Home Insurance: Does It Cover Foundation Repairs or Basement Flooding?

Do you know what your home insurance policy covers?  If you need a significant repair to fix foundation damage, or to prevent basement flooding, will your insurance cover these expenses?  These are often major repairs, and the average cost ranges from $4600 to $5900.

Acculevel has been repairing foundations and waterproofing basements & crawl spaces since 1996.  Our customers often ask us questions about insurance, and whether they will be responsible for the total cost of the required repairs.  Since we don’t sell insurance ourselves, we don’t always have the answers. So we decided to research the options, in order to provide some useful information to you.  This issue impacts our customers and their out-of-pocket costs, so it’s important for homeowners to know the facts.

We contacted our own insurance representative at Blevins Insurance to learn the details of residential policies.  While the information below provides pertinent information for all consumers, Tom Blevins advises that “It is always good practice for the homeowner to check with his or her carrier to see if they do or do not have coverage for these items.”

 

A word of caution: while we wholeheartedly recommend contacting your insurance agent with questions about your policy and coverage, there can be unintended consequences.

 

 On a few occasions, a customer has checked with his/her insurance agent about covering a specific problem.  The agent came to the home, did an evaluation, then told the customer it wasn’t covered. But now that the insurance carrier knew about the existing problem, if the customer didn’t repair the issue within a given time, they would drop their insurance coverage.  Our advice?  If possible, call and update your insurance before you have any issues to resolve. 

 

Do You Have Flood Specific Insurance?

If You Don’t 

If your basement floods, you are only covered if the flooding is caused by a sudden event.  This means if a pipe bursts, or your washing machine overflows, the water damage may be covered.  The same is true if mold develops because of this event.    

If the damage to your home is the result of years of high humidity or a preventable leak, insurance will not cover any of the repairs.  If the flooding is a result of river overflow, high rains, or other natural events, insurance also will not cover the repairs.

Please note that even when the damages are covered, the source is probably not.  For the examples given, you would be responsible for the plumbing costs to fix the pipe, or for the costs to replace the washing machine.  

water seeping into basement cornerThis picture was taken by an Acculevel project manager, during a routine free estimate

 

If You Do

If you have flood insurance and you have a sudden flooding event, you have the same coverage as above.  Any damages caused by years of high humidity or preventable leaks are still not covered.  

The benefit of flood insurance is that damages from natural events are covered.  To paraphrase the National Flood Insurance Program, a flood is: a general and temporary condition that partially or completely inundates 2 or more acres of normally dry land OR 2 or more properties (at least one of which is yours) caused by: 

  • Unusual & rapid accumulation or runoff of surface waters from any source
  • Mudflow
  • Collapse or subsidence of land along the shore of a body of water as a result of erosion or undermining caused by currents of water exceeding anticipated cyclical levels 

 

Sewer & Drain Are Not Included

If your basement floods because the sewer or basement drain fails, this is not covered by regular insurance policies, nor is it covered by flood insurance.  Sewer & Drain is an additional endorsement that can be purchased separately.  Flooding caused by a failing sump pump also falls into this category.  Similar to a pipe bursting, insurance will cover the water damage, but the homeowner will be responsible for the sump pump repairs. 

 

Coverage for Foundation Repairs

As a general rule, insurance doesn’t cover foundation repairs caused by years of wear & tear.  This includes cracked or bowing walls caused by hydrostatic pressure and settling foundations.

However, there is an additional type of coverage if you live in an area where mining has been a significant industry.  This may sound odd, but millions of homes in the United States are built over abandoned mines, and mine subsidence is an additional policy option you may want to consider. Most of the affected counties are in the lower portion of our coverage area (southern Indiana and Kentucky), and homes built in this area may be at risk for damage caused by land shifts in these mines.  

 

Another Option: Purchase a Home Warranty 

There are companies like Residential Warranty Services that offer warranty plans to supplement their insurance coverage.  RWS does not have an age limit; no matter how old or new your home is, they have options available.  Some of their plans do include foundation cracks, appliances, and other items that may not be covered -or not fully covered- by your regular insurance policy. 

In an ideal situation, you would have both.  Let’s say your finished basement wall develops a crack that lets in water.  The warranty would cover the crack repairs, and insurance would cover the damages to the drywall and flooring.  

If you have questions about home warranties, and what types of repairs they will cover, we have a companion article that explores those options, also.

 

Do You Need Foundation Repairs or Waterproofing? 

If so, you are either completely or partially responsible for the costs of the repairs, depending on the cause.  This is unfortunate, and we understand that you may want to put off making repairs. But we would urge you not to do this, even if it means acquiring financing.  Delaying repairs will only cost you more money, as the damage gets worse.  

The first step is to look for an experienced foundation company and make an appointment.  Before you sign a contract for any service, always verify the company is reputable, insured, and accredited by the Better Business Bureau.   

If you live in Indiana or the surrounding states, contact Acculevel.  Established in 1996, we specialize in foundation repairs and waterproofing basements and crawl spaces.  If you have noticed any problems and would like a second opinion, you can request a free estimate.  An experienced project manager will evaluate the areas of concern and recommend the best course of action for you, to keep your home strong and healthy for years to come.