insurance coverage for foundation repair

Will My Homeowner’s Insurance Cover Foundation Repair Costs?

Like many homeowners faced with an expensive project like foundation repair, you’re wondering if there’s *any chance* that your homeowner’s insurance policy can help cover the costs. Sounds reasonable, right?? 

Anchor Foundation Repair Bryan College Station

Since 1985,  Anchor Foundation Repair has been inspecting and repairing foundations in Bryan, College Station, and the surrounding Brazos Valley communities like Madisonville and Navasota. We also serve as a resource to help educate and empower homeowners with the essential foundation repair info that they want to know.

The answer to this insurance coverage question is complex, as are most things about insurance. We asked some insurance agents and did personal research to help get this answered for you. Keep in mind that we are not a substitute for your insurance agent.

This article will cover the basic parts of a homeowner’s insurance policy, typical coverages and exclusions, and where you will most likely find a way for foundation repair to be covered by insurance.

*Slight Spoiler Alert* Getting home insurance to cover foundation repair costs is something to look into, but don’t get your hopes up too high because the situations are limited.

Where to Find Foundation Coverage In Your Insurance Policy

There are 6 typical coverage types in a normal homeowner’s policy.

  1. The Main Structure – i.e. your actual home aka dwelling in insurance-speak
  2. Other Structures – such as a detached garage, detached carport, or shed
  3. Personal Property – all the stuff inside your home aka contents
  4. Additional Living Expenses – coverage for an alternate living arrangement if you are forced to move out of your home because of the claim incident
  5. Medical Coverage – if someone is injured on your property, this can help cover their medical expenses like x-rays, stitches, or an ER visit
  6. Liability Coverage – this covers you if you are sued because someone is injured on your property

Foundation coverage possibilities are part of items one and two about covered structures. Homeowner’s insurance shields against various damage to those structures, but not all causes are covered. Most importantly, the cause of the problem, known as “perils,” matters a great deal. In other words, what caused the problem with your structure?

does insurance cover foundation repairs?
Insurance . . . so fun . . .

There are terms like “open perils” and “excluded perils,” which affect your coverage. “Open perils” typically cover all damage unless excluded. Then “excluded perils” are where you’re not going to be covered for events like flood, insect damage, wear and tear, war, nuclear damage, earth movement, and maintenance issues. 

Check your policy (or ask your insurance agent) for specifics on your particular coverage and exclusions. We’ll still provide examples and more discussion on both types of perils for clarity next.

Open Peril Examples

Common causes that homeowners insurance covers in “open perils” are things like the following. Usually, these are things that can be identified as happening on a particular day or given a specific incident date.

insurance coverage for foundation damage
If a plane falls from the sky and damages your foundation, well, you might be covered . . .
  • Snow or ice damage
  • Vehicle or aircraft damage
  • Explosions
  • Falling objects
  • Fire or lightning damage
  • Hailstorms or windstorms
  • Riots or civil disturbances
  • Vandalism
  • Volcanic eruptions
  • Water damage from plumbing or HVAC issues

If your foundation damage results directly from one of these perils, with a clear event date, your homeowner’s insurance is likely to cover repair costs after your deductible and up to the coverage limits.

On the flip side, damage caused by events not listed as covered perils will not be covered. Your policy should specify covered open perils.

You may notice that these open peril events like riots or falling objects hitting your house and causing foundation damage are not very likely to ever happen. But by golly, if your house exploded and the foundation was damaged, you’d be covered if it’s listed in your covered open perils. So there’s that good news I guess . . . 

Among these open perils, water damage from plumbing or HVAC issues is the most likely normal homeowner scenario to cause foundation damage. We will discuss it more specifically later in the article.

Common Excluded Perils

Insurance policies commonly exclude certain things and are stated as “excluded perils.” Flooding and earthquakes typically fall in the “excluded” category but can be covered by purchasing an add-on policy for coverage. However, some perils are entirely excluded with no additional coverage options.

