Would My Homeowners Policy Cover a Cracked Foundation?

Owning a home can be a rewarding experience and a smart investment. In fact, it's a big part of what we consider the "American Dream" to be. But there are many headaches associated with home ownership - the majority of them are related to maintenance, home repairs, and the occasional home crisis. Discovering that your home has a cracked foundation can be an alarm - not only do you have structural damage to your house, but you also could have other related issues such as water intrusion.

But just because your home has a cracked foundation, it doesn't mean that your homeowners insurance will automatically cover the damage or repair. In fact, such an issue could be explicitly excluded from your coverage.

As you go about getting your home repaired and working with your insurance company - or even if you are simply preparing for owning a home in the future - be sure to remember these factors when it comes to homeowners insurance.

• Wear and tear, age and basic maintenance aren't covered by insurance: This is about as absolute a rule of thumb as there can be when it comes to homeowners insurance. Your insurance company isn't going to protect you if you fail to maintain your roof or gutters. Similarly, if you need to keep up with your home's structural integrity - particularly if it is an old hone - you aren't likely to get any help form insurance if an issue arises. Insurance is to protect you from unforeseen problems, not expected ones that happen with age.
• The crack might not be your biggest issue: Instead of thinking about the crack in your foundation, think about what the crack could cause. This could be your bigger problem. Is water seeping into your house? Into the basement? Do you have a leak or a flood? Are your walls now cracked? Think about the bigger picture, no matter how difficult it might be.
• You might have legal recourse: If this is a brand new home you might have legal recourse. Often, homes are built with "post-tension slab construction," which means the house is designed to settle without cracks or foundation issues. If the home is new, there probably shouldn't be such an issue. Consult your local state office of construction or contractors to find out if you have legal recourse with the builder.
• This is why you need home inspections: Before you buy a home, make sure you get a professional home inspection. A trained inspector should be able to spot these issues, and help you make an educated decision. A home warranty also could help protect you from some maintenance issues that are likely to arise. Do your homework ahead of time, so you can prevent some of these headaches at a later date.
• Read your policy before taking it out: Too often, homeowners think they have coverage when they don't. Always read your insurance policy before taking it out. Know the limitations of the coverage, and which factors will be covered. If you are concerned, ask your agent if you can purchase additional coverage or a rider that will cover a specific issue. Never assume a particular issue will be covered.