When you build a new home or buy one, you always hope nothing bad is going to happen. However, after a couple of years, you notice floors are uneven or letting in moisture. On close inspection, you realize you have serious foundation issues. The next thing you know, you’re calling an adjuster in Florida to help you determine the amount you’ll claim.
Do you know whether you’re covered or not? Will the insurer honor your claim? Read on to find out about these and more.
Want to Repair Foundation Cracks?
Settlement and foundation cracks are not only hazardous but costly to fix. Depending on the extent or degree of damage, you could be staring at a bill upwards of $10,000. If you think your insurer of five or 10 years will sort the bill, you might be in for a rude shock.
Some homeowners feel reassured that their home insurance covers all the perils they can think of. A few years down the road, and after paying substantial premiums, they discover they have a serious foundation issue. When they file a claim, they realize they’re not going to receive compensation.
Unless the specific risks associated with foundation damage were covered, you won’t receive a penny from your insurer. That means you’ll pay out of pocket for any foundation repairs.
What Can’t I Claim Compensation For?
Sadly, some of the major causes of foundation cracks and damage are things your insurer won’t take responsibility for. If at any time the cause of damage is attributed to these factors, it’s likely your home insurer won’t accept your claim.
- Bulging, cracking, shrinking, expansion or natural settling
- Flooding or earthquakes
- Pressure from tree roots near your home
- Shoddy or faulty construction
The cost of repairs isn’t included in your typical homeowners’ insurance. So it’s pointless to file a claim for natural settling or root penetration. Faulty construction falls squarely on your shoulders, as it’s deemed you were negligent. If you’d like to protect your home floods or earthquakes, you will have to take out separate insurance policies.
What Does Your Homeowner’s Insurance Policy Say?
Many carriers consider factors that cause foundation damage as avoidable. In other words, they expect you to keep up with maintenance and to control flooding as well as create proper drainage to stop damage. A typical policy is going to cover your home against certain and known perils. Check the policy declaration page to see what risks are listed. If the damage results from a risk that’s covered, your insurer may reimburse you for repairs up to the coverage limit.
Filing a claim for foundation damage can be tricky, as insurers follow a different set of rules. Based on that, they can determine whether your foundation damage can be covered or not. For example, if the cause of damage is a slab leak, you’re likely to receive financial support. But if it’s because of poor workmanship, you won’t.
Get Additional Homeowners Insurance Coverage
Owning a home in Florida is one of the major financial commitments you’ll probably make in your lifetime. As such, you’ll want to protect it from various hazards, natural or man-made. That means taking homeowners insurance premiums, which is going to be a recurring expense. While insurance is a noble idea, it’s likely to be of no use when your home develops structural issues like foundation cracks.
If your home has foundation issues or at risk of developing cracks because of soil settlement or soil movements, review your insurance policy and add coverage for these specific risks. In the event of foundation damage, you will get financial support.
Options for Foundation Repairs
The first step is to contact your local foundation repair contractor to see what needs to be done. They’ll assess the damage and help you determine the kind of repairs you will need. An estimate can be helpful in verifying whether your insurance policy covers the damage or not. So request a free foundation inspection and get an estimate.
The other option is to pay for the repairs out of pocket. You can pay in cash or use a credit card. Costly as it seems, it’s also the best option as repairs will go on smoothly. Try to compare quotes and see who gives you the best deal.
Another possible route is to do a cash-out refinance. Simply use your home equity line to take out a second mortgage. Lease the new home and use the money to pay for repairs.
Contractor financing is another feasible option. Many contractors offer individual payment plans with low-interest rates and zero down payment option.
Note: Even if your claim was rejected, that shouldn’t stop you from repairing the foundation damage. Not making repairs is not an option either as it could lead to further structural damage, which could make your home unlivable.