly by a licensed tree expert. Also, keep an eye on any cracks or shifts in your foundation that could indicate damage from tree roots.

• What is the typical cost range for foundation repairs?
  

  Nationally, foundation repairs can run from approximately $5,000 to over $100,000. But the cost of foundation repairs can range widely depending on the extent of the damage and the type of repair needed, as well as factors such as climate conditions in the area and specific location costs of construction materials and labor. Minor repairs, such as fixing small cracks, may cost a few hundred dollars. However, more extensive repairs, such as fixing major cracks or shifting, can cost several thousand dollars. If the foundation has severe damage, you may need to replace it completely — and this can cost tens of thousands of dollars.

• How do I find out if a home has a good foundation?
  

  If you are in the market to buy a home, pay attention to each property’s foundation before submitting an offer. Consulting a contractor or licensed home inspector can help you get a good sense of the foundation’s condition before committing. Look out for cracks around the home’s exterior, sheetrock or chimney and scan the foundation carefully to check for crumbling, water damage, or bugs. All are warning signs that there could be bigger issues.

• How do I know if my foundation is damaged?
  

  Recognizing the early signs of foundation damage can help you take action before the damage becomes severe. Some common warning signs include cracks appearing in walls or floors, doors or windows that no longer close properly, uneven or sloping floors, and gaps around window frames or exterior doors. If you notice any of these signs, it’s a good idea to have your foundation inspected by a licensed professional as soon as possible.