Does Homeowners Insurance Cover Structural Damage?

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Are structural issues covered under standard homeowners insurance policies?
When and how does homeowners insurance cover structural issues?
How much do I have to pay if homeowners insurance does cover structural issues?
If homeowners insurance doesn’t cover structural issues, what will?
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Are structural issues covered under standard homeowners insurance policies?

As a new homeowner, I’m curious about what all is covered under my insurance. I worry about all aspects of my home’s construction, including its foundation. What if my home was constructed poorly, or some other mishap occurs one day that causes it to collapse? Do standard homeowners policies cover structural issues?

Well, that’s a loaded question. When thinking of structural issues, the main components concerning a home would be its foundation and potential collapse. Coverage for a home’s foundation is controversial, and issues regarding the foundation would probably not be covered under a homeowners policy. This might not be the same for every policy, but it’s usually safe to assume that you don’t have coverage for it.

Collapse, on the other hand, while also controversial, is more often covered under standard homeowners insurance. The cause of the home’s collapse typically determines whether the event will be covered or not. We’ll explore this topic further in the next section.

When and how does homeowners insurance cover structural issues?

The only time homeowners insurance typically provides coverage for foundation issues is if the problem is caused by water damage. If you’ve got underground plumbing that leaks and erodes the home’s foundation, that’s considered a covered peril. However, foundational issues due to earth movement, such as in the event of an earthquake, aren’t covered by homeowners insurance.

When it comes to your home collapsing due to a structural issue, in order to be covered under homeowners insurance, the cause of the collapse typically must have been due to something surprising or unknown to the homeowner, something accidental. It’s the homeowner’s responsibility to take notice of issues with their home’s foundation that could lead to further problems down the road, such as if the porch is visibly leaning.

Collapses caused due to negligence or neglect on the homeowner’s part are not covered by homeowners insurance. Many collapses are caused by the home aging and becoming weathered. However, certain causes are covered. We’ll explore a few.

Homeowners insurance may provide coverage for collapse in the following situations:

• Unexpected or surprise incidents: Let’s say your foundation erodes to the point of causing your home to collapse, and you later discover it was due to extensive termite damage. If you as the homeowner were completely unaware that you had a termite infestation, the collapse is likely to be covered, even though termites themselves are not a covered peril under homeowners policies. The collapse would be the covered event.
• Accidents: If you hire a handyman to do some work on your home and they tear down a wall that causes your home to collapse, you're likely to be covered. While the handyman should’ve known how to discern structural walls, the cause of your home’s collapse was not expected, or your fault.
• Weather damage: Let’s say your roof collapses due to too much snow or ice accumulation. You’ll most likely be covered under your homeowners policy, since this probably isn’t something the homeowner would’ve foreseen happening, and therefore couldn’t have taken appropriate measures to prevent.

Now, if your roof caves in due to your own negligence, your homeowners insurance most likely won’t cover you. However, insurance companies are more lenient with more innocent causes. Some people overload their attic with way too much storage, which causes the floor to eventually cave in. Same thing with storage areas above garages. Common sense measures to keep the structure of your home intact are the homeowner’s responsibility, but insurance companies will show you some mercy for more innocent errors, and will probably cover the collapse.

How much do I have to pay if homeowners insurance does cover structural issues?

After paying your deductible, you’ll be responsible for paying any amount exceeding your homeowners policy’s limits in the category of the dwelling itself. Your deductible amount and your insurance’s limit will be specific to your personal homeowners policy. Be sure to review your policy with your independent insurance agent so you know exactly how much coverage you have, and how much you might have to pay out of pocket.

You can always shop around for a policy with a lower deductible or pay more to increase your coverage limit. Keep your unique concerns and needs in mind when reviewing your policy. Your agent will be able to help you decide if you need to add more coverage.

If homeowners insurance doesn’t cover structural issues, what will?

Well, no insurance policy out there will cover you for issues caused by your neglect or failure to maintain your home. However, as far as structural issues caused by earth movement, you can look into a special earth movement insurance policy. This type of insurance protects homes in areas with the type of soil that tends to expand and contract depending on the season. It provides coverage for natural disasters not covered under homeowners insurance, too.

Earth movement policies cover structural issues including foundation problems and collapses due to soil movement, landslides, or earthquakes. If you live in an area prone to any of these perils, consider getting an earth movement policy to help protect your home.