If your foundation issues are from a covered peril, or loss, chances are your homeowners insurance will cover it. But if it’s not, you may have to fix the issue and damage it causes yourself. This guide can help you identify when foundation damage is covered by homeowners insurance, when it’s not, what to do when it’s not and how to prevent foundation damage before it starts. Plus, we’ll give you an idea of how much foundation repair costs and help you with the steps to file a claim with your insurance company.
When your insurance policy will cover foundation damage
Your insurance policy will cover foundation damage if the cause is from a covered peril and sudden and accidental. Perils that your homeowners insurance policy will cover include:
- Damage from falling objects, including trees.
- Severe weather events, such as hailstorms, windstorms and tornadoes.
- Lightning strikes.
- Collapse from ice, rain, sleep or snow weight.
- Water damage from A/C, heating or plumbing system overflow.
- Damage from a car, airplane or other vehicle crashing into your house.
In most instances, your homeowners insurance should cover the damage. If someone crashes into your home with a car, their property damage liability under their auto policy should cover it. If they don’t have enough car insurance liability coverage or don’t have any insurance, your home insurance will cover the costs.
If you use your home insurance policy for a claim, you’ll have to pay the deductible.
When your policy will not cover foundation damage
Even when you’re not at fault, there are circumstances when your insurance policy will not cover foundation damage. Some of those instances include:
- Lack of maintenance.
- Normal wear and tear.
- Faulty construction.
- Damage from tree roots.
- Termite, rodent or vermin damage.
- Poor drainage or sudden temperature fluctuations.
- Natural foundation settling, bulging, cracking, expanding or shrinking.
- Earthquakes and other earth movements, such as landslides, sinkholes and mudslides.
Depending on where you live in New Jersey, it may be worth getting separate earthquake or flood insurance. The closer you live to a body of water, the more likely you are to experience flooding. Even torrential downpours could cause flooding damage, which typically isn’t covered by a standard homeowners insurance policy.
Some carriers offer earthquake coverage as an endorsement or separate policy. Even though earthquakes aren’t as common in New Jersey as they are in other states, they can still happen and cause damage to your home. Especially if you live in northern New Jersey near the Ramapo Fault System.
Speak with your insurance agent to find out more about getting earthquake or flood insurance in New Jersey.
What to do if you’re not covered by homeowners insurance?
If your foundation damage isn’t covered by homeowners insurance, you’ll have to pay out of pocket to fix the foundation and any damage it causes inside your home and to your belongings.
Hiring a foundation specialist in your area is the best way to determine the cause of your foundation issues. They can help you by getting coverage under your homeowners insurance policy or by finding contractors who are experts in this type of repair. To hire a structural engineer to inspect your home’s foundation, expect to pay between $350 to $900.
How to prevent foundation damage
There are several things you can do to prevent foundation damage. Before you move into a home, have a structural engineer or foundation specialist assess the home and perform a thorough inspection. It’s normal for a foundation to settle, but shifting soil and sudden temperature changes can cause sudden changes that may not be covered by your homeowners policy.
Other ways to prevent foundation damage are:
- Grade your yard so it drains away from the foundation.
- Maintain your soil according to your climate. Water periodically in drought conditions and ensure proper drainage during wet months.
- Keep your gutters clear of debris so water doesn’t pool near the foundation.
- Use mulch around the house to maintain temperature and moisture levels.
- Act fast if you see cracks to minimize further damage down the road.
- Avoid planting trees with large root systems near the foundation to avoid root damage.
- Have a foundation specialist inspect your home every few years for issues or potential warning signs.
How much does foundation repair cost?
The average cost of foundation repair is between $4,000 and $10,000, according to HomeGuide. Minor repairs may cost less than $1,000, but upwards of $15,000 or more if there are major repairs where hydraulic piers are necessary.
