Does Homeowners Insurance Cover Foundation Issues?

Q: I’ve recently noticed some cracks in the foundation of my home. I’m worried they’ll need expensive repairs, but I’m not sure if my homeowners policy covers the damage. Does homeowners insurance cover foundation issues?

A: A home’s foundation is one of its most important components, but unfortunately, foundation repair costs can be high. Whether it’s a crack from freezing or a mold infestation, seeing foundation damage can leave homeowners feeling nervous. They might even wonder, “Will my homeowners insurance cover foundation issues?” The answer, in some cases, is yes—but it depends on the cause of the issues.

In order for homeowners insurance to cover house foundation repair, the damage must be caused by a covered event. Common covered events include acts of nature, such as tornadoes, as well as fire or sudden and accidental water damage. However, the answer to “Does homeowners insurance cover foundation issues?” comes with a few caveats. For example, insurance won’t typically cover damage from owner negligence or regular wear and tear.

Homeowners insurance generally covers foundation issues up to the policy’s dwelling coverage limits if the issues were caused by a covered event, such as a tornado or fire.

Homeowners asking, “Does insurance cover foundation issues?” are often relieved to learn that their policy will generally cover repairs for damages that were caused by events outside of their control. The list of covered perils may vary slightly, but most policies cover foundation damage that’s caused by natural weather events, such as thunderstorms or tornadoes.

If a house’s foundation issues are the result of fire, lightning, or windstorms, the problem is more likely to be covered by homeowners insurance. Most policies also cover the damage from fallen trees or the weight of snow and ice.

Homeowners might ask, “Does homeowners insurance cover foundation damage from non-weather events?” The answer is that some non-natural perils are covered as well. These include vehicle collisions, vandalism, and explosions. If a vandal takes a sledgehammer to the foundation of a home, for example, the homeowner’s insurance policy may cover the cost of home foundation repairs once the homeowner’s deductible has been met. On the other hand, some things not covered by homeowners insurance are neglect or wear and tear, as well as damage that could have been prevented by implementing yard drainage solutions.

However, foundation problems caused by events that are not covered will be the homeowner’s responsibility to fix.

In the event a homeowner’s insurance policy doesn’t cover their house’s foundation damage, the homeowner will be on the hook to pay for repairs. Furthermore, if a homeowner is wondering, “Will homeowners insurance cover foundation problems if I haven’t kept up on maintenance?” the answer will likely be no.

A homeowner is expected to take care of their home—including the foundation—via regular maintenance. If an insurance company finds the foundation damage is due to neglect, the homeowner’s claim will likely be denied.

For example, homeowners insurance doesn’t usually cover damage from tree roots. Tree roots grow slowly, so it’s expected that a homeowner could take care of the tree before it becomes a problem. If the homeowner lets a tree grow roots that put pressure on the home, it could be considered negligence.

Foundation issues caused by normal wear and tear or settling are typically not covered by homeowners insurance.

Not all foundation damage comes from negligence, accidents, or natural disasters. General wear and tear, such as cracks from settling or temperature changes, can damage a home’s foundation. Unfortunately for homeowners asking, “Does house insurance coverage foundation issues like concrete expansion?” or “Does homeowners insurance cover cracked foundations from settling?” the answer is usually no.

Even though a homeowner may not be expressly negligent, the regular wear and tear on a foundation often isn’t covered by homeowners insurance. Homeowners with older homes or those in areas with lots of soil movement may have to cover foundation damage repairs from settling or shifting materials on their own.

With regard to wear and tear, the best homeowners insurance companies (such as Allstate) have an expectation that homeowners will regularly inspect their foundation. They can also monitor the soil around the house and take preventive measures before problems begin.

Homeowners insurance can reimburse policyholders for covered foundation issues through actual cash value or replacement cost coverage. 

After learning the answer to the question “Does homeowners insurance cover foundation repairs?” homeowners may wonder how their claim will be paid out if approved. Typically, homeowners are reimbursed for the cost of repairs either through actual cash value or replacement cost coverage.

• Cash value insurance policy pays for the cost of rebuilding a home or repairing damaged structures based on the home’s depreciated value. This is generally not the best type of policy since the homeowner is likely to have too little money to repair or rebuild the home to its former specifications.
• A replacement cost policy pays to repair damages or to rebuild the house based on the current cost of materials or repairs, up to the policy’s limits.

