With homeowners insurance, coverage often hinges not on what happened but why it happened. Water damage from a burst pipe is covered, for instance, but not from a flood. If your house is sinking, it's usually for a reason your policy excludes from coverage. That's unfortunate, as costs for stabilizing a foundation can run to several thousand dollars.
Most homeowner policies exclude natural subsidence. Florida law defines that as "settling, cracking, bulging, shrinkage or expansion of foundations, walls, floors, ceilings, walks, drives, curbs, fences, retaining walls," although other states phrase it differently. Sinking that results from earth movements such as a mudslide or an earthquake isn't covered either. A sinkhole opening up in or near your house may be an exception. Florida, for instance, requires homeowners insurance to cover sinkhole damage, but insurers often claim a sinkhole isn't the cause.
It may be the problem lies with your builder -- he did a lousy job pouring the foundation, say, and you're only just finding out. As with earth movements, your insurance policy doesn't cover losses due to bad workmanship or poor materials. If your builder gave you a warranty, you may be able to collect by calling on her to honor it. If not, you may have to take her to court to get satisfaction.
If flooding has eaten away at your foundations or the ground under them, you're out of luck once again. Homeowners insurance never covers flood damage, so unless you have flood insurance there's no coverage. If the damage is due to a broken water pipe on your property, your policy might pay for the damage -- read it to find out. You can take out water-line insurance, though many such policies offer very little coverage.
If the ground around your house is drying out and cracking, that's the kind of subsidence that your policy exempts. It may be possible to launch a pre-emptive strike against sinking by keeping the ground thoroughly hydrated. The National Association of Realtors recommends you dig down about six inches: if you don't find any water, drought is a problem. You can use a soaker hose a foot away from the foundation to water the soil until it's moist but not drenched, repeating as needed when it dries out again.
- HouseLogic: Is Your House Sinking? Drought Could Be the Cause
- Boyett Insurance Agency: Homeowners Insurance Frequently Asked Questions
- Tampa Bay Times: A Fight Over Sinking Homes
- Nolo: New Home Defects: Holding Your Builder Responsible
- Los Angeles Times: Water-Line Insurance Could Be Money Down the Drain
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