The short answer
Most Texas homeowners policies don’t pay to repair a foundation that moved because the soil shrank, swelled or settled. TDI’s consumer guidance says all-risk policies usually don’t pay for foundation repair, and its home insurance guide lists earth movement among the damage most policies don’t cover. Nationally, the Insurance Information Institute says most property policies exclude damage related to movement of the earth.
The exception that matters in Texas is a sudden plumbing leak.
Covered and not covered
| Situation | Usually covered? | Why |
|---|---|---|
| Slab settled after a long drought | No | Settling and earth movement exclusions |
| Clay swelled after heavy rain and lifted the slab | No | Same exclusions |
| Cracks from tree roots drying the soil | No | Same exclusions |
| Sudden leak in a water or drain line under the slab | Often, for tearing out and replacing what’s needed to reach and fix it | Accidental discharge coverage |
| Foundation movement caused by that sudden leak | Depends on the policy | Covered under the HO-B after Balandran; under newer forms, check for a foundation endorsement |
| Slow leak that went on for months | Usually not | Continuous or repeated leakage is excluded past a set period |
| Foundation damage with a foundation endorsement | Yes, within its limits | Endorsement capped at 15% of dwelling coverage |
The settling exclusion
The 1991 Texas standard homeowners form, the HO-B, excludes loss caused by settling, cracking, bulging, shrinkage or expansion of foundations, walls and floors. The national ISO form approved for Texas says the same: settling, shrinking, bulging or expansion of foundations is not covered. That language is why a drought-cracked slab almost never becomes a successful claim.
The plumbing-leak exception
The HO-B’s water damage coverage works differently. When water escapes suddenly from a plumbing system, the covered loss includes the cost of tearing out and replacing any part of the house needed to repair it, and the policy says the settling exclusions don’t apply to that peril.
In 1997, the Texas Department of Insurance stated its position that under the HO-B, foundation settling or cracking caused by an accidental plumbing discharge is covered. A year later the Texas Supreme Court agreed: in Balandran v. Safeco, decided in 1998, it held that the HO-B foundation exclusion doesn’t bar claims for foundation damage caused by an underground plumbing leak.
Two cautions:
- Your policy may not be an HO-B. Texas insurers have filed their own policy forms since 2003, so the wording that decided Balandran may not be in yours.
- Slow leaks are different. TDI notes that companies cover sudden and accidental discharges but not continuous or repeated seepage beyond a set period.
Foundation endorsements
Some policies offer a foundation add-on. TDI lists damage to foundations or slabs as a common endorsement, and its 2002 order describes a Foundation Coverage-Texas Endorsement covering movement caused by leaks from plumbing, heating, air conditioning or sprinkler systems. Coverage under that endorsement is limited to 15% of the dwelling limit, which may not cover a large pier job.
Check your declarations page for an endorsement. If there isn’t one, ask your agent whether your company offers it and what it costs.
If you think a leak caused the damage
- Stop the water. Shut off the supply to a leaking line and keep receipts for any temporary fix.
- Document everything. Date-stamped photos of cracks, wet flooring and the water bill.
- Report it promptly. TDI says some policies have a one year deadline.
- Get it tested. A licensed plumber’s leak test shows where the leak is; the slab leak page explains the tests.
- Don’t make permanent repairs first. TDI warns that an insurer might deny a claim if you do.
- Get the foundation evaluated. If the insurer disputes whether the leak caused the movement, an independent engineer’s report is the usual evidence.
Plan to pay for most repairs yourself
For most Fort Worth houses, foundation movement comes from clay drying and swelling with the weather, which no standard policy covers. Budget for it as maintenance on a house built on expansive soil. The cost page lists published prices, and the selling guide explains what a repair means when you sell.
Want a contractor to look at it? Call to schedule an inspection.