It’s advised that homeowners carefully read their policy documents to understand what is covered and what is excluded from coverage.

The best way for homeowners to learn the answer to the question “Are foundation cracks covered by homeowners insurance?” is to read their insurance policy carefully. There are generally two types of insurance policies: All-risk policies or named perils policies.

• All-risk policies, also called “open perils policies,” list out the exclusions to the homeowners insurance policy instead of trying to list out everything that’s covered. These policies often make it easy to see exactly what a homeowners insurance policy doesn’t cover. Homeowners with open perils policies can easily answer the question “Are foundation issues covered by homeowners insurance?” by looking at their policy’s list of exclusions. If the peril isn’t named, it is usually covered.
• Named perils policies, on the other hand, specifically list the perils or types of accidents covered by the policy. If a homeowner with a named perils policy asks, “Is foundation damage covered by homeowners insurance?” they can simply check which perils their policy covers. While named perils policies tend to be cheaper, their coverage can be limited.

Homeowners can take out additional insurance policies, such as earthquake or flood insurance, to help cover potential foundation issues.

Homeowners will need to know about a few notable exceptions when asking, “Does home insurance cover foundation issues from natural disasters?” While homeowners insurance generally covers fire, wind, and hail, most policies exclude coverage for earthquakes and floods. For those who live in an area prone to earthquakes or flooding, it’s usually a good idea to purchase a separate policy to cover these perils.

Homeowners can buy a flood insurance policy from one of the best flood insurance companies to protect their home and foundation in the event of flooding. The National Flood Insurance Program (NFIP)—a division of the Federal Emergency Management Agency (FEMA)—provides homeowners with flood insurance policies directly and through partner insurance companies. Flood insurance covers home structures and personal belongings from damages caused by flooding, including the foundation of a home.

Homeowners in earthquake-prone areas such as Alaska, California, or Nevada might wonder, “Does homeowners insurance cover foundation problems from earthquakes?” The answer is often no. Homeowners in these regions will want to purchase a separate policy from one of the best earthquake insurance companies for coverage for earthquake damage.

A foundation inspection can help homeowners determine the cause of their home’s foundation issues, which can help them decide whether to file an insurance claim.

When a homeowner sees cracks in their house’s foundation or notices warped doorways, they might worry they’re in for expensive foundation repairs. However, not all signs of foundation wear indicate a major issue. In fact, some cracks or other signs of wear might only be cosmetic, meaning that coverage for the cost of foundation crack repair may not be needed. A foundation inspection can help homeowners learn more about their foundation problems—and what to expect the cost to fix the foundation issues to be. Some signs of foundation issues on a house include:

• Bowing walls
• Cracks in basement walls and floors
• Mold
• Pests
• Sinking porch
• Sloping or uneven floors
• Sticking doors and windows
• Tilting chimney

It’s worth noting that issues may be different depending on whether a home has a slab-style vs. a crawl space foundation. A foundation inspection is usually performed by a structural engineer. These foundation specialists can spot problem areas and determine how to fix foundation issues accordingly. They let the homeowner know the severity of the situation, such as potential safety concerns or immediate needs for repair. The best foundation repair companies (such as Basement Systems or Ram Jack) can also usually recommend a plan to solve the problem, whether it’s a complicated repair that requires a foundation company or a simple epoxy job.

Homeowners can take several measures to help prevent foundation damage to their home.

The answer to the question “Are foundation cracks covered by homeowners insurance?” is that it can depend on the situation. While homeowners insurance may cover certain causes of foundation damage, it’s generally recommended that homeowners take measures to prevent foundation damage in the first place.

There are a few things homeowners can do to help slow or stop foundation issues on a house such as cracking or settling. For instance repairing a foundation crack is best left to a professional. It is of the utmost importance to manage moisture levels in the soil around the home. Soil that is too wet or too dry can put a strain on a home’s foundation. Homeowners insurance can cover water damage in some cases, but if the damage is caused by negligence or a lack of maintenance, the claim will likely be denied. For example, homeowners in areas with a lot of rain might invest in gutters to help keep excess water from pooling around the base of their home. In dry climates, homeowners may want to regularly water the soil around their homes to keep it from getting too dry and cracking or separating from the foundation.