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.
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 damage to the foundation 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.
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.
When it comes to your most valuable asset, don’t be afraid to ask 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?