If there are leaks, expect to pay around $2,500 per leak. Cracks can cost between $250 and $800 per crack to fix. For damage from settling or sinking, it’ll cost between $1,300 and $1,500 per pier to correct. Bowed basement walls can cost up to $15,000 to fix.
HomeGuide estimates it can cost an average of $600 to $1,200 to level the house and between $5,000 to $10,000 to stabilize. If the basement has moisture problems, sealing and waterproofing will cost between $2,000 and $6,500.
If your homeowners insurance will cover the foundation, the claim will go under the dwelling coverage A on your policy. You have up to your coverage A limit for dwelling damage, which includes foundation issues, minus your deductible.
For example, if you have $250,000 in dwelling coverage and a $1,000 deductible, you’ll have up to $249,000 in dwelling coverage to pay for foundation issues. Whether the foundation damage costs $15,000 to repair or $150,000, you’ll only pay your deductible. But you’ll have to pay the full cost of repairs if the damage isn’t from a covered peril under your home insurance policy.
How to check if you have a bad foundation?
There are some telltale signs to check for to see if you have a bad foundation. If you notice any of these signs, it may be best to call the experts to do a professional assessment:
- Cracks in exterior walls.
- Horizontal foundation cracks.
- Water in the basement.
- Jagged foundation or wall cracks.
- Bowing or bulging walls inward.
- Crumbling concrete.
- Cracked bricks.
- Separation or cracks at doors, windows and garage door corners.
- Windows sticking when opening.
- Cracks in the floor or sheet rock.
- Floors bulging.
- Doors that have gaps, don’t close or are hard to close.
- Sinking porches or stoops.
- Tilted chimneys.
How do you file a claim for foundation damage?
If you believe your foundation damage will be covered by homeowners insurance, you should file a claim as soon as possible. Although the process may vary by insurance company, these are the general steps to take.
- File a police report if you believe the cause of damage is theft or vandalism. The police will document the damage and what happened. You’ll provide the police report number and a copy of the report to the insurance company, if available.
- Document the damage by taking photos or videos, plus list out any personal property that was affected or damaged. Having a handy home inventory can make this easier if personal items are involved.
- Make repairs to prevent further damage, but only if it’s safe to be in your home to do so. Keep receipts for purchases, like tarps, buckets, shovels or buying a shop vac to clean up.
- Don’t throw anything away. Even if items are destroyed beyond repair, pile them up and leave them for inspection by the insurance adjuster before throwing them away.
- Contact the insurance company to file the claim. You’ll provide details about the date and cause of loss, the damage specifics and what repairs you’ve done, if any.
- Work with the insurance adjuster. Once the insurance adjuster is assigned, work with them to schedule a time so they can come assess the damage and provide the next steps.
- Find a contractor in your area, if you haven’t already done so. Most insurance companies will have a contractor network to choose from, but you can also ask for referrals from family and friends to find a reputable and knowledgeable contractor to fix your home.
Are the cracks in my foundation covered by insurance?
Insurance covers cracks in the foundation, but it depends on the cause of the loss. For example, insurance typically covers foundation issues caused by lighting, fallen trees, plumbing water damage or vandalism. But home insurance does not cover general wear and tear, natural settling, faulty construction or damage from tree roots.
Does homeowners insurance cover structural defects?
Homeowners insurance does not cover structural defects, unless a peril causes the defect to be covered. A home insurance policy will cover damage from unexpected or sudden events, certain accidents and weather damage. A structural defect, which usually occurs from faulty construction, neglect or normal wear and tear, is not covered.
When should you walk away from foundation issues?
When you should walk away from foundation issues is a personal choice. If there is a severe issue, like a crumbling foundation, it may not be worth the cost of repairs. Minor foundation issues, like cracks, may be worth fixing. But if the cost to repair outweighs the investment, it’s probably in your best interest to walk away. Hiring a foundation specialist to assess foundation issues, their severity and potential costs can help you decide when to walk away from foundation issues rather than spend the money and time to fix them.
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