Foundation Insurance Coverage Issues When Purchasing a Florida Home

Whether someone is purchasing a first home or a dream home, foundation issues necessitate careful attention.  Although most home buyers purchase homeowner’s insurance, standard Florida homeowner’s policies typically do not provide coverage for most foundation problems.  Even if you purchase a rider, this does not guarantee that your insurance policy will provide coverage for your particular issues with the foundation of your home.  Given that the family home constitutes one of the most important assets held for many families, home purchasers need to understand some key issues about foundation problems and related insurance issues.

Foundation issues are different than many types of damage to a residence because the costs of repair can easily cost tens of thousands of dollars.  The process of reinforcing a home’s foundation often involves installing concrete or steel supports.  The costs associated with shoring up or reinforcing the foundation can be supplemented by later costs incurred because the home suffers long-term harm to its structural integrity.  Because of the substantial costs associated with foundation repairs and the possibility that the problem is not covered, it is important to take certain steps to mitigate the potential risks associated with foundation issues.

As a former claims adjuster and a Florida insurance claims lawyer, I have provided some tips for homeowners considering a residence with potential foundation issues.

Determine the Cost and Nature of Repairs: Some slab cracks are nothing more than a sign of the house settling, so the imperfections do not merit pulling out of a favorable transaction to purchase the home.  Some homeowners try to protect their interests by engaging someone to perform an inspection and provide an estimate of the cost of repairs, but this is a risky option.  An estimate of repairs may turn out to be overly optimistic once professionals are actually hired to perform the work.  One way to mitigate this risk is to require the seller to have the repairs performed prior to completing the sale.  This will protect you if the costs of repair spiral out of control because of other issues discovered while the repairs are being performed.  If the seller will not agree to this option, this should raise red flags about consummating the transaction.

Purchase Additional Protection: Even if you persuade the seller to fix the foundation prior to closing, subsequent events could cause future damage.  Homeowners who purchase a rider to cover earth movement can protect against problems caused by a rain storm that liquefies the soil.  Separate policies for sinkholes or floods can provide additional protection.

Utilize an Expert: If you suspect foundation issues, you should hire a structural engineer to inspect the property.  A home purchaser should never rely on an inspection by a person the seller retains if any suspicion of foundation problems exist.  The purchaser’s structural engineering expert can provide an informed opinion regarding the nature of the problem, estimate the cost of repairs and highlight potential related damage in the future.

Investigate Policy Options: Although you cannot typically secure coverage for foundation damage, you might be able to obtain coverage that will apply to “ensuing issues” that can protect you from future costs.

If you are facing costs related to your home’s foundation problems, you should seek prompt legal advice.  My law firm represents policyholders in claims disputes in Miami and throughout Florida.  The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations.  No Recovery, No Lawyer Fees.  Call 305-461-1095 or Toll Free 1-866-71-CLAIM.

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