Home Insurance and the Disappearing Back Yard

Homeowner’s in Frisco finds themselves caught between a rock and a hard place as they wait for their homeowners association and neighborhood developer to decide who’s responsible for the collapsing slope behind his home. It also raises a question of what their home insurance policy covers and doesn’t cover.

The problem began last May with all the heavy rain that fell on north Texas. The rain soaked the hill leading from a pond up to the homeowner’s yard causing it to erode. They notified their homeowners association but no repairs were made to the hill. Additional damage was sustained in December when by heavy rain fell early in the month. The damage was further exacerbated by more rain later in the month with most of the hill collapsing up to their property’s fence.

The HOA pushed the Frisco City Council to force the developer to act stating the developer is responsible for the land comprising the green area while the developer contends the HOA has been maintaining the green area making the association responsible for repairs to the hill. The City Council is working to bring both parties to the table to resolve the issue while the homeowners keep an eye on weather reports and an eroding hill that’s creeping closer to their home.

Most home insurance policies don’t cover damage to a home caused by soil erosion or earth movement even in cases when they provide optional foundation coverage. This coverage really only applies to:

  • Slab access – pays to cut through the slab
  • Slab egress – pays to close the slab back up

In these cases, the slab access is to provide access to a leaking water pipe either below or in the slab. Repair of the leaking pipe may or may not be covered, but once the pipe is repaired, the egress is covered subject to the policy deductible.

There are some home insurance policies which will provide earth stabilization coverage as a part of their foundation and / or home insurance coverage. This could be slightly helpful to the Frisco homeowners depending on the amount of coverage their policy provides (which is usually very little), and whether or not their HOA would allow these measures to be taken even on a temporary basis.

Earthquake insurance, will not cover this type of hill failure either. Many instances of earth movement are covered under an earthquake policy, however, seismic activity has to be detectable in order for a claim to be allowable for earthquake coverage.

Flood insurance could potentially cover the hill’s failure. While there has been no flooding of the home or property, flood coverage does cover damage to homes and property caused by undercutting of stream or river banks. This is not strictly what’s occurred, however the argument could be made that the hill’s failure and subsequent erosion were caused by flood level rains. This would take a very generous level of interpretation by a claim adjuster and I wouldn’t want to bet my home on it.

The best bet for the homeowner in a case like this is for the developer and / or HOA to determine who’s responsible and to move quickly to stabilize the property and eroding hill. This will ultimately save one or both of them the expense of a lawsuit for more than the cost of the repairs to the hill. What do you think? Share your questions, thoughts, and experiences with me on my Google +, Facebook, and LinkedIn pages. I’d love to hear from you!

Evie Wise
Evie Wise


Evie Wise
Evie Wise

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