You just bought a home in Fort Worth…and at the closing, you got some paperwork about an existing “Foundation Warranty”. That sounds like a good thing since you were told that homes in North Texas are typically built on clay soils which can sometimes settle and damage the foundation.
Now, if you find a broken pier or a crack in your slab, does the warranty automatically cover any foundation repair? The answer may depend on the type of warranty, the age of the home, the nature of the damage, and the individual builder or foundation repair contractor who provided the warranty. Let’s take a closer look.
Which Types of Warranties Cover the Foundation?
A home warranty typically covers major household systems such as HVAC, hot water, plumbing, and electrical. It may also cover kitchen and laundry appliances installed by the builder. However, the foundation, roof, and other structural elements of the home are not covered.
One of the most comprehensive home structural warranties is the builder’s warranty on a new home. This type of warranty may cover all materials and workmanship from roof to foundation. Depending on the builder, the warranty may cover foundation defects for up to five years, and in some cases, the warranty can be transferred to the next owner when the house is sold.
Foundation Repair Warranty
A foundation repair warranty covers only the repair work performed by a contractor or foundation repair company. Warranty coverage may be for a term of years, or in some cases, a “lifetime” warranty is provided.
What is Not Covered Under a Foundation Warranty?
What all warranties have in common is the promise to make good on (1) any defect in the work performed; (2) by builders or foundation repair companies who provided the warranty; (3) for the term of the warranty period; and (4) while the provider of the warranty is still in business.
- When damage is the result of a cause other than a defect in material or workmanship — such as fire, flood, earthquake, termites, or leaky plumbing — repairs are not covered by the warranty.
- When a defect occurs in previous work, or in later work, or in a different part of the structure, or in work performed by the homeowner — repairs are not covered by the warranty.
- When a defect occurs outside the warranty period, repairs would not be covered. However, it may be worth asking, as some builders regard this as an opportunity to enhance their reputation for service.
- When a builder or repair company goes out of business, their warranty is worthless. This is why it is important to choose a builder with a solid business record. Crosstown can help you choose a reliable partner.
Will Homeowners Insurance Cover Foundation Repairs?
Homeowners insurance covers the structure of your home, including the foundation. However, like all other coverage provided by your policy, the foundation is only protected against the covered perils which are specifically named in your policy.
Covered perils may include fire, vehicle crash, or water damage from an overflow of your HVAC or plumbing systems. You may need separate coverage for flood, windstorm, or earthquake, all of which can cause foundation damage — and none of which are typically covered by a homeowner’s policy.
When Would a Foundation Warranty be Considered Void?
A foundation warranty can be voided by various actions (or failures to act) by the homeowner:
- DIY repairs — Limit any DIY repairs to cosmetic issues. If you need to plaster a small crack, that is permissible. However, do not attempt any structural foundation repair outside the warranty.
- Third-party repairs – Likewise, never let another builder or engineer touch foundation work which was performed and warranted by an original builder or repair contractor.
- Invalid transfer – When you purchase a home with an existing foundation warranty, do not assume that a transfer is automatic. Contact the builder to validate the transfer of the coverage.
- Homeowner negligence – Protect your foundation by cutting tree roots, draining standing water, and performing other maintenance. Ignoring preventable hazards is negligence and may void the warranty.
Do All Builders and Foundation Repair Companies Offer Foundation Warranties?
Many do not. When you need foundation repair, consult a qualified foundation engineer to provide a foundation inspection and to help you choose a foundation repair company that will provide a warranty, and can back up that warranty with a solid reputation for satisfied customers.