The short answer
Most Texas homeowners policies don’t pay for foundation damage caused by soil moving. They may pay if a sudden plumbing leak caused it. Neither answer replaces reading your policy, because Texas insurers write their own forms: TDI says they began filing their own in 2003, though some still use the promulgated forms.
Covered and not covered
| Cause | Usually | Source |
|---|---|---|
| Drought shrinking clay | Not covered | usually not covered for all-risk policies, per TDI |
| Soil swelling after heavy rain | Not covered | TDI lists earth movement as an exclusion |
| Sudden pipe discharge under the slab | Can be covered | TDI’s position under the HO-B form |
| Slow, repeated seepage | Not covered | TDI: sudden covered; continuous or repeated leakage not covered |
San Antonio’s weather makes the first two common. The city’s records include a year with 10.11 inches of rain and one with 52.28 inches, which move clay in both directions without any pipe involved.
The settling exclusion
The 1991 standard homeowners form, as quoted by the Fifth Circuit, excludes loss from settling, cracking, bulging, shrinkage, or expansion of foundations excluded. The ISO form that Texas approved in 2002 says it does not covered cover settling, shrinking, bulging or expansion of footings, foundations, walls and floors. Nationally, the Insurance Information Institute notes that most policies excluded damage related to earth movement.
The plumbing-leak exception
In 1998 the Fifth Circuit reported that the Texas Supreme Court had decided Balandran v. Safeco, which opened the door to coverage for foundation damage from an accidental plumbing discharge. TDI’s 1997 bulletin states its position that under the HO-B form, such damage is covered. The HO-B’s accidental discharge peril also pays for tearing out and replacing the building parts needed to repair the plumbing.
There’s a catch. TDI says companies cover sudden and accidental discharge but not sudden covered; continuous or repeated leakage not covered. A pipe that has been weeping for months is the harder case.
Foundation endorsements
TDI lists foundation/slab endorsement among common endorsements, and its 2002 order describes the Foundation Coverage-Texas Endorsement, which limits foundation coverage to 15% of the dwelling coverage on the date of loss. Ask your agent whether your policy has one. Adding it after a problem appears won’t help.
If you think a leak caused the damage
- Stop the water and photograph it.
- Call the insurer. TDI says an insurer might may deny claim if you make permanent repairs before the company sees the damage, and that some policies have a one year deadline.
- Ask a licensed plumber for a written leak test. The plumbing page explains the tests.
- Keep the foundation contractor’s elevation readings and plan.
Plan to pay for most repairs yourself
Most repairs are drought or moisture driven and fall under the exclusions. Budget accordingly, compare the written plans on the cost page, and remember the Attorney General’s advice to pay not until the work is complete and you have inspected it.
Want a contractor to look at it? Call to schedule an inspection.