Foundation Insurance

Foundation damage to a home can happen at any time. Are you covered?

You may be surprised when you get the answer from your insurer. Foundation damage coverage is not automatically covered on most homeowner’s insurance policies.

(Top 10 homeowners losses not covered)

In many cases, foundation coverage is excluded, and you may have to request to have your policy endorsed to include this coverage. The cost and amount of coverage can differ vastly from insurer to insurer.

What does it cover?

Foundation coverage is not the end-all solution to the potential problems you might have. Typically, foundation coverage, more correctly referred to as “foundation water damage coverage,” only serves to reimburse the policyholder for a foundation issue that RESULTS from water damage from your plumbing.

Perhaps a leak in a pipe within the foundation causes the foundation to sink, leading to many potentially expensive problems.

Here is some example verbiage straight from a homeowner’s insurance policy:

“For an additional premium we cover accidental escape of water or steam from a plumbing or heating system within or below the floor slab, footings or foundation including settling, cracking, bulging, shrinking or expansion of foundations, floor slabs or footings that support the dwelling when damage is caused directly by accidental escape or leakage of water from a plumbing system. This extension of coverage applies only to property described under Coverage A — Dwelling.”

Of course, the policy goes into further detail, but that’s the gist of it.

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How much coverage can I buy?

There are a few basic options with regard to how much coverage is available to you.

Let’s take a look:

1. Coverage A Limit: This is your best option. Your policy will cover foundation water damage up to the same amount as the home.

2. Fixed Dollar Limits: You might be offered $5,000, $10,000 and so on…in increments of $5,000 up to a pre-determined maximum (perhaps $25,000). Some policies simply offer $5,000 and no more.

3. Percentage: Your insurer limits your coverage amount to a percentage of Coverage A. Fifteen percent is relatively common. You might see a “15% or $15,000, whichever is less,” clause on your policy.

4. NONE: This is more common than you think.

Many homeowners policies do not cover foundation issues, so it is paramount that you ask your insurer about this before you have a problem and not after.

What are the warning signs of foundation damage?

The first sign that you have a foundation issue is when your home starts to sink. If this happens, it’s time for an inspection by a professional who can determine if there is any structural damage and what needs to be done to fix the situation.

The next step would be to call in a structural engineer or architect to help with the design process and foundation repairs. A good contractor will also check out the property before they start work on it so he/she can determine the structural integrity of the building and exactly what needs to be done.

You should also have an expert come and look at any foundation cracks and cracks in basement walls you notice as soon as possible, as well as any mold issues. Mold is hazardous to your health and it is also a sign that there could be an issue with your home’s foundation.

Uneven floors are another potential warning sign.

What’s the bottom line?

When it comes to your most valuable asset, don’t be afraid to ask your homeowners insurance company about available coverage. Simply assuming you have coverage won’t get you anywhere at claim time.

Contact a local independent insurance agent if you can’t obtain this type of coverage on your current policy or can’t get the limits of coverage with which you are comfortable.

Related: Does flood insurance cover seepage?