Will My Homeowners Insurance Cover Foundation Repair?

Many times, people buy a property only to later find out that there are foundation repair issues. Sometimes, you may notice cracks and/or other defects in the foundation. Foundation related issues cannot be taken lightly because they can have an impact on the overall structure of the property, warns Windermere, a property management company.

Also, the cost of repair of even minor foundation defects can be quite expensive – sometimes exceeding $10,000. In such cases, who pays for the repair? The home insurance policy or the builder?

Check your insurance policy

The first thing you should do is check your home insurance policy. In most cases, home insurance does not cover damage to the foundation that may have resulted from poor construction or soil erosion.

Most home insurance policies cover damage caused by natural disasters like a flood or an earthquake, but anything related to a builder is off-limits. However, every home insurance policy is different.

But before you jump to conclusions and assume that foundation repairs are not covered, it is recommended that you review your policy thoroughly to determine what is and what is not covered. Home insurance companies usually state in the policy if the owner is responsible for the maintenance of the home and controlling conditions that can cause flooding or damage to the foundation.

Thus, whenever you buy a home and get it insured, you should always ask if the policy covers foundation damage that may be due to poor workmanship on the part of the builder. But in case your home insurance policy does not cover foundation damage, there are still some options for you.

Builders and warranties

When it comes to new homes, most builders offer warranties that cover material, labor, structure, and defects for a period of 5-10 years. If your home is relatively new, you should read the warranty and determine if the policy is still in effect.

Check to see what is covered and what isn’t. Again, it is important to know what is written in all the paperwork you receive when you buy a property. And you will receive many documents – from the builder, from your financer, from your insurance company, etc.

It can be overwhelming, but if you want to know whether you’re adequately covered, make sure you read everything. Many people make the mistake of not reading the documents provided by the builder.

Some of the papers have to do with the warranty which you have to sign and return. If you fail to return these warranty papers, your home may not be covered for structural damage.

Have the property inspected

Also, it is recommended that you get the property inspected by a professional builder before you buy it. You want to make sure that the home is well constructed and the foundation is intact with no major defects.

Spending a few hundred dollars in hiring a professional to assess the home for structural defects can save you from a major headache and thousands of dollars if a defect is discovered later on.

Get additional coverage

In some cases, the coverage provided by the home builders’ insurance or your one personal home insurance may not be adequate. To ensure that you have sufficient insurance to cover any structural defects, it might be a good idea to look at supplementary insurance.

Today, many insurance companies give the option of purchasing a dwelling foundation rider to cover specific perils that can be caused by water seepage, a leaking basement, or a burst main water pipe. These same supplementary policies also help cover structural damage caused by natural disasters and sewer backups.

Address the problem immediately

The best way to avoid these home-related problems is to be proactive. At the first sign of warning of any foundation damage, call the builder. The longer you leave structural damage unrepaired, the more money it will cost you to have it all fixed in the future.

Even if you find that foundation repairs are not covered by your home insurance company or your builder, the important thing is to be proactive. If you notice any warning signs of potential foundation damage, don’t take it lightly.

Act immediately and get it repaired before the problem gets worse. Also, keep in mind that even if your home insurance covers foundation repairs, they may not approve your claim if their investigation shows that the issue was ignored and the current cost of repair is higher because action was not taken earlier.

Overall, the only way to know if your home insurance covers foundation repair is to know and understand what your insurance policy entails. If you don’t understand something, ask. If you think something is missing or that you don’t have sufficient coverage, handle this issue right at the very beginning.

Make sure you have the property assessed before buying. Once you buy, make sure you understand what your home insurance policy covers and what warranties the builder offers. All these steps can help you deal with foundation repairs if they occur in the future.