Here’s a list of commonly excluded perils with notations on which might have available coverage for an added cost.

is there insurance coverage for foundation repairs?
Is this house floating away???
  • Drought or lack of rainfall
  • Earthquakes – separate policies available
  • Failure to maintain the property
  • Faulty construction
  • Flooding – separate policies available
  • Natural foundation settlement or earth movement
  • Negligence
  • Normal wear and tear
  • Pressure from tree roots
  • Sewer line backups or city-side infrastructure failures – separate policies available

Based on the list above, the causes of most foundation issues (from common and typical causes) are likely excluded perils. Foundation settlement and problems are most often the result of gradual occurrences over time, such as climate/moisture changes, tree root intrusion, faulty construction, or the #1 cause: normal wear and tear from resting on expansive clay soils.

Most Likely Way For Insurance to Cover Foundation Damage

The plumbing leak is one case where it seems that *some* insurance policies might include it as an open peril and not specifically exclude it. OR coverage for a plumbing leak that caused foundation damage could be an extra coverage endorsement that you have added to your policy. 

foundation problem caused by plumbing leak

IF you can directly link your foundation issue to a plumbing leak, and it’s not excluded, you might be covered for the repair. It’s tricky because it has to be included in open perils and also not on the “excluded” list. 

Reading through insurance policy paperwork is intimidating and a little hard to understand. Check with your insurance agent to clarify if plumbing leaks are covered under your policy or under any add-on endorsements. 

This coverage applies only if a plumbing leak caused your foundation problem; other common and more likely causes of foundation settlement aren’t going to be covered, unfortunately.

Insurance Wording for Foundation/Water Damage Endorsements

Insurance policies often exclude damage to concrete slabs and underground pipes, but some companies offer additional coverage through endorsements. 

A “Foundation and Water Damage Coverage” endorsement must be purchased separately, as it’s not automatically included in your policy. You need to request this from your insurance agent or select this option during the purchasing process if it’s available.

Foundation and Water Damage Endorsement Wording and Cost

Here is some actual wording from a “Foundation and Water Damage Coverage” endorsement:

“We cover settling, cracking, shrinking, bulging, or expansion of the foundation, floor slab or footings that support the dwelling caused by seepage or leakage of water or steam from within a plumbing, heating, air conditioning, or automatic fire protective sprinkler system.”

will my insurance pay for foundation repairs?

“This coverage includes the cost of tearing out and replacing any part of the building necessary to repair the system from which the leakage or seepage occurred. We do not cover loss of the system from which the water or steam escaped.”

According to sources, an endorsement of this kind would likely add between $100 to $200 (or even more in today’s economy) in cost per year to your insurance premium. 

Foundation and Water Damage Endorsement Limits

This type of endorsement coverage also usually has a set limit and doesn’t go all the way up to the full amount listed on your regular dwelling policy. 

Here is an example of what a “Foundation and Water Damage Coverage” Endorsement might actually say about this monetary limit of the coverage: 

Foundation Repair Solutions for the Brazos Valley

“Our limit of liability for this coverage will not exceed an amount equal to 15% of the Coverage A limit applicable on the date of loss or $25,000, whichever is less. This is the most we will pay for the total of all loss or costs per policy period regardless of the number of losses or claims made.”

How to Pay for Foundation Repair Without Insurance Coverage

Now you know that foundation damage can be covered by insurance in certain situations. With an open perils policy, damage from a few *rather unlikely* occurrences like a plane crash may be covered. Also, if plumbing leaks are not excluded or if you have an endorsement for foundation and water damage, repairs could be covered only if directly caused by the leak. 

foundation repair financing

Otherwise, foundation repairs are typically not covered by insurance so you are left to cover the costs on your own.

Out of the hundreds of foundation repair projects we complete annually at Anchor Foundation Repair, only about 3 or 4 have some form of insurance coverage involved. While we’re always ready to assist with insurance matters, our 35+ years of experience indicate that such occurrences are rare indeed.

We do have some ideas for you on how you can pay for foundation repairs though. Check out this article next: “How Can I Pay for Foundation Repair Costs? 7 Best Options.”