How Can I Ensure That My Homeowner’s Insurance Policy Covers the Cost of a Slab Leak?

Homeowner's insurance covers dozens of different eventualities. Depending upon the type and quality of your policy, your home may be covered for such disparate damages as fires, wind damage, burglary, vandalism, defective appliances and more. There are three basic classes of homeowner's insurance policy: HO-1, HO-2 and HO-3.

If your policy is classified as an HO-1 document, you may have limited recourse for many damages that commonly befall a house. Aside from certain "Acts of God" like break-ins and freak storms, your provider may be reluctant to pay out on your claims. Even if you deem these claims to be ironclad and legitimate, it's likely that your provider will find a loophole and avoid paying the full amount of your cleanup and repair costs. Many insurers use a combination of deductibles, coinsurance requirements and supplemental insurance policies to limit the size of their HO-1 payouts.

By contrast, HO-2 and HO-3 policies pay out more generously and frequently. However, these policies also come with some restrictions. In particular, homeowner's insurance companies tend to be reluctant to make payouts for certain types of water damage. If a leak originates from a pipe or storage tank that's located underneath or outside of the covered house's foundation, any damage that it causes is unlikely to be covered under the terms of a standard homeowner's insurance policy.

If you're facing a so-called "slab leak" that is warping, raising or otherwise damaging the foundation of your home, you'll need to ascertain its source. A leak that originates from a standard water or sewer pipe that enters your home through its foundation may be covered by your homeowner's insurance policy. Generally speaking, claims made on leaks originating from pipes in the basements, floors or walls of a home are far likelier to be accepted than those made on leaks that originate outside of those areas. What's more, it's perfectly plausible that an above-ground water leak could seep into your basement and affect your home's slab. The claims adjuster who reviews your case will have no choice but to acknowledge this.

However, a leak that originates naturally or gradually may not be covered under the terms of your policy. In fact, groundwater leaks are virtually never covered by standard homeowner's insurance policies. Since these types of leaks are considered "floods," they must be covered by an entirely separate insurance policy. Likewise, leaks that worsen over the course of many weeks may be blamed on "homeowner negligence."

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