Will Home Insurance Cover My Foundation Repair?

Life has truths we don’t want to hear. One of those is foundation repair isn’t cheap, but it still needs to be paid for. And because foundation repair directly affects your home, it’s natural to want to see if your home insurance will cover the repair. After all, you have other reasons to save up money.

Spoiler –  It’s highly unlikely home insurance will cover your foundation repair.

But it isn’t the end of the world. That’s why other options exist and part of the reason Dalinghaus Construction has partnered with third-party financial providers.

Dalinghaus Construction has done foundation repair projects for over 2,000 homes, with one in 400 projects covered by home insurance. We’ve taken the time to understand why home insurance providers are unlikely to assist you financially with your foundation repair. What’s important is you understand why to take the next course of action. We’ll let you know why to make your financial stress a little bit easier to endure. 

For additional spoilers, watch this video that answers if your home insurance will cover foundation repair.

Again, it is highly unlikely your home insurance will cover your foundation repair

Home insurance covering foundation repair is incredibly rare. Dalinghaus Construction will have one in every 400 projects covered by home insurance or a quarter of a percent chance of covering you.

The only time foundation repair is covered by home insurance is if you can prove the damage to the foundation was caused by a pressurized water line breaking and caused foundation settlement.

And don’t try to lie to your insurance company. They’re smart and know how to snuff out a lie. You need to prove what caused the damage and to what extent.

It isn’t exactly fun to prove that a water line is leaking. You have to expose the line, which can be a hassle. This means going into your slab (if your house is slab-on-grade) to expose the waterline.

Watch this video for a further understanding of why insurance doesn’t cover foundation repair.

You need to be able to prove the damage caused

I know I’m a broken record repeating this. Home insurance is a stickler for proof. After all, these businesses are still for profit. 

Like, it might be easier to prove a large meteor crashed through your kitchen when you weren’t home. Maybe vandals were seen through your Ring camera attached to your front door. 

Foundation settlement – expansive soils drying out and moving, causing an area of your home to sink – is much harder to prove. At least when the settlement started, except if it’s from a pressurized water leak. 

Without a water leak, your home has possibly been experiencing foundation settlement before you moved in. There isn’t necessarily a way to prove that. 

What if your new home has foundation issues? Will Homeowners Insurance Cover it? 

No, but there is good news.

While homeowners insurance is unlikely to cover your home for foundation repair, your house should be covered under a warranty – typically a minimum of ten years. 

Sometimes something may have been problematic during construction, whether because of soil compaction or something wasn’t constructed correctly. The builder warranty will have that covered. 

Home insurance has many exclusions depending on the area

Most home insurance providers will exclude earthquakes, floods, and sewer backups. To have these included, you’ll have to pay extra for your plan. 

Home insurance usually covers:

  • Civil disturbances/riots.
  • Vandalism
  • Windstorms.
  • Vehicular damage.
  • Theft.
  • Volcanic eruption.
    • Don’t have to worry about this too much in Southern California, Arizona, or Nevada.
  • Fire
  • Roof collapsing from excess weight.
    • Snow, ice, and sleet.
  • Water damage from AC overflow, plumbing, or heating. 

In Southern California, especially riverside, fire is usually covered by home insurance, but it does mean prices are higher to accommodate the possibility of wildfires. Sometimes it makes affordable home insurance a struggle. 

Regardless, be aware of what your insurance DOES and DOESN’T cover. Many exclusions added to your contract will cost extra. 

Read the documents your home insurance provider gives you

Reading legal documents can be dryer than going on a run and not bringing water, only to substitute water with overcooked chicken. Reading legal documents is dryer than walking through Mordor to throw the One Ring to rule them all into the lava of Mount Doom. 

Regardless, some people enjoy reading legal jargon. Lawyers are pretty good at doing the readings (you would hope). There may be that one friend who enjoys a nice and dry read without water to drink or a pool nearby.

It could even be you.

No one is judging here. Even I enjoy my occasional legal jargon. But seriously, read the documents on your own or see if you can have someone read them over – especially if you know a lawyer or someone who works in the home insurance industry.

How foundation repair costs can be covered outside of home insurance

There are some options:

  • Pay out of pocket.
    • Foundation repair isn’t cheap. Dalinghaus Construction’s foundation repair projects have an average cost of around $26,000.
  • Have it financed.
  • Pulling out a construction loan.
    • Might not be in your best interest at the moment due to high-interest rates.
  • Refinancing your home.
    • Leveraging out the equity in your home as a loan. This sometimes can be pulled out as a second mortgage.
    • Might not be a good idea to have your home refinanced now due to high-interest rates.
  • Credit cards
    • A downside to paying with a credit card is the high-interest rates, plus the price of your project will be marked up by 3% since the card companies will still charge contractors.

Again, it’s highly unlikely your home insurance will cover your foundation repair. That’s why other options exist.

Having finances for an unexpected repair is always stressful, especially when you’re working to save the money you’ve worked so hard for. Even though you know why home insurance is so stingy with paying for your repair, it doesn’t mean there aren’t other options. 

Read our article Does Insurance Cover my Foundation Repair Project? to have an understanding of why home insurance companies want nothing to do with foundation settlement

Ask your bank about a loan you can pull, or check out our 0% financing options Dalinghaus Construction has available to make your financial life just a little bit easier. 

WRITTEN BY

Brian Dalinghaus

Brian is one of the Co-Founders of Dalinghaus Construction. He has been in the foundation repair industry since 2005. During his career, he has been associated with helping over 4,000 homes and structures throughout California and Arizona.

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